If you think Steve Jobs & Co can't design an ugly product, think again.

Take the iBook, circa 1997. Coming in blue, orange and green, it was bulgy and shaped like a clam. It didn't inspire people to feel cool and sophisticated--it had the lumpy appeal of a chew toy.

With Apple on the cusp of introducing a fresh take on its already iconic iPhone, it's a reminder that the company is capable of screwing up.

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Less than a year after the iPhone first went on sale, the device has grabbed Apple a sizable chunk of the market for smart phones, helping send the company's stock soaring more than 56 per cent over the past 12 months to $184.37. By the end of last year, Apple's share of the smart phone market was 27 per cent.

But competitors are racing after it. Apple has been cutting back on the supply of iPhones in recent weeks, and its first-quarter share of the smart phone market slipped to 20 per cent.

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Mess up version 2.0--and that high-flying story could fall, fast.

You have to talk to a master designer to figure out why Apple's all-in-one gadget works so well, and how Apple could stumble as it releases fresh iPhone iterations.

That's because the iPhone's severe design isn't about aesthetics: it's a solution to the very modern problem of how to combine computing, communications and mobility in a single device, says Mark Rolston, chief creative officer at Frog Design, which has worked on projects from Logitech devices to online services for Blockbuster.

The reason that the iPhone succeeds so beautifully, Rolston says, is because the device itself is little more than a blank brick. The design of the physical device gets out of the way of the gadget's software--which lets it morph from being a Web browser to a media player to a phone and back again.

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"If I were to hand this to you and you and you'd never heard of the iPhone and I were to tell you 'This is an SAP portal,' you could buy it," Rolston says. "If I gave it to you and said 'This is a really expensive calculator from HP,' you might believe it. If I told you 'This was the latest from Nintendo,' you'd say 'Okay.' That's the heart of it."

That means that fixing the iPhone's flaws could be deadly. The phone lacks a keyboard, giving the BlackBerry from Research In Motion an edge as an e-mail device. The lack of a keypad makes it a second-rate telephone. And the bigger the collection of people who use it, the more designers might feel compelled to make it "easy" for everyone to use--and too often, that means adding a few instructions to help out confused customers.

Adding more such details, however, could be the biggest foul up of all. "That would be the biggest mistake they could make--not sticking to their vision and getting off the page of 'this is not a phone, this is a new generation of communications device,' " Rolston says.

The best improvements that Apple could offer on the iPhone, Rolston suggests, would be almost entirely invisible and numbingly geeky. Improved synchronization. Faster data services. That kind of improved underpinnings don't exactly make for slick stage demos. But they do create a great service. "This whole system is what's so interesting about it," Rolston says. "For Apple to improve that is a big part of that story."

It will also be a sign that Apple continues to get it right. With everyone from Google to Microsoft desperate to get ahead in the market for cool, handheld devices, even Apple can't afford to fumble its next generation iPhone.

Still, it can happen: Just remember the original iBook. If the new iPhone is blue, clam-shaped and curvy, watch out below.