Apple (AAPL) iPhone: More Than Just A Pretty Face

Google (GOOG) data show that users of Apple (AAPL) iPhones have been accessing its mobile search tools more than people with any other smartphone.

According to The New York Times "the data is striking because the iPhone accounts for just 2 percent of smartphones worldwide, according to IDC." That would seem to indicate that iPhone users access online services at a rate of 20x customers with other handsets.

Google has built a set of services including it GMail and Reader products which will run very easily on smartphones. That may be giving Apple a bit of a leg up.

The news shows that the iPhone may be making bigger changes in the cell industry than most analysts have understood. Time spent on the internet drives data fees which should push up profits for both Apple and its partners like AT&T (T). The news may also be a product road-map for companies including Nokia (NOK) and Motorola (MOT) which needs to upgrade handsets to make them more appealing to carriers and consumers. Easy web access may be more important than what is reflected in their current products.

Subscriber growth for cell customers is slowing in the US. If Apple is getting people to go online margins for carriers should be going up. The 3g version of the iPhone will be out soon. Then internet use should really take off.

Douglas A. McIntyre