I don't think the iPhone could be called Smartphone.
What makes a Smartphone is in my point of view the ability to install native 3rd-Party Software.
That really makes a Phone smart and usable as something like a "Computer 2.0" (Nokias marketing term for the N95).
The iPhone is like all the other newer feature Phones (for example the S40 Devices, or the SE K800i). They all can play music, can receiver Email, have some PIM-Tools. And they are in contrast to the iphone able to run j2me-applications. Sure the iPhone has a big nice touchscreen with a good UI and a powerfull browser. But as iItested it, browsing the Web over EDGE was slower than on my E61i over UMTS with Opera Mini.
And about Microsoft and Windows Mobile:
I don't think that their position is that bad.
Looking at the People how really are beware that they are buying a Smartphone (buying the device just because they want a smartphone), MS's marketshare is much bigger.
Nokia does somehow "fake" the Smartphone sells just by giving nearly all their mid- to upperclass phones S60.
Nokia is the Nr. 1 in Mobilephones. Their phones like the N95 wouldn't sell much less if it would be shipped with S40.
When i look at my friends/parents. A lot of these use S60 devices these days. They where sold to the average phone user. Most of them just use it just to make phone calls, write sms, using the camera, contacts just for phone numbers. Most of some aren't even aware of having a smartphone with the ability to do much more (installing aplications, browsing the web, writing emails) and they couldn't care less about these features. They just use it as normal feature phone. They do not need a smartphone. For them a N72 is just like all the other Mulitmedia feature phones like the ones from SE or Samsung for example.
Looking at the Windows Mobile buyers this is much differnt. Nearly all of them buys them just because they are WM Smartphones. They are all quite aware that they are buying a smartphone with a microsoft os on it. And in the buisness market, MS position is much better than Nokias. Windows Mobile does integrate much better in the normal Windows environment.
Sure nokia has the E-Series but the best selling one here is the E51. Again a phone that apeals to the average phone user (good price, small in size, music player features, camera). A friend of mine just got this phone, she doesn't even know that she bought a "buisness" smartphone. For her it is just a phone with camera, music player which looks nice for a good price.
For the real smartphone users (the users on this site for example) the apple iphone is not really an alternative. It looks nice and is really good for web browsing with its touchscreen ui (at least when a new version comes with UMTS/HSDPA). But a S60 User will miss a lot of features.
If the iPhone would not be that expensive and not bundled to a really expensive contract (at least that is the case in germany) for the average user of a N95, E51 and so on, the iPhone would do better and a lot of them would get this if it were cheaper.
So i believe the one how really should do something is not microsoft but Nokia.
That all is btw the explanation why Windows Mobile Software does sell better then S60 Software. Most of S60 Users don't know about that and doesn't need it. WM Users are just Smartphone users and about 90% of them are interested in using third party software.
So, even if my english is bad, i hope i made my point clear.
Im am really interessted to know what you think about that.