That's the problem ... Laptops are more powerful and not much bigger ...
iPhones are pocketable ... ...
How much do you use it Pete ... Day to day ...
I have a mate who has a crap mobile phone and no other pc at all ... For people like that I can see the attraction, but that's a limited market! Apple marketed this as something that filled a gap ... I don't think there was a gap to fill, apple jut made a gap ... With marketing!
As with a lot of tech, the markets are driven by supply not demand ... Clever ideas are usually what make products sell! The iPhone sells because it changed the face of mobile technology and continues to provide (above all) a simple and easy to use, yet enormously powerful solution for keeping up with the world that is literally at the tip of your thumbs ... I'm on mine now! The iPad provides little more than a bigger screen with slightly less comfortable useablility ... ... ...
For all this yapping though, I sorta want one! Madness!