I'd say that "apps as first-class objects" was the real innovation. My first thought on seeing the iPhone demo was that having Phone as an app made so much sens

I'd say that "apps as first-class objects" was the real innovation. My first thought on seeing the iPhone demo was that having Phone as an app made so much sense! Every other device at the time seemed to treat apps almost like plugins running on top of a phone/productivity-centered OS. In iPhone OS, practically everything you did was neatly encapsulated by the round-rect of a friendly app on your home screen. The App Store naturally followed from this approach.