Yesterday, the early reviewers raved.  The public has “sniff[ed] out a winner” … the display is “gorgeous” … it’s a “major leap” … it was simply so awesome, that David Pogue of the New York Times asked, “What’s the point [of this review]?“  Turns out, the point was to ensure that Apple keeps advertising its products in the New York Times.  Because the real reviews started coming in shortly after people started turning their phones on, holding them in their hands, and looking at their screens.

Mashable sums it up: Critical iPhone 4 Issues and Complaints Are Mounting.  This story currently has about 2,500 tweets and 1,500 Facebook shares.  And the complaints are against both the iPhone 4′s major strength and its major weakness.

The iPhone 4 had one thing going for it: pixels.  “Retina” display is the one thing no Android device has responded to (yet).  Sure, nearly every Android phone has a higher resolution display than the 3Gs, but the iPhone 4 beats them all … but it has yellow spots.

Then there was the iPhone’s weakness: AT&T.  Everybody whines about poor coverage, dropped calls, and weak data service already.  How could it get worse?  Well, put your iPhone 4 in your hand and watch the bars drop.  The solution so far?  Use the headphones or buy a rubberized case.  Goodbye sleek design.

Oh well, it had to happen … putting all your eggs in one basket an all that.  That only works with late-night television.

iPhone buyers aren’t going to break their contracts and buy this lower-end phone.  We all know that.  But as the iPhone market goes down-market to build its customer base, cheaper Android phones are going to be a major hurdle.  Why buy the $200 iPhone with 2-year contract and $110/month plan when you can get an Android phone for a fraction of that price (especially if the Android plan includes unlimited data)?  Apple is a one-phone, one-carrier operation.  LG is planning to release 20 Android handsets this year.  There are already Android phones on every major carrier.  This is what Apple is up against.  They can’t win.

It’s the Windows battle all over again.  Apple can win the first few clashes as the fight begins, but once the swarm starts, there’s no way for the closed system to triumph.  The iPhone was able to beat the G1, but it’s got no chance against the Incredible, EVO, Droid, Nexus One, i1, MyTouch, Zio, etc.  The iPhone era is ending.  Retina display isn’t going to save it.

photo credit: magic_quote

The story is just too far fetched.  A drunk drops his phone, won’t return any calls, then the phone finds its way to Gizmodo.  Bullshit.  Here’s why:

1. Apple’s iPad buzz is dead and it needed to get back in the headlines.  There was a lot of hype before everybody tried the thing out, but that’s gone.  It’s a big iPod Touch.  We all realize that.  Sure, a lot of suckers bought it, but the revolution didn’t come.  But perhaps that’s because we’re not sitting close enough to the WiFi.
2. The iPhone allure is dying.  Apple’s products attempt to be luxury, high-end devices (so Apple can charge more).  That gimmick doesn’t work when everybody has one.  If the iPhone is supposed to be the phone of the savvy and successful, you can’t put it in the hands of a Domino’s delivery driver.
3. The iPhone OS 4 announcement fell flat.  Wallpapers and multi-tasking?  That’s so Android 2.1.  Get with it, Apple.  When it was first released, the iPhone was a revolutionary device, but since then the updates have been incremental and boring.  Mostly because …
4. Apple can’t compete with HTC, Motorola, Nokia, Samsung, etc. all at once.  They competition is just putting phones out too fast for Apple to respond.  Every phone starting with the Motorola Droid has had better specs than the iPhone 3Gs.  Hell, Verizon’s HTC Droid Eris is just as good and $0.01 on Amazon.  HTC alone has released a half-dozen phones in the last few months, all of them more impressive than the 3Gs, and Apple has announced nothing except wallpapers and fake multi-task.  Apple just can’t keep up because …
5. The burden of the closed system is starting to crush Apple.  The backlash is mounting and it’s just not going to work out in their favor (just like last time when Apple tried this fight with Windows).  Jobs can say that he’s keeping the walls around iTunes to keep out the porn, but that’s a lie.  The walls are up so that Apple makes more money.  And it’s not just the phone and the OS that are strangling Apple.
6. It’s the network.  A T&T has taken too many hits  for it to recover.  It’s bloodied and wounded and Apple can’t afford to be tied to it any longer, but because AT&T subsidies are so lucrative, Apple has overstayed its welcome and screwed its customers in its own self interest.  The customer base is ripe for rebellion.

So, long story short, Google Android is catching up.  Their growth rate is phenomenal (their market share more than doubled from 11/09-02/10).  The phones running Android are impressive and feature-rich and are found on Verizon’s huge and Sprint’s super-fast networks.  On top of that, they are cheaper.  Price, flexibility, and choice are all stacked against Apple.  They’ve lost this battle before, and their leaked phone ploy shows they realize that they’re losing it again.