I'm writing this from CES 2007 — the latest and greatest Consumer Electronics Show, where 140,000 attendees crowd 2,700 exhibits packed into 1,660,000 square feet of space in more halls and hotels than I'll bother to count. There's a lot of noise here, and a certain amount of signal; though the ratio of the former to the latter is no less lopsided than it always is. Everybody's not only showing their good sides, but paying millions to crow about it through mass quantities of advertising and PR.

Yet the whole damn thing got upstaged Tuesday by Steve Jobs and his on-stage announcement of the long-awaited iPhone.

Normally CES and Macworld overlap barely or not at all. But this year the two shows are spread across the same week, forcing many (including yours truly) to choose one or the other — though I know a number of folks who flew to San Francisco for Jobs' speech and then back again. Of course, I chose to spend as much time as possible here at CES, because it's a show packed with Linux stories. (My first report on the show is here. This is second. A third will follow.) Yet, like every reporter here, it was clear to me that the biggest news of the week — or perhaps of the year — was delivered by Apple in San Francisco.

Jobs called the iPhone "a revolutionary product... that changes everything". He said the iPhone would be no less world-changing than the Macintosh in 1984 and the iPod in 2001. He said the iPhone was "three revolutionary products: ... a wide-screen iPod with touch controls, a revolutionary mobile phone and a breakthrough internet communications device" that together "reinvent the phone". He dumped on "smartphones" like the Trio, the Blackberry, the Nokia E62 and the Moto Q, with their "keyboards are there whether you want them or not".

The iPhone "gets rid of all these buttons", he said, and gives users "a giant screen" that uses fingers as a pointing device. The smartness behind the screen "works like magic", Jobs says. Specifically, it is highly accurate, ignores unintended touches and obeys multi-finger gestures. (Playing music, anyone?) "And you can bet it's patented." It's called MultiTouch. The screen is 3.5 inches diagonally, and 160 pixels per inch. It has three controls: "home", volume and mute/ring. The other orifices are for a 2 megapixel camera lens, speaker, microphone and 30-pin iPod connector. It senses ambient light and turns off the screen when your face gets close. An accelerometer rotates the display to adjust to your orientation. As you would expect, it looks cool.

It's also a platform for software. Specifically, OS X. (Which, for what it's worth, is built on open-source BSD.) This will allow "desktop class" applications to be built on the thing. They're starting with software that's "five years ahead" of the rest of the mobile phone class.

That's the phone side of the thing. It also syncs with your Mac or PC. Most notably through iTunes. (No, we're nowhere near Linux yet, but we'll get to that.)

As a phone maker like Nokia, Motorola and all other competitors, Apple had to cut a deal with a carrier. Cingular got the nod, at least for the U.S. That means the iPhone does GSM and will work overseas as well as on Cingular's domestic cell phone system. The iPhone also bridges computers to the Net over wi-fi or Cingular's EDGE.

Google CEO Eric Schmidt came on stage talked about combining Apple virtues with "the new architecture of the Internet" that allow you "merge without merging" through "open protocols and data services". He spoke of "enormous brain trusts", "powerful cloud computers" and "many many data services" that give you "full integration" that "comes together seamlessly".

Among standards he mentioned XML and HTML. He didn't mention RSS, but should have. He could have mentioned a hundred other standards, protocols and wide-open building materials, practices and methods without which we wouldn't have the iPhone, Apple, Google, the Internet — or the countless industries that won't happen until the old corporate forts and walled gardens finally break down.

Many have spoken or written about what the iPhone won't do. Tom Evslin laments the locked-in exclusivity of Apple's Cingular partnership, and also provides a nice run-down of comments from his own readers and other sources. Dan Miller says "The lack of attention to the need for hands-free operation alone is shocking", and adds a pile of other criticisms as well. Both Tom and Dan are veteran industry figures.

My own first question was "Where's the GPS?" Absence of that would be a deal-killer for me. But then at CES I talked with Garmin folks about the universal connected utility of bluetooth GPS receivers. The iPhone does bluetooth. Nothing to stop anybody from making the iPhone display and otherwise add value to information from a bluetooth GPS receiver.

And will Apple prevent customers from using Skype to talk over wi-fi or EDGE? Not if Apple wants to make good on Steve's description of the iPhone as " a breakthrough Internet communications device".

Knock what's closed about the iPhone all you want; it's still a computer with a mike, a screen, a speaker and a pile of other input and output openings that invite developments of many kinds. That's why I think iPhone is going make the cell phone market a lot bigger. It will encourage participation by developers and customers that have until now been forced to cope with far less than they've wanted from the cell phone industry. And that includes all the legacy cell phone players with which Apple now partners or competes. [See here. - DS]

Think of the Big Brother Apple add from 1984. I think this is just as big a hammer as the one that woman in the red pants threw at a screen 23 years ago. The phone business ain't gonna be the same any more.

So yes, the news is about hot gear and safe sex between consenting corporations. Yes, it's also about a company and a platform playing closed as well as open games. But its also about breaking down silos and opening up markets. And that's what matters most here.

Markets are mashups. By vendors. By manufacturers. By developers. By customers large and small. And, most importantly, but the "long tail" Apple correctly called "the rest of us" long before 1984. That is, by customers and users. We haven't been part of this market before, except as a source of noise and cash. Now we can start participating. The doors are opening. Some were already open. Tuesday's news just brings that fact to light.

Pull your mind for a moment out of all the hot news and vendor sports jive -- and think instead about the construction industry. This is the oldest and most mature industry in the world. It is also the model toward which the software industry has been moving since the beginning.

The basic building materials and methods of the construction industry are all open source. There are no secrets to rock, straw, grass, metal, wood and other base materials we cut, shape, mill and otherwise put to use in countless ways that no corporation controls. Where companies do control the manufacture and distribution of building materials, there are few if any cases where one company controls the way everybody builds their house. No maker of lumber or cement can tell a contractor that everything in a new house has to rest on that maker's "platform". When a crew figures a better way to hang a door or put up wallboard, they share that expertise with other crews and the whole market changes and matures. Opportunities open up. Work gets better.

Today the LAMP stack has grown to over 140,000 building materials. The rosters of standards and practices that nobody controls only get bigger as well. Apple may have patented MultiTouch, but there are sure to be plenty of other goods in the iPhone that are as open as the sky. Or Apple wouldn't have been able to build the thing.

Best of all, Apple has raised the ceiling for conversation as well as development in the broad new category of personal telephony. Long before the iPhone comes out (it's still months away), we can start talking about countless other devices we are now more encouraged than ever to invent or improve. We can talk about applications and services that no big company would ever invent, but will open the market to all kinds of opportunities.

My own first choice is making the phone a useful instrument for asserting ourselves as autonomous and independent "players" in every social setting -- including the one we call marketplaces. That is, free of every vendor and every organization that gives us the plastic cards that carry our names in our wallets -- as well as every company that has been trying to trap us in silos for generations.

We need to be able to roam freely, as identifiably or anonymously as possible. We need to be able to engage and disengage, to establish, manage and end relationships -- on our terms, and not just those of companies that list us in their Customer Relationship Management (CRM) systems.

How do we do that?

Well, some of us have been working on the independence part of this thing for the last several years through "user-centric" identity development. We're starting to work on the engagement part through VRM, or Vendor Relationship Management — an idea that has just begun to come together in the last several months. Now we need make user-based identity mobile. We need to base it on phones and other personal devices. After all, phones are far more personal than any computer.

And that's what we're going to talk about at the Mobile Identity Workshop at CNet headquarters in San Francisco on Friday, January 26. And sign up soon. Attendance is free, but space is limited.

I'd also like to see folks from Apple, Google (some have already signed up), Yahoo, Cingular and various other outfits who have been involved in the iPhone project and are now free to come out, meet with engaged users and other developers, and help empower people to operate in free ways in freed-up markets.

And I'd especially like to see folks from the growing Linux and open source corners of the mobile space come forward and weigh in as well, including Trolltech, Openmoko and everybody I insult by not listing here. We have an opening now. Apple is just one player, and they can't play alone. None of us can.

We can, and must, come from our own independence. Because that's what mobility, one of our most human of attributes, is really about.