Analysis, Business, Telephony, Mobile, Global: iPerbole hit the streets when iPhone went on sale. DT went with the flow, but wonders if the new little marvel has much relevance to the developing world...

Apple’s latest gizmo has been variously (and laughably) hailed as more groundbreaking than Bell's original phone, ushering in the next phase of telephony with a touch-sensitive glass screen that busts the boundaries of user delight but, as a disappointment, lacking basic functionality such as a decent amount of memory, video and fast 3G connection.

So far, its sexy touchy-feeliness appears to have won over most reviewers. All that screen-tapping, flicking and pinching has apparently hit a nerve like nothing else. This is important, because rarely had an industry so avidly watched the response to a single product launch.

Apple's well publicised target of 10 million unit sales by the end of next year will impact the big mobile manufacturers such as Nokia, Motorola and Sony Ericsson, which are already mauling each other in their battle for market share, and Blackberry-developer Research In Motion, which has been announcing figures at the top end of expectations, and which will feel this direct intrusion onto its patch.

Overall, growth in the mobile market is slowing quite rapidly. Sony estimated its mobile sales would grow by just 10% in 2007, while the recent round of results have mostly shown year-on-year growth dipping below the 20% mark for the first time in recent history.

Analysts Informa reckon mobile sales will reach 1.03 billion this year, with emerging markets continuing to thrive, but overall growth slowing. Most demand is currently for entry-level phones with low profit margins, which make up around 25% of sales, but this segment will shrink to 10% by 2011, when over 55% of handsets sold will be high-feature.

Given this, the iPhone may be in for a slower start that its makers are hoping for. Three years is a long time in wireless handsets and by 2011 competitors will have had ample time to look at what customers are or are not liking with the iPhone and to come up with alternatives. A further question is whether the iPhone is robust enough for developing countries. Touch screens in particular don't have a good track record in the dust and dirt of developing countries which may prefer something a bit more robust.

iPhone could transform the business dynamics of some of its component-makers, depending on whether it grows the market or merely expands at the expense of other mobile operators. iPhone partners are bound by confidentiality agreements but its audio chip is probably supplied by Wolfson Microelectronics which already supplies the iPod. Based on the iPhone 10 million target, analysts say Wolfson's revenues could be boosted by US$12.6 million.

On the other hand, Cambridge, England based ARM is known to have supplied three to five cores for the microprocessors used in the iPhone but since ARM cores feature in many mobiles its benefit will depend on how much the Apple iPhone adds to the net numbers of new handsets out there.

Apple has yet to announce its partners for the iPhone in Europe and Asia, where it is expected to launch later this year and in 2008 respectively. Vodafone is the frontrunner but Deutsche Telekom's T-Mobile operator is also in the frame. And what of Africa and CALA.... ?