Is it immoral to reverse-engineer a product?

NO!!!!!!!!!!!!!! It is totally legitimate and above board!!! If YOU make a product, weather it's a loaf of bread or a rocket ship, it is YOURS! If you want to sell your product it is your right to do so, also you should be paid according to how much of a value someone will get from it. I have heard that "A company" did this with a music device. . .they had a fancy device with lots of cool bells and whistles but put out several devices (starting with the simplest one) over several years each one with progressively cooler features. As a consumer it is your goal to get the best product for your money. . .If you buy the first gadget that comes out you don't get to be mad two weeks later when they cut the price or release a newer cooler one. YOU CHOSE TO BUY THE PRODUCT soooooo IF YOU MADE A BAD CHOICE it was still YOUR CHOICE. DEAL WITH IT!!!

Software companies are in a difficult position because copyright-able code is written to achieve a desired functionality. But people don't purchase code; they purchase functionality. The code itself is invisible to most users. Reverse engineering is a technique to achieve the same functionality with different code. So, strictly speaking, this is not theft.

But who owns the concept? Did the Apple company invent the idea of a phone without buttons? Or did they just come up with the most fully realized product? If another company, say Sanyo, uses the concept and improves upon it, is Apple harmed? Or do they just do the same back to Sanyo with their next version?

This is the nature of ideas; each builds upon the other. Just compare what inventions and markets have been created in the past 20 years compared to the days when the government regulated AT&T.

Should an inventor be able to protect and profit from the product of his labor and ingenuity? Absolutely. But there are practical limits.