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and there is ALMOST ALWAYS a serious mis-feature or limitation of the Gen 1 product which is corrected on Gen2.

I was willing to live with gen 1, because it's so damn good. And so far, my Gen 1 products from Apple haven't left me with a feeling of missing a serious feature or have major limitations as you state.


Well, for the iPhone, in my opinion, the "limitations" are
  • lack of 3G,
  • not letting me draw on my multi-gigabyte MP3 library as a source of ringtones,
  • not having 32GB or 64GB of flash (which will be standard by the time my cellphone contract expires in 2009)
and the "serious mis-features" are
  • being locked into Suckular for 2 years, and
  • not allowing me to run Firefox or at a minimum installing an AdBlocker in Safari so I don't spend EDGE download time waiting for annoying ad banners,
  • an almost Microsoftian app/framework tie-in to iTunes/iPhoto/iCal/iMail/AddressBook/Safari


I still think it's swell, though.
And I will shortly be spending the newly announced $100 rebate at the Apple Store on Bluetooth stuff (or a second Mac battery for long plane trips).

Edited to add Limitation#3