"Apple is in the same situation as Nintendo when they launched the Wii." Why am I hearing this so much? From the interwebs, from TV, and just from talking with friends and family.
Nintendo launched the Wii as the budget option in gaming. It's twice as cheap as the PS3, and 65% of the price of a 360. Your Grandma Josephine will not mind putting down 250 bucks for a chance to bowl with her grandchildren in her living room. Your unemployed Uncle Joey can probably come up with the money from looking under the couch cushions for change. It was made to appeal to the masses, but it was also priced as such. I'm not implying that the iPhone isn't competitively priced. The razr was priced at 500 bucks at launch, and it's sold more than 50 million units since launch. I'm guessing that Motorola is setting the razr 2 (shelves in July) to be sold at a similar price, so the iPhone is competitively priced as a high-end phone, and not batshit crazy priced like the PS3; a budget option, however, it surely is not. Another thing the iPhone has not got going for it is it's exclusivity with Cingular. I sure don't have any beef with Cingular, but I'm guessing people (my ex-roommate) who live in places with terrible Cingular coverage (somewhere in the college town of Champaign), will not be thrilled at the idea of shelling out 500 bucks, and paying the extra activation fee so that he ca...experi...the...iPho... As far as reaching the masses, the mere fact that Apple isn't releasing it across all carriers means that the iPhone's not going to have the wildfire grassroots love that the Wii has gotten.
All that said the iPhone is still going to tear up the market. Steve Jobs is one hell of a salesman. He can shit in a rusty can and there will be people who will come lap it up, and call him the technological messiah. And also, honestly, to people who are constantly bitching about the battery life. Quit your whining; you realize that 16 hrs of audio playback and 5 hours of continuous browsing/talking is better than the current video iPod, right? I haven't really had any problems with the battery life of a video iPod, because I've never really had the need to continuously play my music for 10+ hours straight without charging. Even airports now have open sockets where you can charge up your laptops and iPods. If you're going to be the small percentage of the populace that have an absolute need to play music for over 16 straight hours without a way to recharge in between, I have news for you: The iPhone is probably not for you, and you should probably get an actual mp3 player. For the rest of the populace, you can live without playing music off your iPhone for 4-5 hours that it'd probably need to recharge, can't you? 5 hours of continuous talking/browsing might not seem like a lot, but the razr (yes, I'm going to bring up that thing again) has only 7 hours of continuous talk time, and the N95, Nokia's direct competitor to the iPhone, will only have a continuous talk time of 6.5 hours.
After all that, I should probably mention that I'm mostly likely not going to buy an iPhone, mainly because it's a 500 dollar high-end gadget. Plus because I shudder at what would happen to the exposed touch screen of said 500 dollar high-end gadget when it's in my pockets. I just don't like those belt holsters, because honestly those things make me look like stupidz.