Even for Apple, which has thrived on taking risks, the iPhone represents an audacious bet – possibly its biggest ever.

When the new smart phone hits stores Friday, the company will have a lot more on the line than the success or failure of one product.

With a hit, Apple will revolutionize the mobile phone industry and cement its reputation for creating gadgets whose chic designs and ease of use are so compelling that consumers will pay more for them. Oh, and by the way, it will create a third, profitable and fast-growing business to add to the Mac and the iPod.

A miss, however, could be catastrophic. Apple’s ambition to become one of the few companies in the world to bridge the technology and entertainment worlds would be dealt a huge setback. The 30 percent gain Apple’s shares have posted in the last three months on iPhone hype likely would evaporate.

And its aura of invincibility would be punctured.

“As much as any bet they’ve ever made, this is a ‘bet the company’ risk,” said Cody Willard, a New York-based hedge fund manager who has owned Apple’s stock for about five years. “If the iPhone is the next Newton (a handheld device the company released in the early 1990s that famously failed) it would have far-reaching ramifications for the company’s other product lines : and in its dealings with Hollywood.”

Even a bona fide success for the iPhone could be seen as a failure, given the extraordinary expectations for what is, after all, Apple’s first foray into the brutally competitive cell-phone industry.

In keeping with Apple’s traditional secrecy, company representatives would not talk about the iPhone, which acts as cell phone, music player and Web browser.

CEO Steve Jobs, of course, is no stranger to hoopla – or to taking risks. From the original Macintosh to the company’s recent switch to Intel chips, Apple repeatedly has gambled its future on high-risk, high-reward bets.

But for a product that few have seen in person, the buzz surrounding the iPhone is extraordinary. Already, more than a million people have expressed interest in buying one.

Buyers aren’t the only ones excited. Wall Street analysts expect big things from Apple’s stock, based on soaring expectations of how many iPhones Apple will sell in coming years. Piper Jaffray’s Gene Munster predicts 45 million total worldwide by the end of 2009.

In some ways Apple is a victim of its own success. A string of hits during the last six years has bolstered Apple’s reputation for hipness, clever design and easy-to-use technology.

Not coincidentally, the products also transformed the company from an afterthought in the technology industry to the leading firm at the intersection of technology and entertainment, with a market value of more than $100 billion.

Apple’s decisions about the iPhone’s design also have increased its risks. For instance, the iPhone will work only on AT&T’s network at first, potentially limiting its appeal. Its high price – $500 or $600, depending on features – comes at a time when consumers can buy smart phones for hundreds of dollars less, or get a multifunction phone for free with a contract.

Its lack of a keyboard could turn off potential business customers who are used to typing on their BlackBerries. And even though Apple is touting the iPhone’s Internet capabilities, it won’t be able to access the Web via AT&T’s highest-speed data network.