Ok, to be fair the Apple Newton was before Jobs returned but I think there are some interesting parallels on these two products.  The Newton was a bit early to market and had a few hiccups including ease of text entry.  The market for PDAs exploded and Apple was not in it.  Fast forward 15 years and here we are with the iPhone.  True, folks like their iPods, they like their cell phones, and mobile devices are being utilized more and more to connect to the internet albeit at slow speeds so it appears the market is demanding these capabilities. 

So, I go back to the text entry piece.  The absence of a Qwerty keyboard or any type of keypad may create some problems.  Here’s Fred Wilson’s observation on that very thing.

I did a bit of searching on this and came across this post by Phil Baker who managed development on the Newton.  Here’s his take:

"So what are we to make of the buildup for the iPhone? The hype is certainly similar and the stakes are just as high for Apple. Ironically, concerns voiced by analysts are the same: battery life, pricing, and especially the ease of entering text.

There are major differences.  There’s already a market for cool looking iPods and cellular phones. And there’s a need for better ways to connect to the Internet. The iPhone will likely perform these functions with aplomb. However, unless people can conveniently input text into the device, the iPhone could be the next big disappointment."