Cingular, I am totally guessing and speaking on my own behalf, is subsidizing this for around 200 dollars. Which means that this device's real market price is around 800 to 900 dollars. For that price he is in the same ballpark as the Microsoft-powered big smartphones like the high-end GPS enabled HTCs and iPaqs. He has blown them out of the water with their interface, though. It looks amazing and will be a joy to use just for the eyecandy.
However, he is taking two big risks in that UI. One is text entry. Soft keyboards are not as well liked as thumbboards. No, I cannot point to a reference for that. Just trust me on it: people would rather use their two thumbs to enter text that having to use their pointing finger while holding the device in the other hand. Mac OS X does have handwriting recognition built in, it is called Inkwell, so maybe that will be a text-entry modality that will make this more pleasant for a minority of users.
The second big risk is the touch screen itself. You can't dial this thing blind. You can't feel your way around the keys. Touch feedback is always a concern for users when they use keypads. Yes, the controls can be totally flexible when you have no defined hardware buttons, but without the spring of the key back to your finger, users feel lost, insecure, unhappy. This has been reported since the Timex Sinclair ZX81 became a global hit in home hobby computers in the early eighties. I truly hope Apple got the engineering right on this touch screen to make it a joy to use. I do not see it. It still am not entirely happy using
I can tell you all one thing, though: the mobile Researchers, Product Managers, designers, and all other staff involved in the high-end Nokia N and E series lines are right now in need of a stiff stif stiff drink. Maybe two. Same for the Walkman people at Sony-Ericsson. Because whether the Apple Phone is a success despite its size and interface or not -- both issues did hamper the also insanely marketed Sony PSP after all -- the whole set of expectations people will have for a high-end mobile media phone device just changed. Offering the N93 feature set for 800 Euros simply will not do anymore. Over. Go make something hugely better. In fact, stop dicking around and just rush this into production now.