This is exactly what I was thinking when Steve Jobs announced the iPhone and tried to explain why it was so expensive: why not make it more affordable and grab a bigger market share. They must be the only company in the world expecting consumers to accept them (Apple) taking a 50% slice of the US$499 and $599 prices. Is that stupidity or arrogance or marketing brilliance? I've already come out of the Apple fanboy closet, but that doesn't mean I have to like the way they operate, so I doubt it's brilliance.
And it doesn't even have VoIP like a lot of us were no doubt hoping for and expecting. Well, apparently Jajah, who added new countries recently, might be available on the iPhone, which will reduce long distance calling costs. But how does Jobs declare the "iPhone" a technological marvel when it doesn't even have VoIP? How hard would that have been to have? Five bills and no VoIP? The good, the bad and the ugly of the iPhone doesn't justify the price, especially when there already are a couple of buttonless Linux phones, albeit obscure.
If you want to get technical, aside from the "on/off" button, I never use the keypad on my Palm Treo 650, opting to use the soft keypad instead. In fact, I can often navigate most of what I want to do on the Treo using just one thumbnail. (Though if I'm in a hurry, I'll use the stylus for accuracy.)
It's all about the Cult of Steve. See the Steve Jobs/ iPhone parody on MadTV to understand what I'm saying. It'll probably be at the Mad TV YouTube channel soon.
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