In a year in which both Microsoft and Apple shipped major desktop operating system updates, one new computer-based system stands out above the others. Yes, I'm talking about Apple's innovative iPhone, with its multi-touch user interface, rotating screen, highly portable form factor, and multi-faceted capabilities. Because I didn't trip over myself praising the iPhone and ignoring its many problems like most other reviewers, some have misunderstood my feelings about the device. Allow me to be clear, though I think I already spelled this out in my multi-part iPhone review: Apple's smart phone is an important, trend-setting device, with a user interface that I believe will eventual rank up there with the desktop GUI and the Web as a major epoch in human-PC interactivity.

The problem, of course, is that the iPhone is deeply flawed. I've been using my iPhone as my primary phone and a daily mobile companion for over six months now, and I'd like to summarize the many things that are still wrong with this device and discuss how Apple can fix these issues as it updates the iPhone for 2008. Some issues can and should be addressed via software updates which, quite frankly, I had expected more of in 2007. Some, unfortunately, may require new hardware. But the iPhone is too technologically important to ignore, even with its flaws. If Apple can tackle just some of these issues in early 2008, I will have little reason to not wholeheartedly recommend it to readers.

Let's dive right in. Unfortunately, it's a long list.

Pricing

While Apple did drop the price of the iPhone by a whopping $200 to $399 in August 2007 (and lose the "low-end" 4 GB model in the process), the price of this device is still extravagant. Once you factor in fees and taxes, the iPhone will cost you a minimum of $70 a month in the US, because Apple stipulates that you must order a data plan with the device. While this cost is arguably on par with the cost of other data plans, the fact that it is a requirement rather than an option (as with all other data plans) is what makes it so problematic. You should be able to buy a data plan-less iPhone, and just use its phone, iPod, and other offline applets if that's what you prefer and can afford. In this instance, Apple's no-choice policies really bite consumers where it hurts, in the wallet. The real-world cost of an iPhone right now is $2000 to $3000 for two years of use, depending on the service you order, and that doesn't include international roaming charges, which can be quite significant.

Resolution: Apple and/or AT&T need to lower the data plan costs for the iPhone, introduce lower-cost data plan options, or offer the iPhone without a data plan. Consumers interested in the iPhone but not interested in paying $70 a month for the next two years should look at the iPod touch: It features much of the technology that makes the iPhone so special and it does so in an even sleeker form factor.

EDGE network

While a lot has been written about AT&T's horrid EDGE network, it can't be stressed enough: EDGE is a joke and this "2.5G" network is clearly the iPhone's Achilles Heel. In my own admittedly unscientific tests, EDGE was less than one-third the speed of Verizon's EV-DO network, and while the results are certainly better looking on the iPhone, the access speed is so slow it's almost laughable. I can't even count the number of times this problem has bitten me as I tried to look something up online only to succumb to the dial-up-like experience that is EDGE. The network is simply shameful, and it colors what is otherwise a stunning device.

Resolution: It's unclear whether Apple will be able to move current iPhone users to a true 3G data network without requiring an expensive hardware upgrade (i.e. a new iPhone).

No high-speed modem for your PC

While Verizon, Sprint and even AT&T sell smart phones that can work as tethered or wireless high-speed modems for laptop computers, the iPhone offers no such support. This is one of the features I really miss from Verizon, and it would make the iPhone far more valuable as a traveling companion.

Resolution: Obviously, this kind of functionality won't be viable until Apple sells a 3G-equipped iPhone, so this issue is tied to the iPhone's biggest problem, it's support of the lackluster EDGE network.

No hardware or software expansion options

The iPhone cannot be expanded with additional memory via a standard SD card or similar memory option. This isn't necessarily a huge problem given that the iPhone comes with 8 GB of flash storage, but the option would be nice. And while 8 GB might seem like a lot of space--and is, compared to other smart phones--it pales in comparison to the storage on many portable media players.

The iPhone is also a closed box. You can't install new applications or uninstall the built-in apps you don't want.

Resolution: This will require a new iPhone device. The current version does not offer any form of expansion capability. My guess is that Apple will sell new iPhone models in 2008 that offer more than 8 GB of storage, which should alleviate this problem.

On the software side, Apple has already pledged to "open up" the iPhone in 2008. We will find out soon what form this will take and what the schedule is for making it happen.

The rotating screen that doesn't

While Apple touts the iPhone's amazing rotating screen as a key feature, the reality is that the screen rotates in only a few of the available applications, and then in an unpredictable and haphazard fashion. Particularly egregious is the virtual keyboard, which only works in portrait mode but for one application, the Safari Web browser. And even then, you can't rotate the screen once the keyboard is displayed. Apple promises a lot here and under-delivers in a huge way.

Resolution: This is a software fix and could and should be added across the board to existing iPhone applications over a period of time. Ideally, the rotating screen would work predictably and uniformly across all iPhone applications.

Virtual keyboard

While Apple fanatics were quick to hop all over complaints about the iPhone's virtual keyboard, a simple truth emerged after all the tests were completed: Physical keyboards are simply better than virtual keyboards. That said, the trade-off here would be fair if the iPhone's virtual keyboard would actually rotate with the screen and work in both portrait and landscape modes. It doesn't.

Resolution: A hardware-based keyboard would require a new iPhone device or an add-on of some sort, the latter of which would compromise the iPhone's elegant form factor. I think the virtual keyboard is good enough to be usable for light typing tasks (i.e. typing in Web URLs and search terms), so the least Apple can do here is make the virtual keyboard work consistently in all applications, in both portrait and landscape mode. Being able to access the keyboard in the more grip-friendly landscape mode would be a huge plus. This only requires a software update.

Buttons, buttons, buttons

Steve Jobs is so insistent on overly-simple hardware designs that he often imbues Apple's products with functional deficits in order to retain a clean look. That's why the company's laptops don't sport ugly memory card readers. It's also why the iPhone lacks a hardware Back button. This requires iPhone users to constantly remember which application they were in previously and then manually navigate back to the home screen and then find and tap the icon for the app in question so that they can go back to where they just were in the UI. What makes this particularly problematic is that most iPhone functions can't be accessed without first looking at the device.

There's also no dedicated camera button. So if you want to use the iPhone's camera, you have to look at it, log on to the device, navigate to the home screen, and click the Camera icon. Hopefully the thing you were going to photograph is still around when all these steps are completed.

Resolution: Obviously, Apple would need to change the iPhone hardware to address this concern. I don't see this happening, so iPhone users will simply need to change their usage habits to adjust to how the iPhone does work.

Battery

As is the case with its iPods, Apple does not allow iPhone users to replace the battery. Frequent travelers would love this option, as would anyone who runs into an issue with declining battery life over time. (Worth noting: The iPhone does obtain excellent battery life.) Instead, you'll need to send it back to Apple for replacement and do without the phone in the meantime.

Resolution: This is another issue that would require new iPhone hardware. As with the button issue noted above, I don't see Apple making this change. The reason is that an externally changeable battery would increase the size of the iPhone and make it less attractive. Apple will always pick form over function.

Lackluster camera

While the iPhone sports a 2 megapixel camera, it is lacking some pretty obvious features. There's no flash, for example, and no zoom of any kind, digital or optical.

Resolution: This is yet another issue that would require a new iPhone device with a new camera that included both a flash feature and some form of zoom capability. Current iPhone users will have to make do with the camera that's in the device.

PIM synchronization that doesn't work

While the vast majority of iPhone users are also Windows users, Apple seems to have done very little to enable universal PC-to-iPhone sync. It supports just one calendar source, Outlook, and that sync feature is so horribly broken that it actually doesn't work for many people. The iPhone doesn't support Outlook tasks synchronization at all. For contacts sync, the iPhone works with Yahoo! Mail contacts, Windows Contacts, or Outlook, but not Hotmail, Gmail, AOL, Eudora, Thunderbird, or any of the other applications people actually use in the real world. Email sync, while somewhat problematic at launch, has improved somewhat lately since Google added IMAP support to Gmail: Previously, you could only access that service via POP3 or Web access on the iPhone.

The iPhone also syncs browser bookmarks, but it only supports Internet Explorer (IE) and Safari, a browser that no one actually uses on Windows. Curiously, the number two browser, Firefox, is not supported at all.

Resolution: I cannot believe that Apple hasn't raced to improve the iPhone's PC sync functionality already. This is a major software upgrade that can and should be made in 2008. I'd like to see native support for popular sync end-points like Hotmail contacts/email/calendar, Gmail, and Windows Vista's Windows Calendar, as well as Firefox. Apple's subtle anti-PC stance is cute on the Mac side, but it's just an unnecessary hindrance to PC users. Again, that is the largest group of iPhone users, so it's crazy that Apple would offer them just a second rate sync experience.

iPod issues

Apple bills the iPhone as the ultimate iPod (or at least it did until the iPod touch debuted), but the reality is that the touch-enabled iPhone interface makes its iPod functionality a mixed blessing at best. And when you add to that the fact that the iPhone's iPod application is notoriously buggy and crashes a lot, the picture gets even murkier.

The biggest problem with the iPod application is that it requires you to touch the screen to use it, unless you just need to adjust the volume (which can be handled via the iPhone's hardware-based volume up and volume down buttons). It doesn't support any iPod games (admittedly not a huge deal).

Resolution: The iPhone is, first and foremost, a touch-enabled computing device, so there's no way to really address most of the iPod application issues I've mentioned here: Instead, iPhone owners will simply need to understand that anything more complex than changing the volume will require taking the device out of a pocket and looking at and interacting with the device. (Optionally, Apple does include a wired ear bud set with the iPhone that also provided a handy play/pause toggle.) The stability stuff is obviously software related, and Apple has already taken steps to address these issues. I don't feel that iPod game support is necessary.

Non-configurable applications, home screen

The iPhone doesn't offer any way to install or uninstall applications, remove or add application shortcuts from the home screen, or configure the home screen in any way. (You can't even add links to Web applications like Google PicasaWeb on the home screen.) These issues are expected to be resolved sometime in 2008, but remain a major issue today.

Resolution: This is purely a software issue, and one that can and should be addressed in 2008.

No cut/copy and paste

Though the iPhone is based on Mac OS X, it doesn't support that most basic of computer features, cut/copy and paste. So you can almost never move information between applications on the device.

Resolution: This, too, is purely a software issue, and one that can and should be addressed in 2008.

Weak Google Maps application

While the Google Maps application that comes on the iPhone is attractive, it's actually quite limited. There's no GPS hardware in the iPhone and no way to legally add it, so you have to know where you are to begin with, making the notion of a map somewhat superfluous. It doesn't rotate, and works only in portrait mode. And you can't display a combined map/satellite view as you can on the Web.

Resolution: For true GPS support, Apple will need to release a GPS-enabled iPhone or, at the least, allow third parties to sell GPS hardware that integrates with the existing iPhone. A less accurate but at least adequate solution can be achieved via a software update that provides cell phone tower triangulation. It's unclear what effect such a thing would have on battery life, however.

Some Google Maps issues--like a combination map/satellite view--can be solved via a software update.

Weak Notes application

The Notes application on the iPhone is almost useless: You can't use it in landscape mode. It features a bizarre, non-configurable font. You can't synchronize notes with your PC, though you can email them if you'd like (and if you've configured an email account on the device). There's no voice recording functionality at all.

Resolution: The Notes issues are purely a software issue and can should be addressed via a software update in 2008. Since the iPhone obviously has a microphone--it is a phone, after all--it seems like voice recording would be a relatively straightforward software fix as well.

Safari

Instead of basing its iPhone Web browser on one of the two browsers that represent about 97 percent of all Web traffic (IE and Firefox), Apple uses its own nonstandard Safari browser instead. It doesn't support basic Web technologies like Java or Adobe Flash. And you can't even install your own Web browser if you'd like something better.

Resolution: This situation should resolve itself in 2008. First, with millions of people now browsing the mobile Web via iPhones, Web site operators will be compelled to offer iPhone-enhanced versions of their services. Second, Apple will surely continue to improve the iPhone's version of Safari and may eventually support technologies like Java and Flash. And finally, because the company is opening up the iPhone in 2008, it's likely that we'll see competing browsers, like Opera and Firefox, appear on the device soon.

Wi-Fi iTunes Store limitations

While Apple did enable wireless access to the iTunes Store in late 2007, it only works for songs and only if you're connected to a Wi-Fi network. (I'm guessing Apple knew its fans would freak if they saw how long it took to download even a single song over EDGE.) You can't download videos of any kind, audiobooks, podcasts, or other iTunes content using just the device, and you can't wirelessly sync the iPhone to your PC.

Resolution: This is purely a software fix. I expect Apple to improve device support for the Wi-Fi iTunes Store and add wireless sync in 2008.

Pathetic ringtone support

While the iPhone's support for ringtones is getting better over time, Apple still makes it very difficult for users to get ringtones on their device. You actually have to edit the ringtones inside of iTunes yourself, after paying for the song twice. And it only works with certain songs, of course, and most certainly not with any of the songs you already have in your library. I'm not a big fan of ringtones personally, but this is a common cell phone feature that's already better implemented elsewhere.

Resolution: It's unclear why Apple doesn't at least offer consumers the option of buying pre-made ringtones. Most consumers don't want to edit their own MP3s or purchased songs. They want to pay a couple of bucks for a professionally made ringtone. This is a no-brainer and could easily be implemented.

No MMS support

While the iPhone offers decent support for SMS (Short Messaging Service) messaging, it does not offer any support at all for MMS (Multimedia Messaging Service), an extension of SMS designed for sending text, audio, pictures, and even video via mobile phones. This omission is curious given the iPhone's multimedia prowess, and one can only imagine that Apple is planning to update the device in the future to support this obvious feature.

Resolution: This is clearly a software fix that Apple could easily implement. There's no reason the iPhone can't be the premier MMS device in the world.

Final thoughts

The iPhone is too important and too cool not to be successful, but Apple has a lot of work ahead of it if it wants to make this device truly ubiquitous. I think they're going to do the right thing, and hopefully this list will at least point them in the right direction. There are indications that a coming iPhone software update--no doubt timed for this month's Macworld trade show--will address a few of these issues. Even now, the iPhone is amazing. But just think how amazing it could be when it finally matures. Here's to a coming year of iPhone updates.