The iPhone has done very well, outselling expectations and overall giving every user a good experience. I have to say it's the most exciting and useful gadget I've bought in many years, to the point where I don't know what I'd do without it, given that it offers stuff like knowlege of traffic ahead of me, every contact from my computer, can pinpoint my location almost anywhere on earth, and is easily upgradable and endlessly extensible through third party apps. Like Matt Jones said, it makes me feel like I have superhero powers (at least for information).
I've noticed in airports and magazines and fast-forwarded commercials that every phone carrier seems to be making an iPhone competitor now. You can always tell because they look like an iPhone, therefore they should be just as good as one, right? Have you seen these things? (ex: LG, Blackberry, Samsung)
It's my hypothesis that the powers that be in the mobile phone world are essentially a cargo cult. Somewhere in a boardroom 1-2 years ago a CEO screamed "make it black and touchscreen, then put a chrome bezel around it and the masses won't know the difference."