Keep this in mind, noone has an answer for the iPod Touch or the iPad yet. The iPod Touch outsells the PSP and nearly the DS in devices and in terms of content sales via iTunes (games and entertainment, none come close).
The iPad is another gaming console in a way and a pretty cheap laptop replacement. Not to mention the book market.
The iPad and iPod Touch make up over 65%+ devices sold by Apple and brings the total iOS devices to over 100 million.
Other companies keep thinking this is a Phone only market. When in fact the iPhone is only about 35-40% of Apple's devices that use the iOS and the iTunes/Appstore platform.
Where is the response to that? How many years will it take others to understand this. Apple is owning the mobile and handheld market and is making a ploy for all entertainment devices not just phones. Apple has to love that the competition looks past 65%+ of their market every new device.
The iPod Touch and iPad are the equivalent of Apple II's in schools and candy cigarettes when it comes time for kids to grow up and buy a phone. All their apps and games will be there waiting for them when they get one. This market is about so much more than phones...