The camera is not the best on the market, but Steve Jobs has been quoted as saying that its not designed for that purpose and the user is better off getting a “real camera”.
The current evolution of iPhone does not have a removable battery, which can become a security issue. There is no voice dial feature and a lack of video. But with the iPhone shacking the industry and teaching consumers a new way of seeing and doing the cell phone, it is definitely having an effect.
Apple may have been looking for a niche market share with the introduction of the iPhone, but they found consumers that were eager for something different and willing to pay the price.