As the launch of the Apple iPhone draws nearer and nearer, people are wondering whether the iPhone will be taking the community by storm or will be remaining as an expensive gadget owned by the elite.

The iPhone will be available for sale on November 9 in Apple’s retailers, O2’s High Street stores and in Carphone Warehouse stores. That adds up to 1,300 outlets, not including their websites, where the iPhone will also be available. The price tag would be £269 and there will be an 18-month contract minimum. O2 has three monthly plans available: £35, £45 or £55, which will be dependent on the number of text messages and voice minutes included.

Wi-Fi and unlimited data will be available for all plans, but will be subject to the fair usage policy. However, O2 is advertising the launch as “the day the internet fits in your pocket” and has even declared that they will be removing the usage policy to encourage those who will be purchasing the iPhone to get connected to the Internet through their new gadget.

O2 is turning their focus on their consumer market and is anticipating high iPhone sales from the launch up until the Christmas season. And although analysts concur that the device has a great design, they are not that confident that it will be successfully penetrating the mass market, due to a couple of reasons.

One Juniper Research principal analyst, Windsor Holden saw the iPhone’s absence of 3G capabilities as a “major handicap” because it is something that a lot of other mobile phones already have.

As Holden said to Silicon.com, “The comparison I make is you say look there’s a wonderful sports car, it looks superb, has all the whistles and bells – and you open the bonnet and it’s got a tiny little Robin Reliant engine in it.”

The iPhone depends on an EDGE connection for web browsing, which is the connection that some 7,500 Wi-Fi hotspots also makes use of. This is why the speed for data transfer, uploading and downloading, are not as fast compared to a 3G connection. The coverage of an EDGE connection is also limited. O2 estimates that its EDGE network is able to cover approximately 30% of the population in UK, which is mostly in the more urbanized areas. They expect that it will grow to 40% come Christmas season.

Holden further added, “Most of the handset vendors are anticipating the fact that 3G coverage will increase and virtually all their handsets now have 3G capabilities. This one doesn’t and it’s a significant limiting factor as we go down the line.”

He stated, “Unless and until they rapidly rollout a version of the iPhone that does have that capability I think they’re going to come up against a stumbling block which will reduce the opportunities for significant penetration.”

He believes that there will be an adequate number of people who will be purchasing the iPhone because Apple made it. He added that “it certainly does look attractive and it’s probably a top of the range 2.5G phone”. However, in Holden’s point of view, Apple made a mistake when they chose not to give the iPhone 3G capabilities.