alt Hacker News> Partanen was also at Nokia’s post-iPhone launch meeting, and recalls that there was little concern in the room. “We felt okay,” he says.
Which is a perfectly reasonable reaction, the first iPhone was an iPod with a sub-par Browser and a bad mobile phone, in a device which barely managed to last one day on a charge.
Others also had sub-par browsers, comparable/more versatile Media Players and MUCH better phones, running a week or longer on a single charge.
The way Apple destroyed the competition was by creating so much hype around their product that they could demand concessions from carriers, most of all revenue-share (and a scheme where the ~1000USD device-price included marketing budget the carrier could then "consume" from Apple), two moves which decoupled Apple from Market-pressure and created an incredible influx of money into their R&D.
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Oh, come on. Yes, compared to any modern device the iPhone was a piece of shit (no cut and paste when shipped? No 3G?), but as someone who owned a high end S60 device at the time, the iPhone was a breath of fresh air - the Maps experience on its own was enough of an improvement to justify it. The problem Nokia and others had is that they were judging potential iPhone buyers against the people buying their smartphones, not against the market waiting for a smartphone that wasn't an absolute piece of shit from a UX perspective.
For YEARS to come, carriers refused to rectify this skewed market, so while Nokia, Motorola, Ericsson, Samsung, LG had to continue jumping through hoops and could only earn money at the point of sale, while Apple's monthly income accumulated based on the total amount of active devices.
In the end, it also wasn't the carriers who rectified that situation either. After Apple was technically ready to support more carriers, they moved away from their "one carrier per country" exclusivity-model, so they also had to concede on revenue-share compensation.
But by that time Apple already had the search-deal with Google, so revenue-share continued to from the search-traffic generated in Safari.
All of those were genius moves, disrupting the economy of an industry which separated the product from provided services, ultimately gaining total control over the user and all services provided, degrading the carrier to a mere ISP (who was even happy about it because the average revenue per user was higher).
Nonetheless, it destroyed the entire mobile phone ecosystem (especially outside of US, where market-forces were less in control of the carriers)