In the UK, I would say that nobody pays over £50 UK for a new contract phone these days. People expect them to be FREE if they are signing a contract which is £35 or more each month.
My Nokia E65 on launch day was free with my contract. Im sure there are people with bucket loads of spare cash who can justify the iphone, but it seems massively over priced for what is still essentially... a mobile phone.
I'll say it again. People don't buy the iPhone because it is a better Blackberry, or better Nokia. People buy the iPhone because it does something no other phone does.
If that something is unique enough, fun enough, and useful enough, people will buy a lot of em. If not, then the iPhone will not be successful. Almost everyone is arguing whether EDGE is too slow, or if 3G is way faster, or just a little faster, or available, or not... try web browsing on the iPhone. I use a Treo 700p on Verizon, it has the fast CDMA system. It also has a really really crappy web browser. Most of the time it defaults to a horrible little cell phone version of the web site that doesn't show anything. Believe me, I would rather look at the iPhone web browser, even if it is slower in loading.
Again, my point is you should be assessing the iPhone for what it is, on its own terms. No other phone is like it enough for there to be a fair comparison.
Now, here is another point, or rather question. I'm in the US, so those of you in Europe and Great Britain, how compelling is iTunes? In the US, there is another quality of the iPod and the iPhone that makes them unique and desirable. Two qualities, actually:
1. they sync immediately and without effort with your computer. I guarantee you other mp3 players don't do that. I have to manually move songs over to my Treo, and it's always a crap shoot if the contacts and calendar information syncs correctly with the Treo.
2. iTunes works extremely well with the iPod and Iphone, again effortlessly. My Treo doesn't sort songs into albums for example, I have to do it manually.
So the question is, how important is iTunes in Europe and Great Britain? Would this add value to the iPhone? If not, then the iPhone, I think, would not be as compelling as it is in the US -again, regardless of how fast the darn thing is. If iTunes is important/useful/fun/used all the time, then the iPhone will have another reason to be considered a unique device, and a considerably valuable one as well. Worth the price? Consumers will decide that question.