There’s a lot of hysteria surrounding the iPhone. It’s a phone. OK, my Treo’s a phone. It’s an Internet device. OK, my Treo can browse the web (sort of). It’s a digital music player. My Treo does that. It’s a camera -- got that too. So, does the iPhone really matter?

Yep…but probably not for the reasons you expect.

The iPhone is important, not because it will dominate July mobile handset sales, but because it will be a bar-raiser in the world of convergence. For 15 years, the industries talked about convergence, thinking that convergence meant TV and PC coming together. Only in the last 5 did the world add mobile to that melting pot. But convergence is happening, and it’s in your hand (as well as your PC and living room).

The problem to date has been that the converged mobile devices have largely been hacks. For lots of reasons: the chipsets have been underpowered, the RAM has been limited, the operating systems have not been up to the task, and the applications have been…well, lame. I’ve owned every Treo and almost every Blackberry, and they are each only marginally better than where they started. So, where have we gotten in almost 10 years? To a world where:

• people carry a Blackberry
• and a phone
• and an iPod
• and separate digital camera
• ...and they despise using the Web on their phone

Now, I don’t expect the iPhone to be the be-all-end-all in Version 1.0. In fact, I expect that there will be a number of good people who: Get $600 out of the bank. Get the phone. Get disappointed. Get over it. [See my previous post on CE returns.]

One thing is for sure, though, the iPod will up the ante on bringing a phone, an iPod, a camera and the Web together into one device. Apple’s apps will, as they generally do, set the bar for clean interoperability. But the iPhone, due to its closed system, inevitable version 1.0 bugs, the Cingular/EDGE exclusive, the radically new interface, among other reasons, will leave plenty of opportunity for others.

Apple will have raised the bar, but the rest of the industry will have lots of jumps at it.

Most importantly, though, consumers will be the winners – no matter what logo is on their handset. Apple will have brought the user experience to the forefront, just as it’s done with the iPod, and everyone in the industry will have to think first and foremost about the customer.

So, in the not-too-distant future, you will realize that the iPod you take everywhere with you today increasingly gets left at home, and you don’t miss it. And then it will dawn on you that the iPod was largely a transitional product -- a highly successful phenomenon that paved the way for new functionality in a device that people actually want to carry around with them (a phone).

And then you will say, “It’s a whole new ballgame!” as you look down at your digital camera.