Yes, the iPhone as we know of is dead. A fully loaded feature phone with a fancy UI which could only do what Apple wanted to it to do is officially dead.
Come June, the firmware 2.0 will make the iPhone a smart phone. You can enhance the functionality of your existing phone with 3rd party applications, which will be innovative and will make you more productive. From Adium to Quicksilver, you will find all of them running on the iPhone.
To me, more than the SDK, the biggest announcement from yesterday’s event is the support for Microsoft Activesync on the iPhone. Now you can get your corporate emails delivered on your iPhone instantly. No need to use a Windows Mobile or a Blackberry phone anymore. This will help iPhone move beyond the consumers to the enterprises. No doubt, this will help Apple get bulk orders, which will make it possible to achieve the 10 million mark by the end of the year.