Peter — You make a really interesting point (and one I overlooked) about the hardware market not being limited to devices requiring a user interface. Your examples of energy systems and automobiles getting online are interesting ones too. Congratulations by the way on Bug Labs' launch of the new prototyping and app services — i look forward to hearing more about those.

Cisco has called it the “Internet of Everything” and it's becoming a reality. For example, we're working with companies doing interesting things getting automobiles and trucks (basically anything that moves) on the net. Applications that have NO user interface. Users interact with the system via a web browser located somewhere else. Maybe even on an iPhone Others are working on getting their energy systems on the net. Accenture calls this trend “trivergence” which points to an emerging information architecture that separates the content from the application from the interface. We're seeing evidence of this in many places. The point is, there are hundreds if not thousands of applications for markets that are not suitable for the iPhone. Nor is Apple interested in them. Individually they are too small. But collectively they all make up this long tail. Bug Labs approach allows innovators to explore and profitably enter these markets quickly and at lower cost.

Ultimately, we're not trying to make people do things “our way” vs. Apple's “way”. We're much more interested in just making it easier for everyone to innovate with hardware. I think there's plenty of room in the market for all sorts of players right now.