Next-generation iPhones likely to focus on internal improvements.
iPhone 1.1.1 Aftermath
Apple's latest software update, however, has made it significantly more difficult for developers to install 3rd party applications, install custom ringtones, and, of course, unlock the iPhone from AT&T. While it had been expected that Apple would specifically fight SIM unlocking software on the iPhone, there had been some early hope that they would choose to simply ignore unofficial 3rd party application development efforts.
Long standing Apple users may recall that this sort of lock-down attitude is not necessarily new to Apple, and certainly not to Steve Jobs, who has historically been against user expansion of Apple hardware. Even as early as 1984, Steve Jobs's opinion on user expandability was clear:
Apple's other co-founder, Steve Jobs, didn't agree with Jef about many things, but they both felt the same way about hardware expandability: it was a bug instead of a feature. Steve was reportedly against having slots in the Apple II back in the days of yore, and felt even stronger about slots for the Mac. He decreed that the Macintosh would remain perpetually bereft of slots, enclosed in a tightly sealed case, with only the limited expandability of the two serial ports.
Meanwhile, Nokia is taking advantage of this moment to start running "Open to anything" ads which promise phones "Open to applications. Open to widgets. Open to anything" (at nseries.com/open).
Early efforts to hack iPhone 1.1.1, or at least provide a downgrade option to 1.0.2 are underway, but Apple's position on this is clear.
Ongoing iPhone coverage at MacRumors.com/iPhone.