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This is blatantly wrong. iPhone was the device that lacked a lot of HW capabilities compared to other manufacturers. The brilliance of iPhone was in the fact that these HW capabilities stopped mattering. Why? Because everyone could build a mobile phone with a camera, GPS, fm radio, wifi, mobile hotspot, etc... Apple focused on software. They got it right with a lot easier to use touchscreen. Their APIs were also miles ahead of the competitors offerings in the ease of use apartment. You propably don't know how PITA it was to do any kind of development on Symbian. Back then it was all symbian. Android was just coming.
All the necessary "smartphone" hardware existed before the iPhone. However they became a commodity for every phone manufacturer. Apple came to the market with the best software platform. Before the iPhone the focus was on hardware. When was the last time you saw NEW hardware in a phone that ain't just a spec update?