Arrogant and unsubstantiated prediction:

The iPhone will never be more than another marginal alternative to 'mainstream' phones. The latest figures show global sales of somewhere under 1.5 million units. While the media is hyping those figures rather shamelessly, in a global market of more than 1 billion handsets per year, it doesn't even scratch the surface.

Beloved of designers and hipsters, Apple products have always been marginal. The iPod is the exception rather than the new rule. The reasons for this are multiple and complex--too muchso for this post--but overly rigid manufacturer control is part of it (tangentially, the primary reason that the US phone market is behind both Europe and Asia, though the carriers are to blame there). A certain exclusionary haute self-selection is another; the iPhone frankly is not a phone for the masses.

Single best parallel world marketing advice? Apple should spin off a sister company to deal only with telephone hardware, build it over time to compete directly with the big names (Nokia, Sony Ericsson, Motorola, et al.), and--most importantly--give it the freedom to diverge somewhat from Jobsian ideology. To think otherwise is arrogance: Apple has neither the cash reserves nor market clout of Microsoft moving into the game console market, but a separate company could indicate a seriousness and long-term credibility that Apple can't muster.

Would a more reasonable price point make a difference? Perhaps. Apple's pricing games certainly aren't winning hearts and minds. But the main thing? Most people don't want such slickness; it scares many of them. It's a nice piece of hardware and I wish them well with their demographic slice. Apple knows 'design', but it still doesn't understand the broader market.

What might their designers be able to do if they were restricted to 'normal' hardware, and an under-$100 retail price? That might be a very interesting product.