GigaOM has a good article called Make That Device Simple:
"Simpler is better ? despite popular wisdom and a marketplace ingrained in the creation of products that are ever smaller, faster and more feature laden," said Roland Rust, "Our research showed that consumers will be initially attracted to the mobile phone that 'does everything' for example, but once they get it home they become frustrated," Rust said. "Companies can actually make more money in the long run by making products that are simpler than what customers think they want. The smarter strategy is to design simple, dedicated devices like the iPod, that do one thing very well, to build long-term satisfaction and profitable customer relationships."