The iPhone: Mac or iPod?

The Apple iPhone will change the way people use their cell phones. The question is, will it be the new Mac or the new iPod?

Apple has innovated like this twice before, to very different results.

The Mac introduced mainstream users to mice, icons, windows, and menus. It inspired Microsoft's Windows operating system and pushed the entire PC industry into the GUI world. Yet it has relatively little market share.

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The iPod, on the other hand, has owned the MP3-player market from the moment it became Windows-compatible.

Nobody can touch the smooth integration, ease of use, and elegant design of Apple's music player — not even Microsoft, which turned the GUI ideas introduced by Apple into total PC dominance.

Apple's new phone seems to promise an iPod-like revolution, with a ground-breaking interface that turns information into a physical thing you can pinch, grab, and stretch.

But I think the iPhone will be more of a Mac: a cult item that will influence, rather than dominate, its industry.

Why? The biggest reason is that devil's bargain with Cingular.

The iPod couldn't have swept the world without being compatible with the most popular music format, MP3, and the most popular operating system, Windows.

Anyone can use one, and through the open podcasting system, anyone can create content that feeds the sleek interface of iTunes.

But the iPhone is locked down. Thanks to Apple's multiyear deal with Cingular, most U.S. wireless users will never get a chance to buy one.

Apple's Steve Jobs has made film, TV, and music moguls kneel before him. Consumers have won 99-cent songs and easy, legal downloads of TV's "Battlestar Galactica." And those self-destructive media moguls seem to be reaping profits from the iPod's dominance.

But Apple has met its match in Cingular, whose president of national distribution, Glenn Lurie, told a room full of journalists, "I think [Apple] bent a lot."

Apple agreed to shrink the iPhone's potential market by 25 million T-Mobile subscribers, not to mention short-circuiting the development of a possible CDMA model for Sprint, Verizon, and Alltel.

The agreement also yoked the iPhone to Cingular's variable network quality (every carrier is spotty in different places) and prevented Apple from leveraging carriers against each other to the consumer's advantage.

This isn't a tirade against Cingular. Power corrupts. If any other single wireless carrier were given Cingular's opportunity here, it would have done the same.

That's why Apple needed to avoid signing with a single wireless carrier. All of Cingular's arguments for what Apple and consumers win from the exclusivity deal ring hollow. T-Mobile surely would have been willing to sign on to Apple's "visual voice-mail" technology, for instance.

Sure, hackers will unlock the iPhone and start selling it on eBay for eye-popping prices that appear to be in Hong Kong dollars. That's legal to do now, thanks to a recent Copyright Office ruling. But those megabuck versions will sell only to a slim upper crust of desperate Apple faithful.

What's more, iPhone users won't be able to load third-party applications. Apple has killed its developer community before it even had a chance to get started. And the lack of integration with any popular enterprise system cuts off deep-pocketed business customers.

As the Mac did, the iPhone is introducing new interfaces and new ways of thinking to the American public.

Apple's innovations are radical; they're the necessary reinvention of the phone interface into the "multimedia computer" that Nokia's been talking about, allowing the "seamless mobility" that's been Motorola's mantra.

If this new interface works, Apple may at long last push 800 million phones a year into the world of usable multimedia. But if Apple stays Cingular-locked, developer-banned, and closed-minded, that will be 800 million phones from other manufacturers.

Only a year after the Mac's introduction, a power struggle within Apple led to Steve Jobs's ouster and the beginning of the company's long years of darkness.

Mac or iPod? Jobs, Apple, and anyone who likes Apple's innovations had better hope it turns out to be the latter.