Let’s pretend for a minute that Apple successfully defends the iPhone name from Cisco’s claim of ownership. Instead, focus on the features and benefits of the phone. 
With a 2 year contract, the iPhone basic runs $499, which gets you a 4 gig iPod+phone combo. For $599, you get an 8 gig iPod+phone combo. Of course, that’s not all the features of the phone:
Sweet, glorious specs of the 11.6 millimeter device (that’s frickin’ thin, by the way) include a 3.5-inch 480 x 320 touchscreen display with multi-touch support and a proximity sensor to turn off the screen when it’s close to your face, 2 megapixel cam, 4GB or 8 GB of storage, Bluetooth 2.0 with EDR and A2DP, WiFi that automatically engages when in range, and quad-band GSM radio with EDGE. Perhaps most amazingly, though, it somehow runs OS X with support for Widgets, Google Maps, and Safari, and iTunes (of course) with CoverFlow out of the gate. A partnership with Yahoo will allow all iPhone customers to hook up with free push IMAP email. Apple quotes 5 hours of battery life for talk or video, with a full 16 hours in music mode — no word on standby time yet.
What I’m wondering on this, though, is why get a phone with all those features if it is going to cost that much? I’ll admit that I’m probably not the target demographic for this whiz-bang gadget. I like to get single task gadgets for the most part – I want a phone that is just a phone, a camera that is just a camera, and an MP3 player that is just an MP3 player. For a geeky, dorky, gadget-whore like me, that probably sounds bizarre, but I want functionality at reasonable prices. What happens if next year you want to carry around more music? What if you decide you really want a 6 megapixel camera? Sure, you can choose to carry around those in addition to the iPhone, but why would you given what you’ve spent on the multi-function phone?