Face it guys, it is all about the money.
If money were no object, everyone would want one. Imagine the length of the lines if the price were not this high.
Apple is the most savvy of pricing strategists. Apple products sell on the street at list, or even slightly above. Yes, they will add features and capacity and lower the prices over time. They will do it at just the right rate to keep sales and margins high.
Yes, there will be a 3G version when AT&T finally builds out their 3G network. Heat-seekers will buy a 2G version and then buy a 3G version when it is available. And yes, they will buy out their old 2 year agreement and sign a new one. (For the GSM user, there is no place to go anyway.) For the real heat-seeker, money is no object.
Since I cannot use my old number or my old SIM, and since I do not plan to give up my 650, I expect that the life total cost of ownership of the iPhone is about $3000-. However, I just reminded myself that I have made thousands of dollars in Apple stock in this year alone. I can pay and pay and pay.
The iPhone is free!