With the iPhone, Apple must now try harder

Jun 10, 2009
Apple's iPhone will face slimmer margins in the near future.

Now that the dust has settled from Apple's iPhone 3GS announcement -- video camera! compass! better battery life! -- it's time to face facts. Though Apple (AAPL) still leads rivals in style and technology, it's not the breakaway frontrunner it once was. The new phone is cool and all, but now Apple is looking over its shoulder -- and it will have to make some adjustments.

That's a big change from just a few weeks ago. Back then, the only credible competitors the iPhone faced were a sleek but boring BlackBerry line from Research in Motion (RIMM) and an exciting but chunky G1 from Google (GOOG).

Since then, however, the landscape has changed dramatically. Suddenly Palm (PALM) appears to have a potential hit with its new Pre, and Google is showing off slimmer second-generation (G2) Android phones. (I've used both the Pre and the G2, and they're pretty darn nice.) All of this new competition is good for consumers, but probably not for Apple's profit margins.

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