Photos from the first-generation iPhones really benefit from color noise reduction applied to them in Camera Raw or Lightroom. I've always been impressed by the image quality my iPhone can deliver (for a camera phone), but you can bring out even more quality with the right develop settings.

A 100% crop from an iPhone JPEG with no color noise reduction

The same image with 45 points of color noise reduction applied in Lightroom.

In this example, the purple blotches in the solid background colors just go away completely. There is still some grain-like luminous noise, but it does not ruin the image.

The effect is evident even when the images are scaled down for the web.

No color noise reduction

With color noise reduction.