This, exactly. I'm currently taking care of a house for a guy in Costa Rica. Included with the house is a Generation 1 iPhone. He never installed any apps on it when he first got it, and when I went to try to put some one, it's impossible. All the apps currently available will only work with newer OS/hardware versions than the phone has. There's no way to make it compatible with the new store at all, so I'm stuck with it being just a phone. Not that I care (PC guy here) but if I'd bought an Gen-1 iPhone at the original insane price, and I'd managed to keep it alive all these years (what with the non-replaceable battery) I'd be pissed as hell that I couldn't actually use it with any of the currently available software. (note: this came up because my wife wanted to use the Kindle Reader app on the iPhone - not a spec-hod application in any way, and yet totally not backwards compatible.)