The iPhone will reset consumers' expectations about cellphones, said Thomas Thornton, a cognitive psychologist at Perceptive Sciences, an Austin research firm that tests mobile products.

Competitors taking cues from the iPhone are adding features like larger color touchscreens, user-friendly Web browsers and high-capacity music players to their phones. Verizon Wireless is planning to roll out updated phones with similar components. Last week, Sprint released its Mogul phone, with an extra-large screen and a WiFi connection. It is planning a music phone aimed at teenagers this fall.

Phones that double as music players, cameras and Web browsers have been on the market for more than two years, including Verizon Wireless's Chocolate phone and T-Mobile's Sidekick. But the iPhone's simple design, coupled with the user-friendly reputation of Apple's brand, is the biggest draw, McGuire said.