Think about what the iPhone had at the time compared to what we were used to, provided my first was the iPhone 3GS.
It was one of the first phones that actually had an incredible touch screen compared to the best phones of the time, it was one of the first phones you could scroll and navigate smoothly without hitching, something Samsung struggled with for years. The ability for the device to seamlessly rotate between portrait and horizontal views. The ability to toss away my MP3 player and play music in the same way from my phone in a user friendly interface. The ability to do all of these things on the one device and have an interface that allows me to switch between active applications that could run in the background. The iPhone introduced the idea of gestures that actually worked, even just the idea of pinch and zoom functionality was an absolute game changer for mobile phones and Apple nailed it. It took companies years after the release of the iPhone to implement a decent touch screen that allowed smooth pinch and zoom functionality.
These were at the time some of the things that made the phone smart that we didn't have before. I think sometimes people forget some of the subtle things the iPhone brought with it that were a complete game changer