My god, it's real... and it's beautiful. In case you live under a rock, Apple's new iPhone is the sexiest chunk of hardware to grace god's green earth since, well, since the iPod was invented. And that's saying something.

Where to begin? It's running OS X -- so it's really a mini PC crammed into a phone casing. Multi-touch is a technology I'd previously only seen demo'ed in a few experimental pieces of hardware: it's touch-screen that understands multiple simultaneous touches, so you can do wonderfully intuitive things like squeeze photos smaller and stretch lists longer. It's also, finally, that Internet tablet I've always wanted: it does IMAP email, provided by Yahoo!; maps, provided by Google; and, pretty surprisingly, even to us who work there, web search provided by Yahoo!.

I have to break my usual self-imposed ban on blogging about work for a moment here, because it's so seldom that the Y gets one over on the G in such a big, public way. The search in question is our new oneSearch feature, which we announced at CES only yesterday. The idea is that instead of searching the web on your phone and getting results in the form of PC-sized websites crammed into a tiny screen or haphazardly adapted for your phone, you get the actual information you were looking for, carefully pre-formatted specifically for a mobile phone. Search for the movie, and you get the movie rating and details instead of just a link to IMDB (though you get that too). If you're logged in, you can tell it where you are, and it will also tell you if the movie is showing in your area and when. If you're searching for a band, it'll tell you if they've got any gigs near you. And then all the usual stuff like sports scores, weather, blah de blah. Also, I did some of the work on the official website announcing all that stuff, so I'm quite pleased to see it plugged ;-) But back to Apple's shiny hardware.

The iPhone can detect which way up you're holding it -- so if you hold it like a phone it looks like a phone, and if you hold it on its side it goes into widescreen mode. I can think of some instances when that might be less than useful, but the idea of a small device that can detect its own motion brings to mind all sorts of geeky possibilities. Plus it's got wireless networking, bluetooth, blah de blah. Everything you'd want in a small computer. Oh, and it's got a camera. Of course it's got a camera. And it's a wide-screen, 4GB or 8GB iPod, just as a by-the-way, in case being 3 other types od device already wasn't good enough.

Frankly, this is always the kind of mobile device we knew would arrive and change the landscape. Personally, I wasn't expecting it to be out for another 3-5 years -- roughly how long away I think Nokia and SonyEricsson are from making similar devices at the correct price-point to get adopted by the major networks. But now it's here -- or rather, in June it's here, if you live in the states at least, and boy am I glad I'm about to move there -- and it's going to be very, very interesting to watch everybody scramble to adjust.

The immediate losers are going to be the "pretty hardware" phone makers: Samsung, Motorola, I'm looking at you here. Those phones were always style over usability, but now the 800-pound gorilla of industrial design is here and you guys are out of the game. SonyEricsson are also going to be scrambling: they were, until 6 hours ago, the leaders in convergence devices -- phones that play music and do camera stuff quite well, as well as being half-decent phones. Unless they have been hiding some very awesome hardware up their ass for the last 6 months, they are going to find it very hard to bring out a device of comparable power by June.

So what of Blackberry? Blackberry have the market for mobile email sewn up at the moment. If the iPhone is going to make any headway into that market, that soft-screen keyboard better be really really good for thumb-typing. If it's comparably usable, then Blackberry is toast, because IMAP email is a hell of a lot cheaper and more accessible to small businesses than the Exchange servers you need for a Blackberry. And nobody is buying a Blackberry because they think they look cute.

I think the closest thing Apple has to a competitor in this space is Nokia. Nokia already have a wireless Internet tablet, they already have a 4GB mp3 phone, they already have mobile email device. All they have to do is cram all of those into one device ASAP, and when you're looking at a price ceiling of US$600 even with a 24-month Cingular contract (so you know Cingular is subsidizing this thing up the wazoo) that means you can do it pretty damn expensively. If they can manage to put it all together with an operating system that does crash all the time (and the E61 is promisingly stable) then they are a contender. But still a big if.

Speaking of the 24-month Cingular contract: this move also changes the game for network operators. If they pull a similar trick in EUrope, then for one thing, it significantly raises the price of a "phone": people are used to getting phones for free. Who pays $600 for a device you only have for an average of 12 months before upgrading? It also extends the life: if your contract lasts 24 months, you're keeping your phone at least 2 years, when the upgrade-cycle in Europe is currently down to 11 months. It also has the potential to change the way Europeans think about their phones: instead of being a disposable device to be upgraded at the earliest opportunity, it becomes a valuable item you make an emotional investment in, like your iPod or your laptop. I don't know what US attitudes are like in these matters; I'll tell you after I move there.

So well done, Apple (it's Apple, Inc. now, no longer Apple Computer): you've not just entered the mobile space, but redefined it with only your second product (after the disastrously lame ROKR). 2007 is going to be a very, very interesting year for mobile.