I think a lot of people are missing the point, here. Sure, we have 90% of the functionality of iPhone right now with our Treos. But we also had 90% of iPod's functionality with the MP3 Jukeboxes that were around at that time.
It's not about functionality; it's about the complete customer experience. (Something that Palm used to understand well but no longer seems to get.) iPhone makes every mobile product at CES look ridiculous. From a user-interface/design perspective, it's at least two years ahead of anyone else's mobile products. Every major cell phone/consumer electronics company on earth is heading back to the drawing board as of this morning.
This is the product that will eventually make average people actually want to buy communicators. This is the product that will finally bring the cost of wireless data down to something reasonable. This is the product that will force every other manufacturer to stop making geek toys and start making truly remarkable innovations again.
Palm had better be ready soon with Hawkins' "secret" device. They're going to need it by June, if they want to stay relevant in mobile computing.
Man, I've never been so happy to be wrong about Apple. I was so sure they weren't going to head in this direction with iPhone.
This is but a small step into a much larger electronics world for Apple. They essentially just wrote the gold standard for communicators. Everyone from this point on is going to have to match or beat that standard. It's great for Apple; it's great for the other companies, who now have more healthy competition and motivation; and most importantly, it's great for us, because we're going to have a lot more great products at our fingertips a year from now.