Before the iPhone the phone market was primarily "feature phones" - flip phones with a keyboard and a few built-in JavaScript apps. The Blackberry wasn't much different - just a better keyboard with a focus on messaging/business use.
The iPhone was quite radical - masterfully presented as an iPod, phone, and internet communications device, before revealing that they were all capabilities of the same device.
https://www.youtube.com/watch?v=x7qPAY9JqE4
The effect on the phone market was immediate, and turned the market upside down. It was basically the end of Nokia who had been dominant up to that point, and caused everyone else to scrap current plans and go back to the drawing board, realizing that this new pocket-computer smartphone concept, with it's large touch screen interface was obviously the future.