Realizing this is the iPhone forum and the Apple die hards are understandably wound up, still, I have to say my first reaction is "Wait and see." This is not the first time some faction has claimed the next hot thing is the big Treo killer. For me personally, the lack of a physical keyboard is pretty much a deal breaker, and seems to be for many others.
Beyond that, the price point Apple has set seems somewhat high for their target market. In particular, since they will likely have to rely almost exclusively on consumer purchases, this device likely has very, very little business marketability. Moreover, we'll just have to see how the lack of a removable battery works out for such a media centric device. It's one thing if your mp3 player can't make it through the day; it's another if your phone doesn't.
What I'll really be interested to see is what array of applications are ready for it when it finally gets here. It's kind of a chicken and egg thing, but if it doesn't have a critical mass of apps available, a lot of people will have problems dropping several hundred dollars to replace their Treo. Therein lies the rub, this seems like a consumer device targeted at the ipod crowd, admittedly a good sized crowd, but are the people in that group the kind to drop $500 - $600 on a converged device? Frankly, they don't seem like the group frustrated with carrying an mp3 player, a pda and a cellphone. We'll see, Jobs is smart and has created a lot of buzz, but buzz doesn't always equal sales.
Palm is supposed to have a few new devices hitting the market in '07, and will probably have at least one before the iphone actually gets here. Again, we'll just have to see.
JMHO
Gargoyle