I suspect they're savvy enough to understand that just 'cause Steve doesn't want it to be a gaming machine doesn't mean that he can't make a ton of money by having games on it.
One of the advantages that startups have over big companies, is that they know that they're searching for what the market wants. Once you're successful, you can lose sight of that. ON the other hand, PG says again and again, that you may well end up with something different than your original idea.
"All in one device?" Heck yes, that's going to include games! My iPhone has as high a fun quotient as my Nintendo DS, and it's smaller and much more convenient for me to put media on.
Right, the powerful graphics technology and the multi-touch ability makes it ideal for interesting games. It only makes sense to play up the gaming aspects.
But I can understand how Apple might be interested in getting more powerful "real" applications on the iPhone. I heard the Android ad on the radio for the first time yesterday and was slightly fascinated by the way Google is advertising the Android as a "powerful" robot tool that gets things done.
In contrast the iPhone feels more like a fun tool for geeks, perhaps not so much a business oriented device as an entertainment device.
Well, Mac in general aren't marketed as being business-oriented (unless you're a design firm maybe). Why would Apple change things drastically for the iPhone?
Even the business types at Apple know they don't want to compete with the PSP on the PSP's terms. Esp. since you can add a camera, GPS, Skype headset, etc to the PSP now.
The newest one is all downloaded, the main problem is that the downloaded games cost the same as brand-new store bought ones - meaning you can't get cheapo 2nd hand games, and downloading games doesn't save you any money despite not having to carry around the cartridge.