Jonathan Takiff | Apple iPhone about to debut: Should you bite?

But the price of the iPhone - $499 for the model with 4GB of flash memory, $599 for the 8GB version - puts it in the same lofty territory as Sony's high-tech, multimedia PlayStation 3 game system, which enjoyed a brief spurt of passionate buying among early adopters, but has not really hit home with the youthful masses in the way that, say, the $250 Nintendo Wii has. Surely Verizon, Sprint and T-Mobile are making the same mental analogy, as they plan their next competitive offerings.

Also, you better believe that AT&T - Apple's exclusive (for five years) iPhone marketing and service partner - is going to demand a significant chunk of change (say, $60 to $100 every month) to make this communicator run through all its tricks.

APPLE INSIDER: A tech-industry exec who used to work at Apple reminded me that, "It's conventional wisdom you should never buy a first-generation Apple product." He also said that "the second- and third-generation iPhones are already being prepped for release, respectively, just before Thanksgiving and then at MacWorld in January."

Richard Doherty speculates that Apple could quickly cut the cost of an iPhone to $350 by "eliminating the Wi-Fi." He suggests that models in the near future will feature larger, four-inch screens and AT&T's current, sluggish, 2.5G (generation) transmission technology will be upgraded to a more-robust 3G standard. He also notes that Apple has a history of rapidly increasing a device's memory. "With the iPod it's been 50 percent a year."

Given that a single feature-length film download from iTunes occupies about 1 GB of memory, a movie buff's first-gen iPhone could get clogged fast. One way around that - not yet announced but likely coming - would be for Apple to offer a variation of its .mac head-end data locker service. "You could keep 10 gigs worth of music stored in their server, and then tell the system to download, say, a specific 2 gigs' worth for the weekend - different music than you'd like to hear during the week," said Doherty. "Apple has lots of cute tricks up its sleeve like that one, that's going to make this product very desirable and hard for competitors to match." *