I was addressing the notion that the iPhone would be "a coast" like the iPod.
Nobody thinks that will happen, not even Apple.
I've looked at Apple's presentation of features, http://www.apple.com/iphone/phone/ , and it seems to me that, once again, the major difference is in the intuitive interface. There's a market for this feature alone. For example in the ease it promises in checking messages, making calls, call conferencing, etc. It looks like a major improvement in UI. Just a better device in normal use.
However, I'm not a cell phone junkie, I have a 150 dollar two year old phone and a pay as you go plan. I'm mostly proud of only paying about 9 bucks a month now for my limited mobile needs. I just want a phone that works. So I'm not their market.
However, I do know that there's a sizable number of mostly younger folks to whom a cell phone is a major accessory and status symbol. They get new ones pretty much every year, like a fashion. If the iPhone has this cache, if Apple continues its knack here, I think it will be quite profitable for them.
It also leverages well with iTunes and with their new tv offerings. The question mark I have about the whole enterprise is the Cingular piece of the deal.