Apple rejected the "design by committee" approach that had yielded the Motorola ROKR E1, a largely unsuccessful "iTunes phone" made in collaboration with Motorola. Among other deficiencies, the ROKR E1's firmware limited storage to only 100 iTunes songs to avoid competing with Apple's iPod nano. Cingular gave Apple the liberty to develop the iPhone's hardware and software in-house, a rare practice at the time, and paid Apple a fraction of its monthly service revenue (until the iPhone 3G), in exchange for four years of exclusive U.S. sales, until 2011.

The iPhone was the first mobile phone with multi-touch technology. Since the iPhone's launch, it gained larger screen sizes, video-recording, waterproofing, and many accessibility features. Up to iPhone 8 and 8 Plus, iPhones had a single button on the front panel with the Touch ID fingerprint sensor. Since iPhone X, iPhone models have switched to a nearly bezel-less front screen design with Face ID facial recognition, and app switching activated by gestures. Touch ID is still used for the budget iPhone SE series.
Why was the iPhone such a successful product?
The iPhone did away with physical keyboards and instead introduced a multi-touch screen which didn't require a stylus. The iPhone software, iOS, was developed to take advantage of all hardware and design capabilities of the phone, including the touchscreen. Each application presented its customized input options on the touch screen. In addition, the iOS was flexible and expandable through the App Store, giving the iPhone  user a wide choice of third-party apps which were not known before. iPhone hardware quality was also a nice surprise to the users.