The notsocommoncents blog has a post about Apple and their strategy. I disagree to some extent and this was my comment:
"Apple continues to follow a model that brings it short term success (control the hardware and the software) It didn't work for PC's. Apple's music products have style and a plethora of add ons. Style tends to have a very short shelf life. The addon market is more important. Third parties add flexibility Apple never thought of. Apple's competitors can compete on price. Typically, they offer better features (built in recording, FM, now XM) for less money, just not the same level of style. In the long term, price beats style every time (assuming quality is level). (Dell vs. everyone inclucding Apple, Wal-Mart vs everyone including higher style Target).
My wife has an iPod mini and likes it, I made her buy it. I have a Windows Smartphone with a 1 gig mini-sd and Windows Media 10. She has more capacity, I have more flexibility (phone, music, movies), both were about the same price. At some point,all these devices will converge at a level where the disparities will disappear. I'm betting it will be around the phone rather than around the iPod. "