The iPhone is a fantastic piece of machinery, but as with all cell phones, it's only as good as its service and software providers. AT&T, currently the sole distributor of Apple's iPhone, has not demonstrated it is up to the task, and Apple isn't carrying its portion of the weight either.
First there were the massive activation server crashes upon release of iPhone OS 3.0. Users rushed to download the OS update and found that Apple's servers weren't capable of handling the multitude of requests. As a result, many were left waiting for the update.
Apple should have seen this coming and better prepared for the onslaught of users looking to play with a horizontal keyboard... and MMS. But, as it turns out, AT&T messed that one up, too. MMS is not available for OS 3.0 until "later this summer." AT&T claims the delay in MMS is not related to its 3G servers, but rather the tedious task of manually removing all the "Opt Out MMS" codes on each account in order to get MMS to work.
Another much-touted feature, Internet tethering, is also not yet available from AT&T. The belief is that Apple and AT&T are figuring out a respectable data plan for such a service.
All of these problems are relatively small and understandable given the insane popularity of the iPhone, but they should be fixed more quickly. Apple should be better prepared with its servers. AT&T should have figured out the MMS coding problem before the OS 3.0 release. And that long-lasting board meeting about Internet tethering prices should stop taking three-hour lunch breaks and finish up. Not only do AT&T's sluggishness and Apple's missteps make the iPhone a less-than-perfect experience, it is tarnishing both companies' reputations and making me wonder when Verizon is going to get its own Apple cellphone.