When the video iPod gained voice communications hardware and software it became an iPhone - a small, PPC based (ARM is a PPC licensee), netbook.
So what's wrong with it? Not much - except that the screen size makes it a poor choice for the next step up: multi-point video conferencing.
Of course, most broadcast networks aren't up to that yet either, but that's coming - along with roll out or projected screens and keyboards.
Meanwhile netbooks are gaining market share and thereby exposing a huge Wintel7 vulnerability because when you boil away the PC marketing you can see them for what they are: portable smart displays for web browsing, email, and minor note taking - i.e. iPods with keyboards or bigger iPhones without the telecom functionality.
And therein lies the wintel7 market vulnerability: Windows 7 is the first Microsoft OS since NT 4.0 Workstation replaced NT 3.51 to need fewer system resources than its predecessor (and since 4.0 was basically just a VMS port to Intel it's the first one actually produced by Microsoft). Unfortunately it's still too big - particularly in terms of disk usage - for devices featuring Intel's light weight processors and 4 to 8 gigabyte flash drives.
So what's going to happen? is Intel going to push its mobile Linux variant past Microsoft? Is Microsoft going to cut Windows7 to fit - and reduce its licensing expectations to the netbook level? What?
I've no idea - but what I do know is that Apple has to be weighing the pros and cons of issuing an iPhone in a netbook format: an iNet - something designed to build share by capturing much of today's netbook market while creating a much larger future market for fully enabled voice and video conferencing on the go.