When iPhone Wannabes Attack

In what seems to be a bid to compete with the iPhones snazzy feature set—the touchscreen, photo management and iPod apps youve seen in those ubiquitous TV ads—some manufacturers are building new features on their own handsets.

Competing for touchscreen sexiness are LGs sleek Prada Phone and HTCs Touch, both of which use preprogrammed finger motions to allow users to manage functions. And Samsung Electronics has introduced several new mobile phones with touch navigation, allowing you to navigate menus, scroll through music playlists, surf the Web and control settings via the "drag and drop" method.

Everyone seems to agree that the iPhone and the enterprise dont mix. Everyone but users. Read more here.

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Nokia, on the other hand, recently announced that it would install small sensors into its handsets so a phone can tell whether its horizontal or vertical, or whether its close to the side of the users head, much like the iPhone.

But just because major handset manufacturers are following Apples lead doesnt necessarily mean they fear defectors or decreased market share, says David Chamberlain, principal analyst for wireless at In-Stat of Scottsdale, Ariz. Instead, it just means Apple has finally shaken the industry out of a decade-long slumber.

Click here to read more about HTCs response to the iPhone.

"The last time anybody paid attention to new cellphones was the StarTac in 1995," he said. "Since then, all [manufacturers] have done is shove more applications in them, but the basic things havent change. The handset vendors worldwide have just kind of fallen asleep. This woke them up."

Greg Sterling, founding principal of research firm Sterling Market Intelligence of Oakland, Calif., agrees, but also argues that handset makers would be daft to ignore the iPhones appeal.

"The demand for the iPhone is partly generated by Apples marketing machine, but its also perceived to be a very usable and user-friendly phone," he said. "The frenzy illustrates that there is pent-up demand for mobile devices that are easy to use and really work. People are struggling with small screens and awkward triple-tapping. Its had an impact already, even if it doesnt penetrate as deeply as some expect."

Exactly how deeply the iPhone will penetrate both the consumer and enterprise markets is still a question mark, especially considering the devices $500-plus price tag. Chamberlain believes the iPhone is a glorified iPod, unsuitable for corporate America, and believes it will not be a blockbuster in general.

"After the explosion of interest has passed, youll see the numbers dwindle pretty rapidly," he said. "The hype is huge, but it will be steady, not a major market share issue for anybody."

But it will make an impact, said Ken Dulaney, an analyst at Gartner of Stamford, Conn. The iPhone probably will hurt some handset vendors more than others, depending on their feature sets, he said. Dulaney believes Palm has the most to lose of any high-end phone, with Nokia not far behind, while RIM, the maker of BlackBerry, may be largely insulated because it provides capabilities the iPhone doesnt.

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