This article touches
on why I believe the iPhone has been a bigger success than anyone really imagined - the fact that AT&T was forced to let the people who made and used the iPhone define its capabilities.
Sadly, AT&T's cell service in my neighborhood stinks, so no iPhone for me. I was pretty much forced to go with Verizon Wireless simply because of reception. I have bought a very modern phone and I pay extra for things like web browsing, email, etc... but there are only a handful of useful applications available for it, and most of them cost a hefty monthly subscription charge for things that I might use once in a blue moon.
Compared to the thousands of apps for the iPhone, the selection and usefulness of the Verizon apps are pathetic. My guess is that very few programmers are developing them because Verizon keeps a very tight grip on what gets offered to its customers. For the iPhone, Apple controls the content, not AT&T. And that, in my opinion, makes for a world of difference. (Could LG start promoting apps for my phone? Not without Verizon's blessing.)
This is why I hope that Apple ends AT&T's exclusive grip on the iPhone when the contract runs out in 2010. I suspect that it would force the other cell providers and phone manufacturers to step up or lose ground. And Apple would gain at least one more customer in North Adams, MA.