When 1 + 1 = 3
Many people think that software is not that important. Well, on the iPhone, it is so important that it would probably never had shined as much as it did. iPhone OS 3.0 is what every iPhone users consider the first feature complete iPhone operating system. It bring to the end user every thing that they need and was long promise. Seriously, all that I can think of now is minors upgrades. If Apple release iPhone OS 4, it will be as long standing as OS X which will celebrate it's 9th year of existence soon.
Cut-copy-paste, undo-redo, push notifications, accessibility features, spotlight, youtube uploading, compass, full-fledged AGPS. What would you want more? Space to store your medias? Is 32GB enough? Space to store you documents? Is 20 GB enough? What do you really need more?
The iPhone as a PDA
Apple want you to see the iPhone as a simple yet powerful PDA. The software was also made accordingly. The first version had only simple and yet very useful features that about every phone has today, unless you found a phone that can't call, off-course. The second revision showed how much it can really do, by letting third parties play with it. Finally, the third and current revision was designed in response to the users and developers who wanted Apple to let them do more.
Apple want you to see the iPhone as a PDA; With powerful calendar, contacts, media and internet capability. Under this perspective, you will always get limited potential. Even then, this limited potential is still very far away.
What it can do
In OS 3.0, Apple added support for more than 1 000 APIs which bring many more possibilities with them. Right now, you can see augmented reality app emerging, ways to know what's going on instantly on the world with push notifications, record wonderful videos and publish them directly to youtube and that's over the already possible stuff. I must say, those features work very well and are functional up to the very detail. Just try to tap the microphone in the Voice Memos app and you'll see the VU meters peek. Even if it's not very useful, it show you that it work so well that those who created it even think it's time to relax and have some fun!
What you can't do
The limited vision of PDA's give the iPhone a great knock-back. There's so much it can do and so little that it does. Ho yes, the app store is full of surprise but no one ever released an app that's on every single iPhone. An app that could really make that 800$ device do something other than enjoyable. That's something that would certainly interest business which is not the iPhone's specialty right now. That something is a fully fledged iWork or Office for the iPhone. There is very much you can do right now with web apps like Google Docs and Office 2010 web services but they where not designed for this. We need a real, official, office suite for the iPhone. We also need it to be used like a USB drive. And I'm not talking about getting root access to everything. Even if it's just a sandboxed app that work like the iDisk or Air Sharing, it would be perfect. It will let you use those 32 GB of space. And with this come the ability to download any file to the phone, directly to the storage app if there's no other application that can do something with the file.
Review
There's not really something to review about the iPhone OS that wasn't already discussed. The only thing I can add is that the iPhone is now very mature, people and business ready and just wait for a user to download some apps and get it to do it's job; As the best smartphone on the market yet.