Apple unveils iPhone

NEW YORK (Reuters) - Apple Computer Inc. on Tuesday unveiled its eagerly anticipated iPhone, saying the slim touch-screen device that combines the popular iPod digital music player will begin shipping in the United States in June.

Chief Executive Steve Jobs told the Macworld expo that Apple had teamed up with AT&T's Cingular Wireless to distribute the phone in the United States. An 8-gigabyte model will cost $599 and a 4-gigabyte model will cost $499.

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Below are comments from analysts:

JOSH MARTIN, ANALYST, YANKEE GROUP MARKET RESEARCH FIRM:

"It's definitely a compelling product."

"The functionality of the device seems like it's far beyond anything that's available today."

"But I wonder why it doesn't have more storage. You can't really put a ton of video on it if it's only 8 gig."

CHARLIE GOLVIN, ANALYST, FORRESTER RESEARCH

"I expected them to take the core functions of phone and make it really easy to use -- and they've done that."

"The surprise was the video iPod had been integrated. It looks like a really great media experience and simplifying the whole phone experience at its core function."

"They get more leverage out of one partner (Cingular) where they can still keep that premium, keep the demand ... very very high and drive the customers to one price. Their efforts would have been limited with multiple partners."

ANDREW SEIBERT, STEWART CAPITAL ADVISORS:

"I'll wait and see if it is as good as the iPod. Verizon (might have to) look out and all the other manufacturers may have some problems. Some of this is already done with phones that link into your computer. It will be interesting to see what the bells and whistles will be."

SHANNON CROSS, ANALYST, SOLEIL-CROSS RESEARCH:

It will cause consumers to "upgrade some of the existing iPods but more importantly, (it will be) compelling competition for smart phones that are out there."

SAM RAHMAN, PORTFOLIO MANAGER, BARING ASSET MANAGEMENT

INC., WHICH OWNS APPLE SHARES:

"Right now the stock is trading on new product announcements. And if the AppleTV and the iPhone, if it gets enough product momentum and excitement going in the stores, it could drive the additional growth for Apple at a time when they need to find another hit beyond iPod."

ED SNYDER, ANALYST, CHARTER EQUITY RESEARCH:

The iPhone "should be a good seller from a music point of view and music is one of the very few things you can add to a cellphone that dramatically increases its appeal."

"The problem Apple faces is technology and distribution. Touch screens are very iffy and we've only seen a few of them be reliable in phones."

JEFF KAGAN, ANALYST, KAGAN RESEARCH, IN A RESEARCH NOTE:

"Several million iPhones will be great news for Apple, but I don't think at this point it will make a big difference to the industry competitors."

"This is similar to other moves from Disney and ESPN and others. Some work and some don't. I think Apple could do well with this, but we'll have to wait and see. We thought ESPN would do well and they didn't."

MICHAEL NELSON, ANALYST, STANFORD GROUP:

"Historically, Cingular as well as the other carriers have subsidized handsets ... in the next six to 12 months I would certainly expect Cingular to subsidize part of that cost."

"This (iPhone) does have the potential to shake up the competitive landscape even if it's not a device that's targeted to mass consumers ... it's clearly targeted toward the highest-value subscribers and they are the most profitable subscribers."

ROBERT LUTTS, PRESIDENT, CHIEF INVESTMENT OFFICER, CABOT

MONEY MANAGEMENT:

"We are thinking that by the second quarter we will start to see some visibility (on the iPhone's impact on revenues) and initial estimates are that it will have a minor 20 cents impact on quarterly net income. These are really tough to judge at this point. Now it is time for the consumer to vote."

(Reporting by Chris Sanders, Jim Finkle, Michele Gershberg, Muralikumar Anantharaman and Yinka Adegoke)