It didn't do basic functionality that a non-'smartphone' did, though. Like the whole copy paste thing or media messages. I also seem to recall it didn't do 3G data reception either.
It was behind on features normal Nokias and Sony-Ericssons everyone else owned already had. It's only because Apple has such an incredible following that the iPhone did as well as it did in the 1.0 form. Friends from Japan said it didn't really sell over there because of this lack. I seem to recall it wasn't until the 3GS that all features I had on my existing SE phone had been replicated on it.
Windows Phone benefitted from the same sort of thing, I'd say, but here it was business only trusting Microsoft things. Way before the iPhone was a glint in the eye everyone in my work had those HTC windows phone devices with the slide out keyboard and stylus. They weren't touch phones but they did everything an iPhone did.
The iPhone 4 was definitely a peak in the smartphone market. Incredible battery life, great screen, etc. Ahead of the competition for sure.