It was an interesting experience watching a MacWorld keynote address with a feeling of dread, rather than one of anticipation. Fortunately, Apple didn't announce anything that makes the product I'm currently working on irrelevant, but it was interesting feeling that cold prickle of fear.
The iPhone is very expensive by my standards, but that's always true for Apple hardware. When I worked there, I never really felt like I belonged, in some sense. I never would have bought an iPod when they came out, but the market certainly ate them up. I'll most likely take a pass on the iPhone as well, not least because it's not a clamshell phone. I'm not really a fan of phones that are designed such that I can't sit down with them in my pocket.
The more surprising thing (and frankly worrying, as a competitor) is Jobs' claim that the iPhone is running Mac OS X. Now, we all know that that's not *quite* true - presumably it's been stripped down a bit for the environment. But the key thing is that it's actually got a rational software architecture. One of the things that was a constant drain on the iPod team when I was there was that there wasn't any OS as such on the iPods, and they weren't really built on any kind of common platform.
This made adding new features to the product line, or even fixing minor bugs, a major hassle - between making the changes in 3 or 4 gradually diverging code bases, and retesting absolutely everything anytime we changed anything (no memory protection or preemptive multitasking on those old iPods), we had a hell of a time just getting anything done.
When Apple needs to add a new feature to the iPhone, they'll just have any one of Apple's developers crank out a widget in DashCode, and they can then just make it available for download. If you're any kind of Consumer Electronics company, you really ought to see this as a shot across the bow. Maybe you're not in the mobile phone business, and you don't see how a $500 cell phone is relevant to you.
First, don't expect that the price is going to stay that high for long. Second, think about what's the actual difference between an iPhone and a new wide-screen iPod, or an Apple portable game machine, or whatever? That's right - a couple of minor board changes, and some new application software, and it's whatever Apple wants it to be. They've got an actual PLATFORM for high-end (currently) Consumer Electronics, and the game as we've known it is changing.