Apple and AT&T deliver plenty of great features in the iPhone, but the list of shortcomings is too extensive to ignore. The following is a list of pros and cons for the iPhone I observed in my extensive testing of the device (see also InfoWorld's iPhone Test Center Review).

Pros
+ Works with standard iPod charger, USB cord
+ Visual Voicemail speeds through large voice mailbox, eases initial setup of greeting and PIN
+ Extremely high-quality text
+ Zoom, pan, and scroll gestures ease UI operation
+ Incoming call smoothly fades out audio, fades back in after call ends
+ Text editor has BlackBerry-like shortcuts for contraction, plus near-miss dictionary
+ Buzzer motor powerful, silent
+ Word, Excel, PDF document viewing built in (no editing); useful for file storage
+ Clever zoomed-in handling of HTML option lists

Cons
- Touchscreen imprecise; can't adjust for parallax (finger/screen offset)
- Web apps cannot download, upload, or store data
- Web pages cannot be saved for offline viewing
- Cannot browse iPhone's folders by any means
- No Flash, Java, or native application support
- Mail viewer HTML image display, JavaScript can't be disabled
- Yahoo "push" e-mail did not deliver immediately in tests
- Proximity sensor did not answer calls in tests
- Extremely strong radio frequency interference
- Enclosed speaker is too weak for speakerphone and voice mail playback
- Operation of interactive Web sites awkward
- Two-year commitment required for activation
- No voice dialing; full hands-free operation impossible
- No VoIP support for Wi-Fi
- No A2DP (Bluetooth stereo) support
- Battery not user-replaceable
- Memory not swappable or expandable
- Quality of camera is comparatively poor; focus distance limited; no digital zoom; cannot capture video
- No voice-record capability; iPod add-on did not function
- No TV out
- Safari doesn't try to reformat Web page for convenient viewing (like Windows Mobile IE's one-column view)
- Device does not operate in landscape mode in all applications
- Battery drains rapidly with Wi-Fi use; no transmit power setting
- Substantial delay for new voice mail notification
- Will not accept existing SIM card
- No external mute button
- Slow rendering of zoomed HTML content
- Slow JavaScript interpreter, no mouse events hamper Web 2.0 apps
- No streaming audio/video support
- No full-screen view in browser; large button strip always present
- No edit-in-place in Settings; each line of text is a separate entry page
- On-screen keyboard is large, opaque; obscures underlying interface
- No text select/copy/paste
- No rich text editor
- Vertical/horizontal scroll regions too narrow; trip underlying controls
- Feeling for home button can delete e-mail (trash button is bottom center of display)
- No file upload limits use of online document viewers
- Not addressable as USB storage
- Phone audio quality subpar
- No over-the-air sync options
- No third-party software
- Spelling errors are not flagged in text
- Cursor positioning inside editable text is difficult
- Cannot download content for offline playback except through iTunes
- No Bonjour support for iTunes, Web sharing
- Headset jack not phone standard
- iPhone pairs with MacBook Pro Bluetooth, but offers no supported services
- No master inbox covering multiple mail accounts
- Chat substitute uses expensive SMS (Web alternatives available but don’t signal on incoming chat invite)
- Fewer slideshow transition effects than video iPod
- No musical ring tones
- No exposure control in camera, very slow shutter creates blurry images