Steve Jobs main market is the power user who wants to merge their iPod, mobile phone, and a PDA device into one. Here's a great statement about what point they are targetting the phone to:
"Before we get into it, let me talk about a category of things ... the most advanced phones are called smartphones. They typically involve a phone, have plastic little keyboards on them, the problem is they're not so smart and they're not so easy to use. If you make a biz school 101 graph, cellphones are at the bottom... smartphones are a little smarter, but they're harder to use."
- Quoted from the Engaget MacWorld 2007 Keynote speech page (http://www.engadget.com/2007/01/09/l...-jobs-keynote/)
Let's stick to the discussion about the phone itself please.
As far as things go with language recognition for the iPhone in other languages... I would not be surprised for the Asian pictograph languages (Japanese, Chinese, Korean) that you will be able to use your fingers as a stylus and draw out the characters. The Motorola A732 had an interesting concept where the number pad was touch sensitive. This was interesting as you could draw out the characters and the GUI would display a preview before confirming input.
Here's a link about the Motorola A732's touch keypad recognition:
There's another link somewhere with an interview with the linguistics specialist of Motorola, but I can't seem to find it...
I would imagine the same concept could be easily applied for those countries. Apple is pretty good about localization, so I don't think there should be any worries or qualms about Asian region countries.