I won't lie one bit. I am envious of iPhone owners. The iPhone, in my eyes, is by far the best and most advanced handset on the market, with tons of apps, lots of games, awesome internet and youtube, and incredible iPod functionality. Having an iPod touch, I am fairly well acquainted with most of the non-phone aspects of the iPhone. But, as always, times are changing. The announcement of the Palm Pre at CES 2009 is only the beginning of serious competition directed at the iPhone this year, and I believe 2009 and 2010 will be epic years in the smartphone wars, with either great revolutionary or evolutionary strides being made and any handset not meeting those challenges failing. That is why I am worried about the iPhone. I spent the evening exploring phones that I normally wouldn't look at or take interest in, namely the Nokia N97 and Sony Ericsson Xperia X1. I must say that I was surprisingly impressed, as I came in skeptical expecting to find something similar to the HTC Touch Pro, something nice but not comparable to the iPhone. Boy was I wrong. And the fact is that each of these handsets will probably end up in the US market in some form or another before the year is out. So my question is this: How will the added threat of serious competition effect the future of the iPhone and Apple's decisions regarding it. Will Apple introduce a third generation iPhone to make it better prepared for future competitors, taking the phone another five years into the future? I sure hope so. So what will Apple do? The additions of copy/paste, mms, and video recording are certainly not enough to justify 3.0 hardware/software. So sound off in the replies.... what is Apple planning to do to counterattack.