What made the iPhone a market killer was the interface, the phone's OS. Nothing else at the time came close. Remember we were comparing iOS to Windows Mobile and Symbian and BlackBerry with terrible interfaces and horrible browsers, or sad attempts by manufacturers to skin said OSes.
It also did change the industry because previously getting into a carrier's "deck" to get apps or games or whatever into their phones was a HUGE effort, I know, I got stuff onto Sprint and saw the kind of hoops you had to go through to even have a sniff of Verizon's deck.
While the iPhone was a closed system, rather than having to deal with the carrier to try and get a game or an app on their deck, you just had to submit it to the app store, and you were done. That broke the whole industry open when it was a runaway success.
Carriers were deathly afraid of being just service providers to provide a connection to your device, they wanted an iron grip on every bit of content that made it onto the phone because then they could try and drag you away from a different carrier on something other than just the price of voice and data. The iPhone/App Store completely changed that.
Kind of a perfect storm of a UI that was light years beyond anything else and a complete change in the carrier's stance.
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