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Where the Apple iPhone stands after a year

Write off this week's press coverage as homage to the new 3G iPhone that Apple boss Steve Jobs is expected to unveil. There's a case study here in how to generate anticipation and excitement over a product that accounts for only 1 percent penetration of all embedded mobile phone users nationwide.

No doubt the new iPhone will boast faster Internet download speeds and GPS connection, as well as better security to prevent the phone's unlocking from exclusive U.S. wireless-carrier partner AT&T. Let's undertake a quick overview of where the iPhone is almost a year after its market debut.

All the following first-quarter 2008 data cited is from Nielsen Mobile. The market researcher estimates that there are 2.3 million U.S. mobile subscribers using an iPhone.

Two-thirds of the users are male. One-third of the users ages 18 and older are adults between 25 and 34 years, 19.9 percent are ages 35-44, 15.4 percent ages 18-24, 14.4 percent ages 55-64, 13.3 percent ages 45-54 and 4 percent over 65.

On the income side, 39.3 percent of iPhone users have a household income of more than $100,000. This is a down from 43 percent in the fourth quarter of last year, but still higher than the average mobile consumer's 20 percent.

Tapping media
Seventy-six percent of iPhone users say they send email over their phone, 75 percent users say they use the phone's MP3 player and 68 percent say they use the Wi-Fi functionality.

Nielsen Mobile research confirmed that iPhone users consume mobile media differently.

For example, 82 percent access the Internet over their phone, making them five times as likely as the average mobile consumer.

Thirty-seven percent of iPhone users watch video on their mobile, making them 10 times as likely as the average mobile consumer.

Thirty-three percent of iPhone users send instant messages over their phone, making them three times as likely as the average mobile consumer.

Twenty percent of iPhone users play online games on their phone, making them nine times as likely as the average mobile consumer.

Also, 17 percent of iPhone users stream music over their phone, making them seven times as likely as the average mobile consumer.

Such consumption comes at a price. Per Nielsen Mobile, 36 percent of iPhone users have a monthly bill of more than $100 compared with 20 percent of mobile subscribers.

"The iPhone has been a critical ingredient in the growing mobile media market not just because a couple million people have gone out and purchased one, but because this one device has moved the needle on consumer awareness of advanced mobile features," said Nic Covey, Chicago-based director of insights at Nielsen Mobile.

"IPhone users haven't been deterred by network speeds -- they consume mobile media unlike any other segment of device users," he said. "The 3G version will enhance that experience, while also attracting an unknown mass of would-be iPhone users who held out for an optimized network experience."

First class, now mass
But the iPhone still accounts for only 5.4 million phones out of a global market of 1.2 billion mobile phones -- not Nielsen Mobile data. Nokia, for instance, is said to have sold 437 million mobile phones worldwide last year.

The key for the iPhone's widespread adoption -- besides lowering cost and dealing with wireless carrier lock-ins -- is the device's use as a business tool, not just a personal toy.

So is the iPhone used for business or pleasure?

As Nielsen Mobile expected, 61 percent claim they are personal users and 24 percent say they use their phone for business, but pay the bill themselves. Fifteen percent say their company pays the bill.

"Many iPhone users already use the iPhone for work," Mr. Covey said. "Efforts to make the device even more corporate-friendly will make the iPhone a strong contender in the business-user market."

This week we'll find out what how Apple has listened to the marketplace and improved its iPhone. Even if the improvements are cosmetic, Apple can take credit for the fact that its iPhone has changed forever the way media is consumed and commerce is conducted over the mobile phone.

A big screen, easy navigation, a fairly decent carrier network partner, a pricing plan that mandates data and voice and world-class marketing and public relations: that's what makes Apple the mac-daddy of marketers.