It changed the entire cell smart and feature phone industry. With one phone Apple introduced a phone with a desktop level browser that not only rendered pages as they are on the desktop it rendered them fast, something blackberry browser couldn't even do with its easier WAP rendering. Apple also introduced a touch interface that didn't require a stylus something nearly unheard of up until then, and the interfaces that didn't require stylus were bubbly, big, and simple. iPhone's UI is elegant, modern, and just as simple. Apple introduced a virtual keyboard that didn't involve poking at tiny keys with a stylus. Apple also introduced predictive text based on a virtual keyboard input, a virtual input that accurately guesses the word you mean to type.
Beyond the launch the App Store changed the market even further and was a genius move to get people investing money into iOS keeping a stronghold on their users. Because of this it's difficult to switch to other phone operating systems if they are reliant on several applications they will have to rebuy on the new OS. Even if it in reality would be a small price to pay it is quite the mental lock that will keep people using iOS for a long time to come.