The biggest issue with the iPhone is not the hefty price tag but the battery life, the touch screen and absence of a keyboard.
While Apple says that iPhone battery will survive your 5 hours of web surfing / talking / music / video play, there’s no option to swap the drained battery with another fully charged battery since the batteries are sealed inside the iPhone body just like the iPod.
Another problem is the much hyped iPhone touch screen as Dan Frommer puts it:
Many BlackBerry users, once familiar with the keyboard, can type without looking. Can you thumb out a text message on an iPhone screen without undivided attention? Will it work in the rain? Or if you’re wearing a bandage? Will it scratch, as the iPod screens have been infamous for? Link