I'm no fanboi, I've toasted this underwhelming update (at least with regard to the hardware) extensively, but this I need to respond to:
1) Cheapen the product with a glossy (as opposed to matte) plastic. This will be a scratch magnet and make us want to replace our phones in a quicker cycle.
There have been a myriad of reviews and posts panning the metallic back of the iPhone for its negative affect on reception, and the initial reviews of the iPhone 3G have stated the reception has improved. There are also dozens of cases and films available, not to mention people who work with plastics for a living who just might have developed a scratch resistant glossy plastic. You immediately assume it will scratch. If they can make such an effective scratch-resistant
glass touch screen I'd imagine they can do so with plastic.
You've never seen one, you've never held one, and the only
pictures I've seen so far look pretty nice to me (even if they are of the white

).
2) Lower the price, so they can sell tons of em, and they will make up the lost revenue with the new App store (through the revenue sharing)
You're really complaining about good business planning? You're really complaining about Apple making money so they can continue to innovate and develop new, groundbreaking products? You're complaining about the App Store which is heralded as one of the best reasons to get an iPhone because of how it encourages people to develop software for the iPhone, making it such a unique and in-demand device?
You're actually complaining that the iPhone costs less money?
3) Allow AT&T to price gouge us every month with increases and contract renewals for upgraders
"Price gouge." You should look that term up because I'm not sure you know what it means. What the definition is not:
charging customers the same amount that you charge all of your other customers for 3G service plans. In fact, considering the exponentially higher amount of use of the internet service AT&T will be providing specifically to iPhone users they could have arguably charged more, but they aren't. Not to mention, AT&T's 3G unlimited data plans (again, the same for all of their smart phones, including the iPhone) are the same or lower than all of the other US mobile phone companies.
Name one phone that has more storage, not counting phones that require you to match those 16GBs with 8 different 2GB swappable chips. For example, the Samsung Instinct - the closest thing to a true iPhone killer there has yet been - comes with 32MB of internal storage.
I would have gladly paid $599 for a 32GB, with >2.0 megapixel camera, with an all aluminum chasis.
You and a minority of customers. Of the people interviewed that did not buy an iPhone, 56% said they would have bought one if it weren't so expensive. It's not about you and your personal preferences in aesthetics, it's about business. They will sell more and, in turn, be able to continue to turn out better products down the road.
So essentially these plans are no different than an ARM loan in the mortgage industry. You lock in for the 1st year and then the rate raises.
That is really not an accurate analogy at all. A home is a necessity, an iPhone a toy/accessory. Not to mention, whether or not you choose to upgrade your iPhone/iPhone contract is much more a case by case basis personal choice than the sneaky tactics of an ARM loan that you are already locked into.
In the meantime, I feel like their music/movie and Mac divisions are suffering because of the iPhone R&D.
You might "feel" like that, but actually they continue to improve according to things like "numbers" and "profit margins" and "actual data."
Sad part is after one year the biggest development for the phone was due to AT&T, not Apple. No design change to make the copy cats look dated, no increased specs etc.
The biggest development was by far the iPhone Firmware 2.0 and App Store. The influx of programs on top of Enterprise is huge. The significantly lower price plus the addition of so many programs - both for business and pleasure - alone will sell millions of units.
And why would you change the design of a ground breaking device, particularly when one of the most unique and amazing aspects of it is it's single button, touch-screen interface?