Yeah, Yeah, I know it is just a cell phone. But man. Think about it, right now there are 5000 "developers" (ie, computer programmers) in San Fransisco learning about the iPhone platform (and the Mac).
This article from Computerworld is a bit over the top, but it is a good read: IPhone 3G: It's not world peace, but it's close
It is better to find a need and then develop a product, but we wouldn't have microwave ovens with that mentality. More often than not, we try to match the technology to potential needs. That clearly is the case for the iPhone. 16 years ago the World Wide Web was born, now we need it on the bus?
Anyway, web applications are old news. Ironically, the programmers in San Fransisco are learning how to make programs for the iPhone that don't require Internet access. I guess the "dumb terminal" model, even when it comes to cell phones, is dying. To use the vast majority of the new applications that will be developed as a direct result of the World Wide Developers Conference, a simple iPod touch 8G (retailing for $278 at Future Shop) is all you will need. (The iPhone 8G retails for about $785 in Italy without a contract).