It runs MacOS
When the iPhone was announced, I remember Steve proudly declared "iPhone runs OS X". (Full disclosure, as a member of the press, I was actually in Vegas covering CES, but many of us had our eye on both events!)
Here's the full quote from Steve Jobs' transcript from MacWorld 2007:
"iPhone runs OS X! Why would we want to run such a sophisticated OS on a mobile device? It's got everything we need. Multitasking, networking, power management, graphics, security, video, graphics, audio core animation... It let us create desktop class applications and networking, not the crippled stuff you find on most phones, these are real desktop applications."
My Mac Mini, which cost me less than my iPhone (early adopter tax) runs OS X, which includes iChat.
Sure, I didn't expect 100% of OS X to make it into a 4GB iPhone, and have room for music, but it's shameful for a 2007-era smartphone to not have Instant Messaging!? Let alone the most anticipated smartphone? Yet 3rd party developers got IM working in a month with no documentation? This absence was the reason I bothered installing installer.app in the first place and may be the reason I stop at firmware 1.0.2, cutting Apple out of my potential WiFi iTunes revenue.
My Nokia e62, which I "upgraded" from, had Instant Messaging built-in, plus voice recording, not to mention MP3 ringtones, and Caller ID text-to-speech Name Announcing.
Yes, I knew the iPhone didn't have all of these capabilities at launch, but as Steve declared, it ran "MacOS". It should be easy for Apple or someone to add these features. And sure enough, a month later, those apps exist. Just not from Apple.
But their policy/programming disables/disallows Caller ID ringtones (text-to-speech MP3 recordings) and always-on Instant Messaging.
I understand Apple's motivations, and I could live with a locked down iPhone. But for work, I NEED real instant messaging, not delayed messaging. And I'd like to use non-music ringtones like "Your wife is calling", etc.
Maybe Steve should add some celebrity generic ringtone announcements to iTunes? Like Donald Trump, "Your boss is calling...answer it or YOU'RE FIRED!'
Oh, I'd also like Bluetooth syncing, which my Nokia had. I'd walk into my office and it'd start syncing my calendar, etc. You take things like that for granted and really miss them when they're gone.