"An iPod. A phone. And an internet communicator," Steve Jobs said. "These are not three separate devices."
"Oh, shit," said the consumer electronics industry.
It became the talk of CES, even though Apple wasn't at CES. "I remember being sat in the CES press room alongside several other sweaty, exhausted journalists surviving on nasty coffee," TechRadar's deputy editor Dan Grabham recalls. "There was a bit of a hush over the room, although as I was working on something I didn't notice it until one of my colleagues turned to me and asked if I had seen what Apple had announced. I couldn't believe my eyes."
Grabham liked Macs, but "I'm not an Apple fan as a rule - but we knew this was big. The huge, whopping, massive deal was that it was a touchscreen, and what appeared to be an unbelievably good touchscreen with gestures."
The iPhone launch raised as many questions as it answered, Grabham says. "How had Apple done it - in cahoots with AT&T - without anybody finding out the details? How could it succeed in phones? What would it be like to use? Of course, we now know the answer to these questions, but at the time it seemed like there was a lot of stuff still to be worked out."
While Grabham sat in a room full of shell-shocked tech journalists, your correspondent blogged: "If this is as good as it looks, it could be more important than the Mac."
That turned out to be something of an understatement.
What the world is waiting for
"That was unbelievable," Grabham wrote in November 2007: he had "never experienced anything like the atmosphere". Was he at a secret U2 gig? A football match? The Victoria's Secret Lingerie Show? Nope. Grabham was in a shop - the Apple Store in London's Regent Street, as the iPhone hit the UK (the US launch had already taken place in June). The launch was "absolute pandemonium" involving headbutts, pratfalls and lots of cameramen and women.
Unlike more recent Apple product launches, where the queues consist largely of social media-advertising attention seekers and shifty types trying to buy 100 iPhones to sell at a profit overseas, the original queuers were normal people who really, really wanted to get their hands on the phone.
So what were they queuing for? On paper, the first iPhone wasn't that great: in our first review we noted its "considerable shortcomings". It didn't do 3G - we were stuck with the woeful EDGE network - or MMS, it didn't offer third party apps, it had an annoying recessed headphone socket, the camera was rotten and it didn't even do cut and paste. It wasn't cheap, either.
You'd have been much better off with a Sony Ericsson W960i or a BlackBerry Pearl 8120, we suggested at the time - wrongly, as it turned out. The W960i and Pearl were phones with some extra features. The iPhone was a handheld computer, and the phone bit was just another application.
It wasn't universally admired, of course. It was argued in these pages that the iPhone was "simply a repackaged version of what Palm, Sony Ericsson and Nokia have been doing for a long time... let's chat for a second about Apple's chances of making a dent in the mobile phone market." Today, of course, Palm and Sony Ericsson are no more, Nokia's barely hanging on and Apple is the most valuable technology company in the world, largely because of its mobile phone sales.
What made the iPhone special
As Techradar's Dean Evans explained in late 2007, Apple's greatest hits "have all been powered by superior interfaces: the Mac's desktop metaphor, the iPod's genius click wheel, and now the iPhone's feely-touch number." Multitouch wasn't new, but "it's finally been applied to the right sort of gear: complicated convergence devices aimed at consumers."
"Apple has shown it has a real solution here - a solution that sells - and now it is applying it to its other gear," Evans wrote. The iPhone's interface was coming to "the iPod touch, and if you believe the slosh of internet rumours, a possible MacTablet." As it turned out, the iPhone was a spin-off of the iPad project rather than vice-versa, but we did indeed get an Apple tablet - and Evans was right when he said that rival phone firms were often "aping the eye candy rather than rethinking their designs... who can blame them, when they have so much money tied up in the status quo?"
It took a while for the iPhone's impact to be felt in the industry. Steve Ballmer openly scoffed at it - "there's no chance that the iPhone is going to get any significant market share. No chance" - while Shacknews reported that RIM thought the whole thing was an elaborate stunt. The iPhone "couldn't do what [Apple was] demonstrating without an insanely power hungry processor, it must have terrible battery life." Both Microsoft and RIM have been playing catch-up ever since.
It's easy to mock dunderheaded rivals, but even die-hard Mac fans weren't entirely convinced. Discussing the launch on MacRumors, some commenters said that it was "a waste of a keynote", "too expensive for most people" and that it had a "tacky" exterior.
What the iPhone did
The iPhone changed Apple's fortunes: the week before it announced the iPhone, its shares were trading at just under $85. In July 2012, they cracked $600, making Apple the most valuable company of all time. In 2007 it had zero market share; in December 2012, the iPhone accounted for 53.3% of all US smartphone purchases. The iPhone is responsible for roughly half of all Apple's sales, two-thirds of Apple's profits, and 97% of all internet linkbait headlines.
If that were all the iPhone did, it would be amazing. But there's more. The reversal of the no-native-apps policy and the creation of the App Store has transformed the way we buy software, a transformation that's even visible in Windows 8. It's replaced all kinds of stand-alone devices, from handheld consoles to sat-navs and cameras. The UI, ahem, inspired an awful lot of mobile phone UIs, and encouraged Google to make Android more iOS-y and less BlackBerry-y. It loosened network operators' iron grip on phone design and features, came up with a better way of doing voicemail, and forced the operators to offer better data plans. It brought proper web browsing to mobile devices and casual gaming to millions. It paved the way for the iPad and today's Windows 8 and Android tablets, ushering in what Steve Jobs would later call the post-PC era.
It's still pretty crap at making calls, mind you. But maybe we're just holding it wrong.