The iPhone has an advanced user interface, unlike anything before it. It is also very, very expensive. That could be a prescription for another Newton-like fiasco according to Computerworld on Monday.

One reason it [Newton] failed," David Haskin wrote, "was that the first iteration of its handwriting recognition wasn't very accurate and, since handwriting recognition was a new technology, it was ridiculed mercilessly by comedians and the press. But at least as big a problem was its price: $700 when it was launched.

Apple appears to be repeating the cycle, according to Mr. Haskin, because some recent polls have suggested that few potential customers seem to be willing to foot the $500 to $600 bill for a mobile phone.

Mr. Hasin continued, "It's also becoming clear that Apple may be suffering from excessive hubris. That is evident by its strong demands on its partner in the U.S., Cingular/AT&T. The demands, including a slice of the cellular revenues and control of the sales channel, were so strong that Verizon Wireless turned the deal down."

But not so fast. What's different this time is that there is a clear market demand for a better mobile phone than what's been available. In the case of the Newton, it was a solution chasing a problem. Also, the surveys tend to suggest that Apple and AT&T are very well aware of consumer price sensitivity. Whether or not it's wise for the two partners to reduce the previously announced price of the iPhone before it ships and customer demand is gauged remains an open question.

As for business deals, AT&T likely feels that their gain is Verizon's loss.