So they were a niche product with a horrible interface, they had no idea what the general public wanted to use them for, and yet those "smartphones" were not dumb, they were smart?smartphones were not dumb before the iPhone. That wasn’t the reason why they didn’t become mainstream, but the iPhone did and every other phonecmamufacruer then copied the iPhone.
Smartphones before the iPhone were a nice product because of the interface. A lot of the pre-iPhone devices ran on Windows CE, so a cut down OS but modelunek on MS Windows. Irrespective of what you thought of Windows at the time, the UX did not transfer well to a phone-sized device, and, outside of tech enthusiasts, people didn’t really want to do „Windowsy” tasks on a phone. It was easier to do those on a PC.
What Apple got right was working out what the general public wanted to use their smartphones for. That’s not about „smart” or „dumb”, it’s about properly understanding your target market.
Apple nailed the what / how / why of the product category and redefined it and everything afterwards shifted. You can see it in the before / after pictures of smartphones pre-iPhone and post-iPhone era. (And we don't even have to mention Android, which blatantly ripped off iPhone and iOS.)
As Jobs said about pre-iPhone smartphones in 2007, "The problem is they're not so smart and they're not so easy to use."
By your calculations, we can also add "they had no idea what the general public wanted to use them for." These phones may have been useful for a niche audience but we can't call them "smart."