Plenty of people on Twitter today were sharing a link to this story from John C. Dvorak in 2007 that was just too good to pass up ;).
The problem here is that while Apple can play the fashion game as well as any company, there is no evidence that it can play it fast enough. These phones go in and out of style so fast that unless Apple has half a dozen variants in the pipeline, its phone, even if immediately successful, will be passé within 3 months.
There is no likelihood that Apple can be successful in a business this competitive. Even in the business where it is a clear pioneer, the personal computer, it had to compete with Microsoft and can only sustain a 5% market share.
Imagine if John had been right and Apple ceased development after the first failed iPhone. Spare a thought for Android developers, who would be left for them to copy off? Microsoft? Would we all be using Kin-like devices?