I had the pleasure of seeing Steve Jobs' Keynote at Macworld, and in one word it was inspiring. Engadget has great screenshots and basics of the product, so I will get straight into what's surprising about it.
1. It runs Mac OS X. The full operating system. No more dumbed down applications. True desktop quality applications are possible. No more watered down apps.
2. Only one button on the front. Instead you have a very highly accurate touchscreen. Very well designed. Use your finger to scroll, pinch and let go to zoom into images and web pages.
3. Apple is not an MVNO. They do what they do best, and that's making great products. Cingular is their partner and the service
4. GSM+EDGE+ WiFi No CDMA, sorry Qualcomm. Automatically senses where you have WiFi and where you have EDGE and switches seamlessly
5. Full iPod capability. 13.5inch screen. Again a phenomenal user interface.
6. Five hour battery life (talk time and internet access). This ends the power issue for cellphones.
7. Full browser. None of this WAP stuff anymore. If this is successful, all businesses that depend on WAP to succeed are in peril. How do you see full web pages in a small screen. Well that's Apple's magic. Use your fingers to blow up the part of the web site you want to see.
8. The only negative...$499 price tag. Add a $199 iPod to a $299 Smartphone and you get the iPhone. On the expensive end of the spectrum, but it's worth it.
They've redefined the phone. I continue the standing ovation we gave Apple, its employees, and their families here on this blog.