I'm pretty sure he's talking about hardware, you're talking about a software issue.

I am pretty sure I am talking about the device as a whole. I don't care for the exact reason that prevents me from running arbitrary software on it, be it hardware, software or even legalware ("you agree not to execute any unapproved software...").

It might even have a supercomputer hidden inside - as long as someone else decides what I run on it, it isn't a fully capable computer.

I think the issue is what you called the legalware. And I agree with you: the legalware on the iPhone prevents it form beeing a full-fledged personal computer. OTOH the OP has a point: the legalware on the iPhone is far less restrictive than the legalware on other cell-phones (and other closed hardware like playstations). Is it enough to talk of a quantum leap? Maybe yes.

Without software, the hardware is just a bunch of ICs. I don't see the point here.

Does the iphone have a USB port? Can I plug in my 19" monitor, keyboard, or mouse?

The iphone does have a connection point, and if I remember correctly, they are opening it up to third parties. So, if the phone can take blood pressure and insulin readings, I'm guessing it will only be a matter of time before it also accepts USB enabled devices. On a side note, I did see a pocket LED? projector (~$400) connected to this port on the iphone. It worked nicely.

It has a keyboard, pointing device, and display. Seems like a computer to me.

I read once that "3GS is everything 1st generation iPhone should be". True enough. Now, as market position of iPhone becoming more and more stable Apple will inevitable drift in the direction of offering more open platform.

I predict one of: (a) removal/simplification of application review process, or (b) official SDK available in more languages with time (first being Java or Python) in couple of years.

> Can I run whatever software I choose on it?

Yes—you just lose the [legal] ability to connect it to the networks of any of the major phone providers. They're all too scared of what a "fully capable, no-compromises" computer could do to their network if it so chose.

Well many of us around the world have been running '"fully capable, no-compromises" computers' on mobile networks for years and so far Armageddon hasn't happened.

"Armageddon," in this case, is more about price gouging and control than anything. They're not worried what people will do to their shitty network, they're worried about the bottom line.

What if everybody ran an app that allowed you to SMS people for not 10¢ a message?