Consider something when thinking about the iPhone.
A) It IS a smartphone/PDA. And being in that class of device, it has a stronger processor and video system then any of it's counterparts. No, it may not have all the features ALL the other phones do, but it offers advantages that the others don't. Like firmware, and OS update capabilities.
B) It's MORE then just a smart phone, or a PDA. It's a mobile/handheld version of Mac OS X, running on a high-speed ARM processor. Making it not only the most powerful PDA/Smart phone on the market, but thrusting it into a newer category of hand held computers.
The iPhone/iPod Touch isn't just a neat new piece of technology that's going to go the way of the 78 LPs... RIM (Research In Motion, the makers of the Blackberry) have had 1.5 yrs to come up with a competent competitor, and they came out with the Storm. Still falling short of the mark that Apple set.
For a long time, Apple Computers has set the standard for the computing industry, and they did it again with the iPhone. It really is a piece of beauty to behold. I highly suggest you go to an Apple store, and try one for yourself, if you can.