Think of it this way.

The iPhone is like Disneyland.
It has a very controlled entry point and they've designed and polished everything you can do within their system to be top notch (UI, ergonomics, performance, etc), as long as you stick within their 'rails'. But you can't get out of the allowed play zones. Everything beyond that is 'cast members only'.

Like any theme parks, they always try to make new zones for the visitors to enjoy; you can see how different the initial iPhone release with what it can do today and it will continue to grow to cater to more users' needs. That is one way for them to continue to gain their marketshare and maintain their competitive edge against Android and Maemo.