Some notes from around the Web:
Cringely has a couple good theories:
about the g. 2.5 internet connection (basically works like dialup) instead of a gen. 3.0 high-speed link:
Cingular has their own service, with RealNetworks-based video streaming. If the "iPhone" had gen. 3.0, then they'd either need to get cingular to change their system over to Apple/iTMS stuff, or they'd need to give up on Apple/iTMS vertical integration. The former is probably not possible given cingular's contracts, and in any case not something Cingular wants to do. The latter is contrary to Apple's "lock down" philosophy. So they don't use Cingular's gee-whiz network (though the hardware might support it), but rather offer wifi and bluetooth connections so you can get your stuff directly from Apple.
Also, The Apple TV announced at the same time as the iPhone was initially announced last year as the iTV. They had trademark problems too, and the result is that it's now called "Apple TV". The result of this iPhone/Cisco flap is probably going to be the "Apple Phone".
other points out there:
Cingular is locking in a 2-year contract. Apple's "cutting-edge" design is notorious for cutting-edge problems: think cracked G3 cubes, scratched iPod nanos, and any number of laptop problems. An early adopter is usually a tech enthusiast with money to burn. Locking these guys into a two-year contract on a handset that likely will not last that long is asking for trouble.
Besides, the non-replaceable battery may work fine for an iPod, but a cellphone with computing facilities is gonna be going through a lot of juice, possibly generating a lot of heat, and 2 years is a long time on a Li-Ion battery. My laptop cooked off its battery in one year.
The touch screen means that you have to look at the screen to dial or send messages. That's not exactly how everybody uses a device.
The big issue, and the classic problem with cellphones, is that this thing tries to solve what the Celcos have viewed as "The Big Problem": how to get people to spend money on cellphones beyond the tight margins of phone calls. They ask themselves, "How do we market a phone that encourages people to use all these great features on which we make a huge profit?"
We ask ourselves: "Why the hell would I want to use video on a cellphone regularly? Why would I want to use a device with a slow interface (even if it were elegant) to access (slowly) data at a high price, when I can go to my computer and do it for free?"
