Apple shook up the mobile phone world with their iPhone announcement. How big is this product to Apple? They changed the name of the company from Apple Computer Inc. to Apple Inc. I think that says something.

Of particular interest to this blog are the iPod and video capabilities of the device. I’ve trashed the notion of mobile video being any sort of major player in New Media in the near future, but the iPhone severely challenges this notion. Why? Two major reasons: a 3.5″ high-res screen (that has a wide-screen orientation) and the natural link to iTunes to purchase and upload video easily.

On the downside, the iPhone will not use its wireless (802.11g) capabilities to connect to iTunes due to licensing issues. This is very unfortunate. Imagine if you could have an iTunes Online presence and be able to use it to purchase music or video while sipping coffee in Starbucks. Too bad, won’t happen, at least not for now.

Another negative is the deal with Cingular. If Treo can be had from any of the major carriers in the US, then why not iPhone? Weird. Even worse, Cingular has the slowest (by far) data network. Purportedly, the Edge protocol is lame. Essentially, what we have here is a Ferrari equipped with bicycle tires.

There have been umpteen reviews of this phone, so I don’t feel the need to go into details. I’ll just render my New Media take. The phone will sell a lot of units and soon dominate its category for Cingular users. It will evolve on the hardware and software fronts. If more carriers are added it will become an iPod killer, maim Blackberry’s efforts to enter the consumer market, and push the Treo into the corporate market. It will make Motorola and Nokia miserable.

It will not make hordes of people start to watch video on their phone. But I think the door is open — if they can get the thing on a true 3G network and work out the wireless iTunes thing then the video part could take off. Yes, I see this as a device that could, like the iPod, change consumer behavior.

One final thought, which I have not seen echoed anywhere else: the company that should be most excited about the iPhone besides Apple and Cingular is eBay. Why? One word: Skype.