As much as I like most of Apple's products, they've never exactly been for gamers. I think most of the reason for this is the low install base. Back in the late 90s though, Apple did take a stab at console gaming with the ill fated Pippin which was overpriced and underpowered. However, the Pippin did contain a lot of features that have become standard today such as integrated internet connections, a hard drive, and media playback capability. Apple seems to be heading for round two to develop another game console, and it's the iPhone.
With the release of their new software development kit (SDK) for the iPhone, Apple announced support for OpenGL rendering, OpenAL audio, and 3D sound. What about control? The iPhone has no traditional input. Apple plans on utilizing the iPhone's accelerometers for control. These three devices sense which of its three axis the iPhone is on. Control will work in the same way as Sony's SixAxis motion sensing function. For other input, it will use the touch screen in some way. When Apple introduced the capability, they showed off a space sim called Touch Fighter. EA and Sega also demoed iPhone versions of Spore and Super Monkeyball.

Apple is the latest phone to delve into mobile gaming, though from what I've read, they seem to be positioning it as a competitor to the PSP and Nintendo DS. "Good luck" was PSU's response to that. Obviously the games will be downloadable since the iPhone has no removable media drive. The problem is games take up a lot of space. Both the PSP and DS have about 1gb of space to work with. The iPhone has up to 16gb but assuming 500-1gb per game, that's not really a lot of space to work with. Secondly, while touch sensing has done particularly well for the DS, I think a lot of people will find the motion sensing odd. Sony has struggled enough to chip away at Nintendo's lead in the mobile market and I really don't think there is room for a third barring Nintendo releases another Virtual Boy.

Source: PSU

Update: For those curious about how exactly this works, check out the video from Apple's March 6th event. http://www.apple.com/quicktime/qtv/iphoneroadmap/
The part about gaming begins at the 41min mark. Keep in mind that this is just a proof of concept at the moment to show what can be done with the new iPhone SDK.