According to this forum, Apple will be using the cheaper iPod Touch’s display (480×320 @163dpi) for the upcoming iPhone 3G (480×320 @163dpi) in order to lower the iPhone 3G’s price. Many users and web sites have pointed out the iPod Touch’s display is much worse than the iPhone 2G’s (480×320 @160dpi).
I was once told by a wise man that the truth of many electric consumer products. The first generation is always built with higher quality materials in order to attract potential consumers with its wow effects. Second generation onwards, the material quality goes down as the product itself will get cheaper. On the way of each iterations, it gets some functionalities upgrades, downgrades, and / or cheaper.
In general, when a product reaches its fifth generation, its price and functionalities is best for money at consumer point of view. This holds true for iPod. The 5G is the first iPod with video and it was much affroadable.
But mobile phone market is quite different. I haven’t seen any real break through until iPhone came along which is 10+ years later since the not so mobile Motorola mobile phone introduced. Anyway, if iPhone did reach its 5th generation, the price & functions would be great value for money.