I basically disagree with everything Jonny said in this episode. First off, and I think Neal will back me up on this, quit badmouthing DSiWare! Sure, there's a lot of iPhone ports on there, but, with the exception of Flight Control, all the ones I can think of are better on the DSi than the iPhone. There are also a lot of quality games there that aren't iPhone ports. Nintendo certainly supports it better than they support WiiWare; the Art Style games on DSiWare, in my opinion, are much better than the ones on WiiWare.
As for the iPhone discussion, I agree with the general consensus you guys came to, that the iPhone and 3DS will coexist relatively peacefully and not really eat into each other's market. You'll have people like me who'll buy both of them, but I don't think there will be many people who will see it as an "either-or" situation. An interesting point to make in regard to the argument that people don't buy gamer games on the iPhone and also that people won't pay higher prices on the App Store is that Square Enix is porting the PSP remake of Final Fantasy Tactics to iPhone, and they intend to charge $20 for it. The game is clearly worth that much money, but it'll be interesting to see how it fares.
Also, I doubt the iPhone will be getting a 3D display anytime soon, for the same reason they didn't put one on the other screen of the 3DS: the effect doesn't work well when you're using it as a touch screen, as it looks like there's depth there but your finger/stylus can't extend into it.