But if Nokia cancels the IT, you don't have a paycheck, right?

But seriously, I agree that Nokia IT probably will not go away or at least there will be at least one more significant upgrade to it. They will play to their strengths to attempt to differentiate themselves, and will not try to be slicker or cooler in their SW development to match the iPod/iphone in that way, although there may be a nice google UI on the WiMax version. Likely candidates are increased connectivity i.e., WiMax (if Sprint doesn't stumble), 802.11n, bluetooth 2.1 and pairing improvements, etc., that Apple historically hasn't done. It will be interesting to see if and how there is an OVI tie-in. They may also speed up the next version which was probably going to be mid-to-late 2008 otherwise.

Interesting though how quickly they have become competitors - just the last 3 months. the iphone, then OVI, and now iPod touch. I know Nokia did not consider Apple to be a major competitor 12 months ago. It will be an interesting 2008, especially if Intel gets into the space with their MIDs.

The company that this might concern the most in the short term is not Nokia - it's AT&T (unless they already knew about it). Who is going to buy a iPhone (+2 yr AT&T contract) when you can get an iPod touch and your choice of phone for less? Especially if BT DUN is eventually supported.