Nokia N98 is still in its concept stages. It's news has been making making rounds on Internet circles for some time though. But its features viz 5x Optical Zoom, new Symbian OS, Carl Zeiss optics, 7.2 MP Camera are yet to be confirmed.
If the above is true and it has all the features of its predecessor (Nokia N97) than it is definitely better than iPhone.
The Nokia N97 which has been released recently and can be booked online is far better than iPhone in terms of features:
Screen:
Iphone: 262144 colours, Nokia N97: 16 million colours
Camera:
IPhone: 2 - 3 MP (Variant), Nokia N97: 5MP with Carl Zeiss optics.
Memory Card Slot:
Iphone: NO, Nokia N97: Yes
FM Radio:
Iphone: NO, Nokia N97: Yes
Text Messaging features:
Nokia N97 is better. The orignal Iphone simply didn't have a simple "send to many" option, though software updates have corrected this glitch. Still in general Nokia N97 is better.
Flash or Java Support:
Iphone: NO, Nokia N97: Yes
Price:
Iphone: Rs 31000/- to Rs. 36000 (variants), Nokia N97: 36000 Rs (approx, kindly check)
Storage Capacity:
Iphone: 4 GB to 32 GB (variants), Nokia N97: 32 Onbard + expandable via memory slot.
Music playback:
IPhone: Apple with its long history with Ipod's is bound to have a better music playback than Nokia N97.
Bluetooth:
Iphone: No Native support for transferring pictures, videos etc over bluetooth. 3rd party software solutions exist though.
Nokia: N97: No problems.
Even Nokia N96 (RS: 38000/- approx) and Nokia N95 (Rs: 28000/-) have these features.
The good points of the Iphone are its fun and responsive touchscreen (N97 has it, N95 AND N96 don't) and its built in accelerometer and proximity and light sensor which are fun to use, but will probably not be used much in practical life unless you play games based on these.