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An Apple fan bends over inside his tent in Denmark.  (Source: Engadget)

New York was a zoo, but an orderly one.  (Source: Engadget)

Chicago wasn't too crazy, but there was a solid contingent of fans outside.  (Source: Engadget)
Today marks Apple's biggest product release of the year

Many people across the country have caught a fever, and the only medicine is more iPhone.  Large lines formed outside Apple stores in major cities across the U.S., in anticipation of the 8 AM release of the long-awaited 3G version of Apple's iconic smart phone. 

The launch was truly an intriguing global phenomenon.

The lines were shorter than the original iPhone release at Apple's 5th Avenue store in New York, according to initial reports, but the crowd exuded a much stronger sense of desperation.  Apple employees were on hand to start wild rounds of cheering, whipping the crowd of Apple lovers into a frenzy.

In New Zealand, first to get the iPhone due to time zone mechanics, huge crowds formed.  The typically sedate Kiwis went wild, some of them camping out, forming crowds as the moment approached.  Japan was among the next to get the phone, with even larger crowds of up to 1,000 forming.  Reporters spotted many of the ever-studious Japanese youth reviewing textbooks while they waited.

Across Europe, in Sweden, the Netherlands and elsewhere, similar excitement was seen.  In Europe iPhones were delivered by armored car and handed off to the store manager.

The exception seemed to be Canada.  In the normally busy city of Calgary, the Canadians seemed somewhat apathetic towards the launch, perhaps due to recent dissatisfaction with Rogers, Canada's leading service provider who picked up the cell phone.  Or perhaps it was the hailing storm that pelted the city overnight.  Nonetheless, citizens reported small crowds camping out over the course of the night.  Quebec was similarly quiet.

One curious phenomena that arose was the iPhone EDGE model fire sale.  Patrons of the iPhone were offering their obsolete models for as little as $50 to would be buyers.  While some might be wary, it seems that it might be a fair deal for some, living outside AT&T's more limited 3G coverage, but within the EDGE network coverage.

Finally getting their sweaty palms on the new iPhone, Apple fans were perhaps a bit surprised to discover it looked amazing like...  their old iPhone.  Perhaps among the cuts that dropped the price from $399 to $199 was the removal of the chic aluminum casing.  In its place is a shiny black (or white, optional on the 16GB model) plastic, a magnet for fingerprints. The move to plastic may also have been made to deal with Apple's ever growing list of radio frequencies supported -- GSM, EDGE, HSDPA, WiFi, Bluetooth, GPS.

In the end, the phone still looks pretty much like an iPhone, and people report the plastic to feel solid, and not at all flimsy.  The phone is now curved, fatter at the center and thinner at the edge, a popular design trick to give the illusion of thinness.  Unfortunately, this means that when tapping out an email on a table, the phone rocks back and forth.

In a move that angered some, Apple replaced the old dock, which is no longer compatible with the iPhone.  After Apple "sells" customers on the iPhone, they are in its clutches and it slams them with a $30 fee for their new phone.  Another minor gripe is that the phone does not automatically detect GSM or 3G networks, the user must configure it themselves.

The new phone sports noticeably better quality on 3G and GSM, according to early adopters.  Battery life weighs in close to expectations from Apple with 10 / 5 hours talk on GSM / 3G (respectively), 5 hours 3G data, 6 hours WiFi, 24 hours music and 7 hours video.  The camera is reported to be slightly sharper, but unimpressive, overall.

Music fans will be happy -- the iPhone now has a flush 3.5mm jack.  This will allow normal headphones to be used.  The speaker, which many complained was too quiet, has also been pumped up. 

IPhone tests have showed it to be a speedy performer, with data rates of 300 - 500Kbps in the U.S. and 700-800Kbps on faster foreign networks.  The GPS is also very fast, supplementing satellite acquisition with cell phone tower triangulation.  Also the GPS uses Skyhook's proprietary WiFi-based location system, the only known phone on the market to do so.  Microsoft Exchange, now supported, works well for email, but can only support personal/corporate coexisting accounts, not personal/enterprise.  PowerPoint presentations now can open automatically on the phone as well.

In other iPhone related news, the 2.0 Firmware for the iPhone/iPod Touch which enables the new Apps feature and such goodies as Nike+Apple was leaked for free.  It has now been officially released for $9.99, but it is still floating around for free.  There have been some reports of problems with the free version.  Expect a rapid crackdown from Apple as well.

All in all it was a busy day for Apple worldwide.  No real surprises, no riots, but still the iPhone launch was an impressive display by Apple of its market might.

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By crystal clear on 7/12/2008 1:30:57 AM , Rating: 2

Apple squeezes iPhone 3G costs down to $173

June 25, 2008 (Computerworld) The cost of manufacturing Apple Inc.'s next-generation iPhone 3G will be 23% lower than the cost of manufacturing 2007's original model, according to a research firm noted for tearing apart electronics.

According to estimates by iSuppli Corp., Apple's new iPhone 3G will come with a bill of materials (BOM) and manufacturing cost of $173, nearly one-fourth less than the $226 the company spent on the first-generation 8GB iPhone, which debuted almost a year ago.

"The new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in functionality and unique usability, due to the addition of 3G communications," said Jagdish Rebello, an analyst at iSuppli, in a statement issued yesterday.

The most expensive component on iSuppli's speculative price list was the 8GB of flash memory, which it tagged at $22.80. The touch screen and display each cost $20, while the 3G chip is $15, said the company.

ISuppli's breakdown is, of course, speculative. Like other recent "tear-down" estimates of the smart phone's manufacturing cost, iSuppli's is based on information that may turn out to be incorrect. It will be more than two weeks before Apple and its carrier partners start selling the iPhone 3G.

Two weeks ago, in fact, iSuppli declined to match a rival's tear-down estimate with one of its own, saying it would instead withhold comment until it had an iPhone 3G in hand. But it changed its mind and issued a preliminary estimate, citing what it called "strong popular demand for information on iPhone costs and pricing."

Two weeks ago, iSuppli competitor Portelligent Inc. touted its own analysis -- also done without seeing an actual iPhone 3G -- that tallied the new model's costs at around $100, considerably less than iSuppli's figure. Austin, Texas-based Portelligent's number got analysts talking, with some speculating that the phone could become Apple's most profitable product.

At the time, Carl Howe, an analyst at Yankee Group Research Inc., used Portelligent's $100 estimate to question whether Apple required carrier subsidies to make money on the iPhone 3G. "If AT&T is adding in a $200 subsidy, then the iPhone 3G is anything but a phone requiring a carrier subsidy," Howe said. "In fact, if these numbers are true and the carriers are subsidizing the phone, the iPhone 3G could end up being the most profitable product Apple makes."

Although iSuppli's calculation puts the iPhone 3G materials and manufacturing costs significantly higher than Portelligent's, iSuppli's Rebello also thought the carrier subsidy would be larger: around $300 per iPhone. "This means that with subsidies from carriers, Apple will be selling the 8MB version of the second-generation iPhone to carriers at an effective price of about $499 per unit, the same as the original product."

It's imperative that Apple make money on the hardware, Rebello added, since the company will not be sharing in 3G subscriber revenues. "Hardware is vital to Apple profits, valuation and revenue," he said. "Two-thirds of Apple's revenue from the iPod still is derived from hardware, while only one-third is from the iTunes service and accessories. The second-generation iPhone is no exception."

Like Howe of the Yankee Group, iSuppli thinks the iPhone 3G may be an unusually-profitable product for Apple. Earlier iPod and iPhone tear-downs have put Apple's profit margin at around 50% more than the BOM and manufacturing costs. With a $300 subsidy, however, the margin would be nearly 65%. Even with a $200-per-iPhone subsidy, Apple's estimated margin would be around 57%.

Apple will launch the iPhone 3G on July 11 in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the U.K. and the U.S. The company has also said it would make the new phone available in some 70 countries by the end of this year.

iSuppli will do a real tear-down once it gets its hands on an actual iPhone 3G, said Rebello.

"This is about the Internet.  Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis

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