A new advisory from Gartner warned that the iPhone could eat into existing iPod sales, as some buyers will want a converged device rather than the dedicated devices currently available.
"The announced prices limit the iPhone's initial appeal to early adopters looking to extend their media libraries to a device with internet and phone capabilities," said the analyst firm.
But Gartner went on to predict that the newly unveiled handset is destined to become the "premier device" for accessing mobile digital content.
Media companies should be working to make sure that their content is optimised for the iPhone platform, Gartner added.
"Content companies should assume that Apple's dominance of the portable media market will increase with the launch of the iPhone, and should ensure that their content is available for this product," the Gartner briefing advised.
The report stated that Apple has positioned the iPhone as three devices: a widescreen iPod, a smartphone and an internet communicator.
Gartner also stressed that it is important to note the advances Apple has made in redefining the user interface for this type of portable device.
"The iPhone underscores how much work needs to be done on the interfaces of all mobile devices, especially those designed for the acquisition and playing of digital media," the report stated.
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