I think iPhone is going to perform poorly. You can get Razrs or Blackberrys cheap or free with some contracts, and get the "big enough" iPod for $250. People will choose the cheaper dedicated devices as always.
It could have succeeded if it arrived kinda quietly, and then had some time to drop the price and improve performance and features. Now the press and public expect the product to cure cancer, and when it doesn't, it will become a punchline on Leno. Apple needed to do the standard announce-just-before-launch, instead of trying to show off by overshadowing CES and then hyping for months.
Price drops, increased storage capacity and a faster network could eventually make it a huge product. But if that's the case, why the launch hype? Now they're in danger of having highly publicized short-term inadequecies killing the momentum.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.
