In response to rumors of an Apple portable gaming machine, Joel pointed out that it's a completely stupid rumor. This is because the iPhone already exists, and the only thing standing between it and gaming wonder is a pernicious assumption that you can't do anything interesting without a D-Pad and physical buttons.
Cult of Mac has a piece today making the same point, but it offers hard facts about the system that bring out in sharp relief how much potential it has. See the chart:
With its beefy specs and rapid sales, the iPhone's potential as a gaming machine is so overwhelming it would be odd if Apple didn't push it hard sooner or later.