It's been around for years: a rumor that Apple is going to revolutionize the market with a radical new smartphone. A recent New York Times article sparked a new round of discussion on the issue ­ but is there really anything behind the rumor?

Back in August, a New York Times article entitled, "Apple's Chief in the Risky Land of the Handhelds" sparked a new round of speculation on an age-old rumor. Citing a range of factors, from Apple's ongoing software agreement with Pixo, Inc., to features in the newest Macintosh operating system, the article suggested that the company may be developing an Apple-branded phone/PDA, or smartphone, dubbed the "iPhone."

It's an idea that's been around for a while, with one solid piece of information to back it up: type www.iphone.org into your Web browser, and you'll get sent to Apple's home page. There's no questioning the fact that for the past three years, the iphone.org domain has been hosted on Apple's servers. Still, that alone is hardly justification enough for the rumor.

There are a number of reasons to doubt that the iPhone is any more than an old idea, long ago discarded. For one, there's already an iPhone on the market, a monochrome Internet appliance developed by InfoGear, Inc. When InfoGear was bought by Cisco Systems in 2000, the iPhone product was discontinued, but Cisco continues to provide support for it on their Web site.

Gartner analyst Ken Dulaney points out that, even if Apple were to change the name of the device, the smartphone market is a particularly tough one to break into these days. "I seriously doubt that Apple would come out with a phone ­ and if they did, I think it would be a really bad idea," he said. "There are so many vendors now doing so many things, and cost is so paramount."

Strength in Numbers
A number of devices arriving on the market are starting to offer what could be described as an Apple-like experience, suggesting that the iPhone concept may have found its fruition in other places. Apple co-founder Steve Wozniak is on the board of Danger (www.danger.com), a startup which recently released its hiptop device on the T-Mobile network, branded as the T-Mobile Sidekick.

The hiptop, like the Mac, offers a very user-friendly experience. It combines phone and PDA functionality with Web browsing that actually looks like Web browsing on a computer ­ all in a device that's fun to hold, and even boasts multi-colored lights in its scroll wheel. Nothing uniquely Apple-like, but a radically new, user-friendly experience nonetheless.

More directly linked to Apple is Sony Ericsson: an agreement between the two companies now ensures Mac OS compatibility with all new Sony Ericsson phones. Katsumi Ihara, president of Sony Ericsson Mobile Communications, suggests it's a perfect match. "There is great synergy between Sony Ericsson and Apple in terms of how we see new services developing for the consumer, and in our commitment to make applications easy to use," he said.

The soon-to-be-released Sony Ericsson P800 is a smartphone with a built-in camera, a large color screen, and a user-friendly interface which, along with the company's agreement with Apple, leads some analysts to suggest it may be the actual result of Apple's original iPhone concept. The phone uses the Symbian operating system and, according to Ted Brown, Sony Ericsson's director of product marketing, that will allow Apple to put a unique imprint on the phone if it so chooses.

"Our future products will have compatibility with some of the graphics that Apple uses, so you could have a familiar interface." Brown said. "One of the things that the Symbian OS offers is a lot of ability for customization. We can change how the interface appears to the consumer, making it very similar to how the graphics are represented on an Apple computer."

Similar enough to make it an Apple device? Brown says it'll be at least a year before any such Apple-branded products appear, and in the meantime, it's hard to tell. Still, an Apple-branded, Symbian-based P800 would be a much less risky way for Apple to enter the smartphone market than to release a device on its own. Seeing the P800 as the "real" iPhone just might be the best way to make sense of the iPhone rumor.

Newton Nostalgia
It's also worth noting that Apple is still licking its wounds from its last experience in the handheld market, making it all the less likely to leap back in on its own any time soon. First released in 1993 and cancelled in 1998, the Newton was an expensive and embarrassing failure for Apple. Still, the discontinued device retains a loyal following. According to Paris-based developer Paul Guyot, nothing currently on the market can match it.

What makes the Newton unique, Guyot says, is the way its applications are automatically integrated together. "It comes down to what's called the Newton Intelligence," he said. "That's the main thing that retains users. For example, you write, 'Lunch with John,' and it automatically creates a new meeting at lunchtime and lets you pick one of the Johns you have in your address book."

By all accounts, the Newton was simply overhyped before its release, and released before it was ready. An influential series of Doonesbury comic strips in August of 1993 savagely attacked the device's early handwriting recognition weaknesses: while the Newton's handwriting recognition eventually became the best in the industry, it took a while to perfect. "At the very beginning, the recognition was very bad," Guyot said.

Attacks on the device's handwriting recognition errors, Guyot says, along with Steve Jobs' well-publicized aversion to the current range of handheld devices, make it very unlikely that Apple will try to reenter the handheld market without making some enormous changes. "A lot of people would like to see a new product, but nothing can be deduced from what Apple has been doing," he said. "I think the big problem for Apple is that it was a failure, and they don't want that again."

At the same time, the Newton's Inkwell handwriting recognition system has reappeared as a part of the latest version of the Macintosh operating system ­ an indication perhaps, that Jobs wants to try to surmount Apple's biggest failure? Guyot suggests that it just might be possible. "Personally, I don't believe there will be a new handheld from Apple: if they release something, I think it would be a phone or something like that," he said.

Serious Speculation
With the smartphone market getting ever more crowded by the day, and with the failure of the Newton still fresh in Apple's memory, it's easy to see why most analysts doubt the iPhone will ever find its way onto a store shelf. It has been fodder for a lot of creativity, though: a quick search online for "iPhone" will lead you to a number of sites offering their own prototype designs, from modestly inspiring to downright wacky.

John Moltz is editor-in-chief of the satirical Crazy Apple Rumors Site (www.crazyapplerumors.com). The day after The New York Times printed its article resuscitating the iPhone rumor, Moltz posted an article on his site announcing that Apple was working on the iMrMicrophone, an Apple-branded version of the Mr. Microphone toy from the '70s.

Moltz's iMrMicrophone satire points out what made the Times article so striking ­ the fact that the New York Times itself was engaging in rumor speculation. "I'm sure they have better sources than most Mac rumor sites, and they obviously have an editorial process in place, so their speculation is certainly worth a lot," Moltz said.

It was particularly surprising in relation to Apple, which had recently initiated a policy of revoking reporters' press passes if they engaged in rumor-mongering (for this article, Apple failed to respond to repeated requests for an interview). "It came around the time that Apple was cracking down on rumors," Moltz said. "I think that was part of what made people sit up and take notice."

Joking aside, Moltz says, he's willing to believe the Times was right. "It seems like Jobs is repositioning the company to be more of a consumer electronics company than one that just sells computers," he said. "Obviously, the Macintosh is still the core of the business, but there really is a lot of room for them to create some great new products."