Once the storage comes up a bit on the new iPhone, why would anyone pay basically the same for an iPod when they can have all that’s in the iPhone and still retain iPod functionality? Apple was very smart to do this. Everyone is hooked on iPods, and folks will now see this as the next step towards being rid of separate PDAs, phones, mp3 players, etc.
I think you’re going to see other phone service providers (i.e., Alltel, Sprint, etc.) start tap dancing soon for a piece of this, or I think their business will be hurt if they don’t.
The first lawsuit has already been filed!
We'll see what happens with the new AppleTV product; I've been saying this would happen for years (i.e., the amalgamation of all "tele-" products in one unit). Soon, the TV, receiver, computer, phone, video, etc. will all be part of one unit, or at least networked and interoperable in the home. Visits to the video store (or even renting through Netflix) will be a thing of the past; video purchases and rentals will all be done "on-line" much the same way music is now bought. This is really already happening on a small scale.