Palm pilots with phone functionality is basically exactly what newer model iPaqs were.
That's what the Palm Treos were too, and Apple ran them down as well.
It's the same reason that the likes of Netbooks sold hundreds of millions of units
It's not that previous devices, whether smartphones or tablets, were business-oriented, it's that they sucked compared to what Apple came out with.
I worked for Palm in the early 2000s, and yeah, the Treo 650 (and later models, although the 650 was the most rock-solid IMO) was a very nicely integrated PDA and phone. But the iPhone left everything that came before it in the dust, especially when it came to browsing the web. I agree with the previous poster(s) who said that the web was the killer app for phones.
As for tablets, the pre-iPad Windows tablets were a joke. Very few apps were written for the tablet OS and UI, and overall the interface sucked ass. Try right-clicking with a stylus. You could do it, but it was like your fingers were playing Twister.
Saying that the iPad was nothing new is asinine. The iPhone and iPad clearly redefined their categories, and the proof is in the products that their competitors are making, all of which are very evidently modeled on the iOS devices.