Part of what makes the iPhone special, other than its impressive number of problems this year, is the fact that it promises a near no compromise Web experience on a phone-sized device. (Granted, “phone size” seems to be drifting a bit larger these days.)

The 2.0 iPhone has had an impressive start but seems to have run into some hardware quality problems, some cloud quality problems, and Apple seems to be repeating the Atari mistake with their Application Store. (Atari nearly died when they failed to ensure the quality of their games in the early ‘90s when buyers abandoned their game console). Several of us actually argue the 1.0 iPhone is better.

Bad timing, given that Intel is pushing two new portable platforms which could eclipse the iPhone if done right (big “if” here), and Google’s Android phone platform is on final countdown and the first, from HTC, is gorgeous. In addition, Google appears to be doing a better job ensuring most of their initial applications aren’t crap, something that Apple may want to emulate.

Apple iPhone Stumbles

Were this any other company, like say Motorola, and it had a third of the problems Apple has had with the 2.0 iPhone, we’d likely be wondering if the firm could even stay in the cell phone business. But Apple is a marketing powerhouse and they can dummy up like no other vendor and ride out almost any storm.

Still, this is an impressive storm. By now most probably have figured out that Apple rushed the latest iPhone to market before it was fully tested and that the back end services weren’t done either. In addition, those flocking to the new Apple Application store, while they’ve found a number of cool applications, many are crap. And some of the best ones Apple has pulled the plug on because they did things like allowing you to use your expensive data plan for your laptop, things that Apple and AT&T didn’t want you to do.

Finally, the hardware failures that new iPhone experienced evidently is causing a lot of dropped calls, and typically folks buy cell phones to actually use them as phones. Granted, with the iPhone, a lot of folks buy them to look cool, but how cool are you really if your phone is just an expensive non-functional media player?

Well, competition is coming. And it’s coming in several flavors.

Netbooks

This is the iffiest platform because, to many of us, Netbooks are small, slow notebook computers. I’ve been using a Linux-based Dell box, using Windows XP, that will also run Windows Vista Basic. I’m a Vista user myself and while I can appreciate the number of folks who want to run XP, the experience with XP on one of these things is like a buying a brand new hot car with an interior from a car from the ‘90s.

The Ubuntu experience, while it improves dramatically on the set-up time, does far less once it’s set up. And I find I’m having to learn a whole new set of tools and utilities to use it. It actually feels older than XP does and I still think the gOS, an Ubuntu derivative, would be a better choice for these products.

Were it me I think I’d go Windows Vista Basic on this product, given the choice, but were I making one I think I’d try to take something like Stardock’s WindowBlinds and create something much more cutting edge and stunning to look at.

The advantage the HP has is that it’s a fully capable small notebook computer, which means I can do real work on it and the keyboard is large enough to actually work on. It will clearly run IE, Firefox, and Opera, so browsing is uncompromised. And while it’s a little slow, for most things it seems to run adequately. And man, is it ever light.

I’m comparing this to the Redfly which I still think is the more interesting product – a blend of the two might be perfect for this form factor. We’ll see if someone figures that out.

Finally these things lend themselves to cloud based services for content and entertainment: Services like Live Mesh, and SugarSync to sync them to other machines or content services like an application or media store. You can use generic PC resources but, for a device like this, I think a more iTunes /MobileMe offering would be more appropriate.

For this generation the Netbook probably isn’t much of a threat to the iPhone. It’s more a laptop focus and even here I’m not convinced the unique aspects of this product are yet being well showcased by anyone.

Page 2: Mobile Internet Devices

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