Well, I am not surprised. Landline services are damn costly in the US. I pay some $30 (taxes and all crap inclusive) to Verizon per month for local dialing. It comes with no add-on features. In India, landline services with all Extra features like caller-ID, call hold, conference (whatever), costs $4.50 per month. Yes, local calls aren't free in India, they just cost 2.5cents for a 3 minute call. But my monthly bill is 25% of what I pay in the US for a useless service. The most funny thing I find in the US is that caller ID is charged $6 or so. When it costs nothing to the service provider to provide that feature. It it time that the service provider starts doing some aggressive marketing. The landline service is just too dull, boring and expensive.

When I heard the first iPhone wasn't 3G, I immediately nixed it. With 3G, I breifly entertained changing to them (but both negative experience with ameritech/cingular - now AT&T - along with missing features I consider essential to my usage killed that thought quickly). So, I am not surprised that others chose to hold out for faster mobile broadband speeds.

Nor do I find landline usage dying out. There are many good alternatives out there. Infrequent users, road warriors, and those who don't want to be constantly annoyed by telemarketers may choose to use a cell phone instead. Cable broadband users (and those who can get DSL service without land line service) might choose a VoIP service - after all, I pay Packet8 $210 a year plus $4 a month for my unlimited national calling plan.

However, I do know a lot of US phone fees do go to subsidizing phone service to rural areas. Often, these people do not have adequate broadband service or cellular coverage, and thus they have no choice but to pay high fees for what most urbanites would consider sub-standard service.

Thus, the iPhone has little to do with a drop in land line usage. It is better cellular coverage in general along with other alternatives that are eating into these sales.