Many bloggers and other commentators have chimed (check Techmeme) in with their impressions of the vaporous iPhone (we'll continue to call it that until the lawsuit with Cisco is finished).
A few key points. The iPhone Steve Jobs demoed is a first generation device. It's definitely not in the realm of Apple Newton personal digital assistant (PDA), which ultimately flopped. And it's not difficult to imagine a rapid rollout of versions that resolve many of the iPhone deficiencies that have been identified in the last few days. For example, if you are on a plane and watch a video on your iPhone, you won't likely have a phone to use when you get off the plane.
Just as Apple has continued to evolve the iPod with more storage and other options, the company clearly has an extensive roadmap for future versions of the iPhone that add more storage than 8 gigabytes, leverage more elements of the Mac OS X, support 3G networks, add more carriers, delivers Wi-Fi synching with a PC, GPS, longer battery life, third-party applications, a better camera and more email options.
After two and a half years of development, the iPhone is still more of a prototype for what eventually will become the standard interface for PDAs, just as the original Palm somehow had the right timing, price, software and interface as the first generation successful PDA.
The iPhone is really not a smartphone. It is a personal digital device that includes phone capabilities. It's a fusion of Macintosh and iPod.
It's an elegant combination of hardware and software per Steve Jobs with a whole bunch of trade-offs, and it's not for everybody. It won't get people who rely on corporate email and phone calls to throw away their Blackberries and Treos yet.
Jobs hopes to sell 10 million iPhones in the first year, which would be a one-percent share of the cell phone market. He might be able to do it with the first generation, but if Apple can quickly make address deficiencies, especially around storage capacity, battery life, carrier choice, internationalization, 3G support, and an application ecosystem, all bets are off. All of the patents around the iPhone will be useful, but not if the device doesn't perform well as a phone and messaging system.