Well, yeah, making a phone has it's pros for Apple.
1) Entering an arena where everybody else isn't doing all that great on the ease of use, gui streamlining, music delivery, synchronization, etc. Apple, at least, can make a good phone, at least technologically. (Of course there are complications, like the service aspect, and this sort of alleged problem rumored recently.)
2) The iPod effect. Apple experimented with the "cool" factor. Apply that to phones, not forgetting the ease-of-use factor. I wish someone would do that in Japan (we have phones that have all kinds of features but are essentially crappy in ease-of-use, and others that are so simple they couldn't be hard to use if you were a hundred years old). In other words, Apple can both make a decent phone and get attention for it, IF they have the service side in line and without annoyances.
3) To some degree, switchers. Then again, my guess is that Apple phone users would be likely Mac users and/or iPod users, so there's much duality there. Unless they can make it get 75% market share like the iPod. Which, umm, despite all those improvements Apple could make, is still a difficult feat. Not like those other companies will sit on their hands - they'll start copying as soon as it looks somewhat successful, while people are still like "Apple? Apple has a cell phone service? My provider's fine, I might want a new model though."
4) Staying in business. This seems important. Yup.
5) If MS can be lured into this business, it might give Apple a chance to embarass them again. This is probably not on Apple's mind though. Nobody whittles at a giant by embarassing him.
In the end, my opinion is that if Apple can afford to design and engineer a phone, they should be focusing more creativity in what they can do with the Mac OS to beat the crap out of Windows and capture more market share. Starting with businesses. How to get the businesses....