John Dvorak: Apple should pull the plug on the iPhone

John Dvorak makes some strong points about Apple and its iPhone initiative; the mobile handset business differs significantly from the musicplayer business …

… BERKELEY (MarketWatch) — The hype over the unreleased iPhone has actually increased over the past month despite the fact that nobody has seen or used the device. This, if nothing else, proves the power of branding and especially the power of brand loyalty.

It’s the loyalists who keep promoting this device as if it is going to be anything other than another phone in a crowded market. And it’s exactly the crowded-market aspect of this that analysts seem to be ignoring….

… What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a “reference design” and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures.

It should do that immediately before it’s too late. Samsung Electronics Ltd.might be a candidate. Otherwise I’d advise you to cover your eyes. You’re not going to like what you’ll see. …

Source: Marketwatch.com

Update 2/4/2007:
Michael Gartnerberg’s perspective on John article