A platform like the iPhone was made for casual, persistent gaming. I want a little virtual pet in my iPhone, ready for me to take care of and level him up at a moment's notice, polished with quality and creativity. I want awesome little pick-up-and-play games that save my progress and track my stats. Shipley's idea of a virtual collectible card game, or the networking game in which "pets" on iPhones close to each other start fighting is perfect.
I like what the iPhone devs have done so far-- the NES emulator was one of the first iPhone apps that really "caught on," and as soon as it can be done "legally," it probably will be. But this is a system that, if given the right software, could compete with the most popular handheld systems. Even the DS doesn't have multitouch. If the right folks have the right ideas and implement them the right way on the iPhone (and why wouldn't they?), this little gadget is going to become one of the best handheld software platforms (for gaming or anything else) ever made.