To me, the four glaring technology omissions (in order) are:

HSDPA – Cingular is rolling this out right now and has decent coverage near tier 1 city centers in the US. Download speeds for email are finally comparable to 1xEV-DO from Sprint and Verizon.

Microsoft Office document editing and PDF viewing. This won’t hurt phone sales volume, but it will be a deal killer for enterprise users.

iTunes over the air. Well, I guess you wouldn’t want to do this without HSDPA…

SD slot. Not a big omission if you get the 8GB version, I suppose. BTW, if Apple included a HD, then this phone would be a non-starter from a price / form factor / price standpoint. Just take a look at the HD camera phones that came out recently and bombed.

Albert

When I was in Brazil earlier this month, I was told that you can get a prepaid Nokia phone for the equivalent of $40 US dollars. Now that is cheap!

Albert

http://news.yahoo.com/s/ap/20061123/ap_on_hi_te/digital_copyright

Justin:
An unlocked basic phone (Nokia/color) in Belgium costs about 60 Euros, a prepay SIM, about 20 euros including taxes. So without subsidy they’re still dirt cheap. So subsidy can’t be used as the excuse to continue the practice of lock in.

I also think that what emerges will be different that what people expect. Perhaps this is an iPod with Wifi, and VoIP capabilities. That would fit the description on an iPhone.

I think that Apple can succeed in their ability to sell a non-subsidized phone. I believe the single largest advantage Apple has going for them is that they have established a well-known and accepted price of $300 for an iPod without any cell phone capabilities at all. Suppose that Apple offers me an iPodCell $400. That means that the cell phone component costs me just $100. That seems like a good value proposition.

The problem Motorola / Nokia / Samsung / Sony Ericsson / LG have is that I can’t buy an iTunesRAZR / E61 / Carbon / Walkman phone / Chocolate without the cell phone component. And I’m not sure what I’d pay for that functionality. Probably close to zero.

BTW – Apple will not be the first. Samsung is quietly selling the Black Carbon on their website:
http://www.samsung.com/Products/MobilePhones/Globalphones/SGH_D900ZKAUSA.asp
There is a big marketing push for this product worldwide – there are large billboards announcing their Black Carbon lineup in major metros in Asia, Europe and South America right now. Interestingly, I haven’t seen any of these ads stateside. Maybe it is because they know the American public won’t spring 4 bills for an unsubsidized feature phone, even if it is half the thickness of an L2 SLVR.

It will be interesting to see if Americans will spend $400 for an iPod with a phone interface. I believe we will.

Albert

What you seem to be forgetting is the huge amounts many operators spend subsiding phones so that we can buy them well below the price paid by them to the handset vendors. Motorola obviously does not sell the RAZR at 49$ or less !

Presumably if Apple cannot come to an arrangement with the carriers, then there will be fewer people willing to fork out the full price for the iPhone. Quite frankly, if Apple cannot get the carriers to promote their phones, it will be bad for their potential sales..

The main reason that operators try to keep control on the handsets they sell is to increase customer loyalty and reduce churn. Some even go further by having phones pre-installed with the carriers own look and feel (Vodafone Live, Orange Signature, etc). The basic service quality of the phone is assured to a certain extent by having to pass type approvals and certifications like GCF and CDG.

For the record, full disclosure. I work with the Hands Off The Internet coalition. If you’re interested in what we’re about, feel free to follow my website link to our homepage. Thanks.