Apple needs to work with phone companies
If you want a simple phone, just go and get one. They're usually free. The complex phones are the ones that cost money.
Today's cell phones really suck when you think about it. The cameras are really poor quality, it's not real video, low storage, etc... As Ed Helms said in Digital Watch on the Daily Show...Finally companies are combining the battery life of digital cameras with the image quality of a cell phone.
However, things are going to improve very rapidly. It won't be long before "The Portable Device" is something that can take 4-6 megapixel images with decent quality and store tons of them in the tens/hundreds of GBs of storage.
Likewise they'll have headphone jacks so you'll use them like an iPod...again with enough storage to carry the entire library of an average person.
Combine this with all the usual PDA and game stuff in a unit that is as small as today's smallest cell phones.
These units will be dockable with your car, computer and home entertainment center.
Apple can not make this device, it could, but it can not compete in the market place. What it can, and should do, is provide licensable technology and services for these devices.
Most notably, they should start ASAP in getting these phone to be able to use a handheld version of iTunes and iTMS.
iPods days are numbered. Don't get me wrong, it's a friggin' awesome product...best on the market today...but hard drive capacities will increase to a ceiling where they hold just about anyone's entire library. Physical sizes will decrease, and prices will inevitably drop down to the point where Apple can not deal with the razor thin margins and competition.
The iPod was created to support Mac sales. iTMS was created to support iPod sales. At some point if the iTMS emerges as the winner (and it sure is looking good today), it will become not only a significant revenue stream, but a powerful force for Apple to influence and enter other markets.
