“no third-party applications (Apple has closed the system, and will only offer applications designed by Apple or its partners)”

That just for me kills any and all appeal for the iPhone. The point of having something that is a computer (PDA included) is to boost productivity. People purchase hardware because they want to use software. Software is a solution. People purchase solutions for the sake of increasing productivity. If it does not support 3rd party applications, then that limits the whole point and makes it (the iPhone) useless hardware. There’s plenty of hardware out there, but what makes people go to it is what programs one can run. Just like a console game machine – the question would be: What games are on there? Many a gadget/hardware has died because of lack of software (the solution). So, from this point of view, the iPhone can have MacOS X for all I care, it’s useless. That’s why I like my Dell Axim – it runs everything I need to run. And if there is something more that I need, I can write the solution myself or buy it. Oh, and what’s the point of having such a large storage space if you don’t install apps? What just to store music? If that’s the case, I’d rather get a decent PDA Phone or a combo of a phone and a decent digital audio player.

While I don’t necessarily agree with the tone … I agree with the short sightedness this shows. BUT with that said you and I see this as a big oversight by Apple, I have to believe they know what they are doing and if they aren’t allowing 3rd party developement there’s a reason. Also – look at the source. They first confirmation they got of this was from a “booth person”. The second was the VP of applications … I’ll trust the VP to give the information as it is available now, but three things you need to remember:

1. Microsoft crippled everything they put into the WM5 OS. If Apple includes full versions of everything… there’s no need for a new browser, there’s no need for a new calendar program, there’s no need for a new mail program … half of the extra crap (I) would load on my PDA won’t need to be, simply because the full versions are installed. I wouldn’t need WebIS FlexMail if Microsoft had included the full version of Outlook 2003 on the PDA. Same with Opera and PIE. You are used to buying tons of software because Microsoft crippled the hell out of WM5/2003/2003se/etc.

2. This is all speculation at this point. There is no OFFICIAL word from Apple on any of this. Yea Yea, Engadget has spoken with some higher ups. We all know Endgadget is 100% reliable and can be trusted with giving you a perfect assesment months in advance of what a device will be like. (hint of sarcasm)

3. Just because Apple says it won’t be an open platform … doesn’t mean that the Apple hackers won’t be able to code for it. Unix core my friend. Closed in the sense of Apple isn’t the same as closed in the sense of other home grown OSs.

That’s true. Never thought of it from that angle (Microsoft has conditioned us to buy tons of software). And yes, UNIX core. Homebrew stuff is good.