Big deal. New cell phone hardware doesn't matter that much anymore. What's important now is software. And networks.

Slideshow: Forget iPhone 3G S: Eight Great New iPhone Alternatives

Two years ago, the choice between an iPhone or an alternative to the iPhone was mostly about hardware. Cell phones had always been about hardware first, software and networks second.

The iPhone decision back then was: Can I live without a keyboard? The upside was a huge, high-quality screen. Do I want to control apps with touch? Or would I rather navigate menus? What about that horrible battery life? On the other hand, look how thin it is. It was all about hardware.

Now the decision is different. Do I want the iPhone's thousands of apps or the Palm Pre's multitasking ability? Do I want Android's Google search centricity or Windows Mobile's Microsoft Office compatibility? It's all about software and networks.

Don't believe me? Try the following thought experiments:

1. Apple rolled out this week an awesome iPhone 3.0 upgrade. The software improves iPhone 3G performance and functionality. Of course, the new iPhone 3G S runs the new 3.0 OS as well. But if you had to choose between the old iPhone 3G with the new iPhone 3.0 software, or the new iPhone 3G S with the old iPhone 2.0 software, which would you choose? I think most would choose the old hardware with the new software.

2. If you had to choose between the original iPhone, but have full access to iPhone Apps, or choose the new iPhone 3G S but have zero access to Apps, which would you choose? I think you'd go with the Apps.

3. Which would you choose: The Palm Pre with the iPhone 3.0 software, iPhone Apps and iTunes - or the iPhone 3G S running WebOS and accessing the Palm App Catalog. I think most iPhone fans would choose the Palm hardware with the iPhone software and network. And most Palm fans would choose the iPhone with the WebOS. (What Palm users like best, according to my own unscientific poll, is the WebOS and its gestures, "card" system and multitasking - in other words, the software.)

In fact, Apple is dominating the cell-phone handset market precisely because it realizes the new primacy of software and networking. Apple set up a development system that resulted in a huge number of standard-functioning low-cost applications. This month, they also rolled out new hooks into MobileMe, which give the iPhone new functionality - and users new reasons to demand an iPhone.