Pretty much a great success. No?
For a new market entrant, yes. The model was still heavily outsold by things like Nokia N95.
Let's put it this way:
The 1st gen iPhone wasn't the game changer some make it out to be.
The real game changer was the SDK and App Store that enabled developers to develop apps - and the iPhone to take off (coinciding with the release of the 3G and expanded country/carrier support). Not only the iPhone, but the whole smartphone market/industry. And that's what killed Nokia and Microsoft's Windows Phone: Availability of apps.
And that's as true today as it was back then:
The App ecosystem is key.
Quoting again from above:
And if your going to be stubborn about having Apple change how it does things. Be prepared for them to say "you know what, I'm out". Or they just turn off the store and sell your citizens and iOS device that's pretty bare
That's no viable course of action.
? Nobody will buy 500€ or 1000€ smartphones if they can't download and install native apps on them.
? It will cost Apple billions of dollars in revenue and earnings, and much valuable market share. Shareholders are not going to like it.
And it isn't a credible or effective threat in trying to force lawmakers' hands by public uproar either. By shutting down the App Store in the EU, Apple would be facing an uphill battle about public opinion that they can't win.
- There's very few people championing "free enterprise" and unregulated markets. A broad majority supports actively regulating big IT/tech companies (probably even more if these companies are American or British).
- Outside for a of the circles of a few Apple fanboys (and -girls), Apple doesn't enjoy great brand loyalty in the smartphone market. Most phone users are either indifferent about brand or consider Apple "
as having almost extortionate prices but darn well-made products". That user experience will be severely compromised by shutting down the App Store. Or they are invested in the "ecosystem" - the very ecosystem that would be taken away from them.
- And neither will EU consumers keep buying Apple's products out of patriotism/for their American origin over, say, Korean or Taiwanese products (though Chinese products may be seen somewhat more critically).