Although many commentators continue to pick holes in Apple's much-hyped iPhone, financial analysts believe it is selling better than expected in the US, where it launched last week.
Gene Munster, an analyst at investment bank Piper Jaffray, estimated half a million units were sold in the first two days, while UBS analyst Ben Reitzes said its prediction of 950,000 sales this calendar year "could prove conservative".
This ringing vote of confidence from US shoppers - who are paying $499 or $599 for the iPhone and committing to spending at least another $1,400 with AT&T for a two-year contract - has led to renewed speculation about when it will launch in Europe and which network Apple will choose to partner with.
Industry sources have suggested that, if Apple follows the US model and gives an exclusive contract to a single operator, Vodafone - with a network in all major European countries - is the most likely beneficiary.
But, yesterday, reports began to emerge that Apple was close to signing a deal with Telefónica-owned O2 to launch the much-awaited device in Britain with other networks yet to be decided in France and Germany. If the reports are correct, the rest of Europe will have to wait until 2008 to start taking calls on their iPod.
No matter who Apple chooses to partner with, the buzz around the European launch is likely to create a renewed interest in mobile internet services.
"The iPhone is great because it will provide free marketing dollars for everyone in the mobile internet space," says Vincent Ryan, vice-president for sales and marketing with personalisation software firm Changing Worlds.
The issue of which network Apple does a deal with could soon be a moot point anyway. Famed US hacker DVD Jon has already managed to get the iPhone working without activating it with AT&T. iPhones hacked in this way can access Wi-Fi networks and play music but cannot be used to make calls. Despite this, it seems only a matter of time before the iPhone is hacked to work on other networks including those in Europe.
Simply doing a deal with a European network and launching the US version of the iPhone in Europe is not guaranteed to replicate its success to date. In the US, the iPhone operates on older second-generation networks which are not as fast as the 3G networks in which European operators have invested so much.
Not everyone in Europe thinks this is an issue. Darragh Stokes, managing director of Hardiman Telecoms, which advises companies on telecoms strategy, says the network the iPhone runs on is less of an issue for users than for operators. The combination iPod, mobile phone and internet-access device can access Wi-Fi networks, which is how people are likely to access the internet at home or in urban areas where hotspots are common.
"3G is only a big issue depending on what you are doing with the device," says Stokes. "It's not designed for streaming music but downloading and listening later. To get the average revenue per user up, the networks are going to want it to become a mobile gaming device where you are online all the time."
The issues with creating a 3G version of the iPhone according to industry insiders are size and power, both of which are critical issues for Apple. The company has a history of producing products that are slicker and more stylish than its competitors, which allows it to extract a premium price from its customers. An iPhone that is bulkier due to the inclusion of 3G chips, even if it was capable of super-fast downloads, would not fit that sales model.
The issue of battery life is an Achilles heel that threatened the iPod at birth. Few early adopters achieved anything like the 12 hours per charge that Apple promised and thousands of iPods had to be shipped back for new batteries. While it's annoying to have an iPod battery run out, losing power in a mobile phone is much more serious.
Apple claims that in common with other lithium ion batteries, such as those used in notebook computers, the iPhone battery can handle 300 to 400 charges before battery life deteriorates. It also says that the device is capable of eight hours of mobile phone talk time or 24 hours of music playback.
Once the battery does start to lose charge it will cost US users $85.95, plus local taxes, to get a replacement unit from Apple.
While, in the US, the iPhone has been a revolution, European consumers can already purchase smart phones that access the internet at high speed and play digital music such as HPC's Windows mobile devices and high-end Nokia N-series phones.
"It's all about the convergence of the mobile and fixed internet," says Patrick Fearon, managing director of mobile software firm Trust5. "This is not an Apple-led phenomenon but this is clearly the way forward being able to access everything you do on your PC on your handset."
One Irishman who is betting on the continued success of the iPhone is Michael Deery. Having moved to the US in 1994 on a soccer scholarship to the University of San Diego, Deery is now one of the co-founders of iPhoneWare, one of the first companies developing software, tools and accessories for the new phone.
However, a comment from one of Deery's co-founders underlines the differences between the US and European use of mobile technology.
"iPhone is the first step towards a smaller, lighter cross between a cell phone and a laptop, allowing mobile access to everything, everywhere," said Prakash Gupta, technical director of the firm. In Europe, mobile access to corporate e-mail and other data is taken for granted.
For consumers there's also no guarantee that they will decide that iTunes is the best music store to grab their music on the move. Innovation applications such as Nutsie and MusicStation are providing streaming access to music using Europe's higher-speed networks.
"Despite all that, do I want one?" asks Stokes. "Yeah, of course I do."
Apple will be hoping that millions of European consumers have a similar response.
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