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Multitouch would have given the iPhone an advantage for a generation or two, until other manufacturers integrated it into their devices. The launch of the AppStore made it much more versatile and fun, and was a much harder feat to replicate.

Between an SDK built on top of the excellent MacOS X -> iOS operating system and services, the world class developer tools that came with all of that, and the sales model of the AppStore giving every dev easy access to essentially every iPhone user in the world, the only way to compete would be another similar software stack-- ie. Linux -> Android. This completely undercut all of the technical capital the existing players had built their products on and forced everyone to start from square one, well behind where Apple had already gotten.
Steve held the AppStore back for awhile. He wanted a close OS with html5 apps only for a long time.
 
LOL, my original iPhone slid out of my lap and onto pavement 18” when getting out of my car in college. It put dents in the corner. I still have it.

You didn’t put a case on the first iPhone. You couldn’t even buy one at first, and you wouldn’t want to because people would come up to you if you had one. I started dating my future wife within months of getting the iPhone. Coincidence? You bet your ass it wasn’t. Steve Jobs is a wizard. I stood in line for the iPhone 3GS during my honeymoon. And I’m glad I did or I wouldn’t have any video from my honeymoon.
 
Steve held the AppStore back for awhile. He wanted a close OS with html5 apps only for a long time.
It legit would've been better for the industry had they gone that route. But not good for Apple's profits.

The thing about web apps is, it tends towards being the same as running apps natively, except with open standards. Since every platform has its own thing instead, the web develops more slowly, but by now there's a ton of software running in-browser that never would have in the past (like Slack). Apple even intentionally avoided implementing some PWA features like push notifications.

Ironically, so many iOS apps are React Native now, basically web apps with IPC to whatever minimal set of native components are needed. That says it all.
 
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Would it? No third-party native apps at all?

Sounds very limiting, especially on an iPad.
It'd be limiting at first, but it's been 14 years now, 11 since the iPad. If Apple went all in on web, everything you currently need native code for could've been openly browser-supported by now. We got a taste of that when they said no to Flash, which at the time also significantly limited functionality.
 
Whatever happened to

"Boy, have we patented this!"?

Too bad all the rip-offs followed... especially the hardware thieves at Samsung with its 184-page engineering document showing each element of the iPhone, where their devices failed in comparison, and how to copy it.
 
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