No, the marketing was fine. It was a failure of the product. They failed to mention that the battery needed to be replaced every year, which also does not come cheap. It's a shame that the interface was designed so well, but the rest of the plan wasn't.
-They shouldn't have released it without a better battery... at a minimum they could have been more upfront about the issue.
-The phone should be available on multiple networks. (at least two so people feel they have the choice)

In our opinion, the marketing was too hip for the audience that can afford such a device.

Like the iPod, kids dig it; not the business crowd who are more in-tune with the likes of a Treo or Palm.

The push was more music and entertainment than productivity. That message appeals to kids and teens. The average kid can't afford $500 and their parents aren't about to dish it out.

Failure? I don't think so. Ok, so they didn't sell a bazillion after launch, but it is a paradigm shift in phones and they are expensive. The technology they used for the screen to zoom in and out is the leading edge. They are in the early stages of exploring this for computers. The GUI interface and navigation is intuitive and very easy to use. Apple's market position is 'easy'. In fact, so easy, they won't bog you down with pages and pages of manuals on how to user their products.

Why only AT&T? It is an exclusive. Just like the RAZR was when it was introduced. After a period of time, it may be opened up. I understand the real sticking point when Apple was negotiating with carriers was the level of control they wanted over the customer experience. For example, iTunes is the only way to activate the phone. Have you seen Motorola, Samsung, Palm, Blackberry, etc. want to control the customer experience at that level? Not even close.

So, is it worth the dough? I bought one for my wife, and I can say it was worth every penny. She was a bit intimidated by technology and loves it. We were recently on vacation and wanted to know seafood restaurants close by for dinner. Pull out the iPhone, find the restaurants, give the one we wanted a call by just tapping the number on the screen. I have the Palm running on the 3G network and it couldn't do it as fast and easy as the iPhone.

Did AT&T loose? I don't think so. My wife didn't have a data plan before the iPhone. Now she does at $30/month. Assume 100K other existing customers in the same situation and that is $3MM gross incremental revenue per month.

The phone is not a business phone because Apple will not allow them to be on business accounts. Once Apple opens that up and businesses running Exchange Server open the imap capabilities of exchange, they can get into that market. I would have bought one for my business phone in a minute if I could have. While not the cheapest phone, it is the best I have seen.

In my opinion, it's not the iPhone that is limiting sales, but the poor quality of the AT&T network -- widely acknowledged as one of the worst.

Apple's "4P" marketing mistake had to do with "place" -- their decision to sign a 5-year exclusive deal with AT&T. They put all their eggs in one basket (for a princely sum) and the market is telling them they blew it.

I think it does boil down to marketing. While the battery life may be a problem, the real problem of lackluster sales goes back to not focusing the marketing to fit the target. The iPhone is clearly a teen-20 something product but with a price that many can't afford. I do think apple did a great job of generating the buzz they wanted, unfortunately, too few of their target audience can afford $500+ for a phone.

While a contract was indeed signed for 5 years on the iPhone, there is nothing stopping Apple from developing other phones and bringing them to market. I suspect that Apple was very careful in the wording of their agreement to allow other phones to come to market. I suspect that we'll see more phones from Apple and we'll see that value (and the hindrance to the market) of that ATT contract diminish.

Actually, the story from what I heard about the AT&T was that, Apple originally went to Verizon with the plan but with the stipulation that Apple would receive a portion of the income coming in from the user plans. Verizon told them to take a hike so they went to AT&T instead. I had no idea about the battery issue but I guess that just adds to my list of why I wouldn't get one!

"The iPhone is clearly a teen-20 something product but with a price that many can't afford."

I would like to disagree. I have had phone problems and been in a AT&T store more than I would like to recently. Each time I am in there, there is someone buying an iPhone and they don't fit that demographic. My wife doesn't fit that demographic either along with the guy we were talking to when we bought the phone not fitting that demographic.

I don't think that Apple is that misguided to target that teen to 20's segment with a device that has the price point the iPhone has.

If you watch Steve Job's keynote on the new iLife and iMacs, the iPhone is presented as one product in the suite to add additional functionality to their .Mac and iPhoto offerings in addition to the functionality it has as a device.

While it may appear that I am a Mac zealot, I am not. I just think that Apple is starting to get things right and making technology easier for people. So, I respect where they have come from over time. 1984 was a long time ago when they introduced their first 128K Mac, and they have come a long way. Lisa was a flop. The iPhone is not.