But it's not. It's geared at consumers of Apple Itunes Store and associated vendors (eg NYT). The thing is that this device at present is not a very friendly internet appliance - it is only able to browse one site, the screen is pretty low resolution and small so you have to zoom in and out a lot and there is no FLASH. It's not very functional and people these days aren't stupid. They open up IM sessions, have MySpace/Facebook. Most internet users these days were in school in the 90s and they had their own Geocities, Neopets and GaiaOnline pages/avatars/pets. The Apple iPad is half-baked as is. It's not a great Ebook reader - because it's not comfortable (LCD screen), it's not a great browser because you can only browse one site at a time and there's no flash (and who knows what other functionality is missing), iPhone apps look stupid on it etc. It's a device for consuming Apple content and not everyone is a consumer of Apple content. You still need a PC to rip your CDs to MP3/AAC. You still need a PC (incl Macs) to do any serious work or play. Gaming - sure - if you're into sudoku.
Also seriously, Alf, most people DO NOT NEED A SMARTPHONE. In fact most users of the iPhone could get by with an ordinary phone - just that they've been fed a ton of marketing hype and BS - that they need some stupid GPS applet or some other thing they don't need at all. LOL. The iPhone is a gadget.