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Apple stock jumped 6% yesterday after CEO Steve Jobs unveiled the iPhone, a combination cellphone/iPod/Internet communications device, at the Macworld Expo. The iPhone, which will be priced up to $599, is set for a June release. AT&T's Cingular unit has signed an exclusive deal to distribute the device and provide U.S. wireless service. Price could be a problem in the U.S. market, where handsets, including some that offer music, sell for less than $100 with carrier plans. Price pressures are fierce: Motorola, which once charmed the market with its sleek RAZR phone, has gone from selling it for $500 to offering it free with service contracts. Apple cannot drop the price of the iPhone without cannibalizing its iPod business. In the past year, Motorola, Research in Motion and Palm have all released smartphones that will compete with the iPhone. Shares of high-end Asian handset makers took hits on news of the iPhone's release, but cellphone component makers like Broadcom and some telecoms gained. Flash memory chip manufacturers might also ultimately benefit. To reflect this push into consumer electronics, Apple changed its name from Apple Computer to Apple Incorporated. Apple appears to have reached a deal with Cisco to use the name "iPhone," which Cisco has trademarked and is using for some Linksys phones.

• Sources: Press Release, Forbes, Wall Street Journal, Mercury News, Reuters, USA Today
• Related commentary: Apple Reinvents the Mobile Phone -- and Itself, Apple's iPhone Partnership With Cingular Could Drag It Down, iPhone: Who Stands To Gain and Lose?, Ten Thoughts On The iPhone, Cisco Reacts To Apple's Use of 'iPhone', Apple-Cisco iPhone dispute resolved (ZDNet), Apple's iPhone Revealed: A First Hand Account From MacWorld. Conference call transcripts: Apple F4Q06 (ended 9/30/06)
• Potentially impacted stocks and ETFs: Apple Computer, Inc. (NASDAQ:AAPL), AT&T (NYSE:T). Competitors: Verizon Communications Inc. (NYSE:VZ), Sprint Nextel Corp (NYSE:S), Motorola Inc. (MOT), Research In Motion Limited (RIMM), Palm, Inc. (PALM), Google, Inc. (NASDAQ:GOOG), Yahoo! Inc. (NASDAQ:YHOO). ETFs: Internet Architecture HOLDRs (NYSE:IAH), iShares S&P Global Technology (NYSEARCA:IXN)

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Source: Apple's iPhone Wows Market