John Carmack revealed that id Software is “vaguely” working on two iPhone projects. He said that the first project is an extension of their mobile stuff, whereas the second one features some nice graphics and is “unexpectedly exciting.”

Carmack said many a nice thing about the iPhone, and commented how he’s sad that his company doesn’t already have an iPhone product. id apparently considered developing Orcs & Elves for iPhone, but they couldn’t spare the resources, as Carmack estimated it would’ve taken "three man-months" to pull that off.

He also added that it’s possible to make a $10 million game for this device, as it’s more powerful than PSP and DS combined.

More here.