Next-generation iPhones likely to focus on internal improvements.
Apple iPhone Apps Coming, but Limited
The article quotes Steve Jobs about why Apple does not want to allow any 3rd party developer make applications for the iPhone:
We define everything that is on the phone. You dont want your phone to be like a PC. The last thing you want is to have loaded three apps on your phone and then you go to make a call and it doesnt work anymore. These are more like iPods than they are like computers.
While saying this, Jobs does reveal that there will likely be additional applications that can be bought later and installed, but that this will be in a "controlled environment". Apple adopts a similar approach with iPod game development -- only allowing specific products to be developed and released.