Apple's iPhone launch stole the spotlight for mobile news headlines in June. Which is too bad, because a potentially more significant news items was, as a result, relegated to the back-pages of tech magazines and Web sites: In July, for the first time, the number of mobile phones in use worldwide will top 3 billion.

The Reuters story announcing that statistic quoted John Tysoe, founder of consultancy The Mobile World, saying that "It took over 20 years to connect the first billion subscribers, but only 40 months to connect the second billion... The three billion milestone will be passed in July 2007, just two years on."

Apple's projected sale of 10 million iPhones in 2007 is but a tiny fraction of that market. Can that small market share, in the end, change the nature of the mobile phone market itself, or at least a sizable segment of that market? And what will the iPhone mean for developers in the long run?

Earlier this year, I moderated a panel discussion on Java ME at JavaOne. Following the panel, several participants—mostly representing handset manufacturers and network operators—and I were sitting around a table, enjoying a few beers and hors d’œuvres, thanks to the generosity of Sun's JCP program office. Sensing the advantage of that relaxed milieu, I asked the inevitable question: Just what did they think about the upcoming iPhone? Did rival phone manufacturers and network operators think of it as a threat? And if so, what were they planning to do about it?

The answers, in hindsight rather obvious, were surprising at first. While admitting that the iPhone would likely hurt them in the short term, cutting to some extent into their sales, several of the phone manufacturers believed that the iPhone was the best thing that could happen to them, for at least two reasons.

The first reason someone in the discussion referred to as the "latte factor:" Through its aggressive marketing and ubiquitous presence, Starbucks made it acceptable for the average consumer to pay several dollars for a cup of fancy coffee. In time, the change in consumers' price tolerance benefitted the entire industry. Phone buyers currently expect to pay on average no more than $100 for a cell phone. Several million iPhone buyers shelling out many times that much for a phone will, over time, change consumers' tolerance for paying more for a cell phone. Other manufacturers will also be able to offer more features on more expensive devices, resulting in bigger margins. At least, that's what participants in the JavaOne conversation believed.

More consumers walking around with more capable phones in their pockets can lead to a network effect of sorts: If your friends all have phones that can do much more than your phone can, you will likely be looking for similar features in your next mobile phone, too. To stay competitive, phone manufacturers and network operators will have to offer those features. Fast-forward a few years, and we may see a very large number of highly capable handsets, with lots of memory, storage, and high-quality displays in the market.

The second reason the iPhone may benefit rival manufacturers, according participants in our little impromptu discussion, is that Apple was able to cut a deal with its network provider, ATT, that no other manufacturer currently has: Through this deal, Apple gets to decide what software it puts on the iPhone, and even the method through which software is distributed to the iPhone. That turns out to be a big compromise from ATT, and is a potentially big win for Apple, which can position part of its iTunes portal as a software distribution platform of sorts.

But the biggest change the iPhone may bring about, especially for mobile application development, is that Apple decided to include the full-fledged Safari browser in the device, effectively choosing Ajax as a development environment for the iPhone. As a result, several Ajax application vendors, such as 37 Signals, were able to already implement iPhone-friendly UIs for their online applications.

For example, by adding Safari 3 to its set of supported browsers, Ajax tool vendor Backbase was able to quickly offer support for the iPhone in its Ajax SDK. In an interview with Artima, Backbase VP of Marketing Michel Gerin noted that:

The announcements just a few weeks ago from Apple [was] that the only way you can develop applications for the iPhone is through Ajax. The iPhone is going to only support Ajax. Of course, it also supports HTML-if you go to a Web site, it's going to work with that. But as far as the client interface is concerned, it's not going to be Flash, it's not going to be Microsoft's SilverLight, none of those proprietary solutions, but it's going to be Ajax... Since we now support Safari 3, this is [how] we can support the iPhone..., too.

If other phone vendors follow suit and include in their devices a full-fledged Web browser, Ajax could emerge as the development platform of choice for mobile devices. That could potentially do away with many years' worth of attempts to establish mobile device-specific development platforms, such as BREW or WAP. Since such tools have thus far fragmented the mobile development landscape, standardizing on Ajax could be a potential boon to developers and users alike. Bringing about that change may be the iPhone's most lasting impact.

How do you think the iPhone will impact developers?