That's the point. Apple showed people what could be done with smartphone technology. Literally, Steve Jobs got on stage and played with music, maps, the web,

That's the point. Apple showed people what could be done with smartphone technology. Literally, Steve Jobs got on stage and played with music, maps, the web, etc. in front of people to introduce how the iPhone would be important to them. Everyone else was trying to find uses for the technology and they weren't coming up with anything compelling. Smartphones (and PDAs) existed before the iPhone and people were trying to find that compelling combination and they were coming up with garbage like, "um, what about faxing?" Yes, AT&T (and everyone else) didn't anticipate the iPhone, but everyone anticipated a good computer in your pocket powered all day long - they just couldn't make it a compelling experience. The iPhone is the meticulous design of applications, features, and affordances that make it a compelling user experience. Everyone kinda anticipated "internet on phones". The iPhone showed how the internet on phones could be a positive experience. Everyone anticipated music on phones. The iPhone showed how that could be the best music UI. I don't think there's anything that the iPhone did that hadn't been done before, but poorly. The point is that a lot of it is bringing many different things together in a cohesive, compelling product. You could have bought a Windows Mobile device before the iPhone came out, but it was just crummy. Saying that it's because AT&T shows it faxing is a bit of a cop out. Microsoft had PocketPC devices for around 7 years before the iPhone. The name is literally a computer in your pocket. Everyone has been anticipating a computer in your pocket for a long time. Apple made it compelling. It's possible that you don't remember all the talk about pocket computing, all the ads, all the failed products. They were there. Everyone was not only anticipating them, but trying to make them. They just didn't know what they were for, what the UI needed to be like, what affordances users wanted, etc.