The big innovation was often the willingness to charge more. When Apple came out with the original iphone it was $600 at a time when high-end phones were $200. (And it couldn't even run programs! What I really don't get is why Sharp/HP/etc. never made a PocketPC that had phone functionality built in).
Many people thought the market that would pay $600 for a phone didn't exist. I guess that's part of the power of being a recognized luxury brand - you can sell a product that's twice the cost of the alternatives, but people will be ok with buying it, because they'll have enough faith in you to deliver something that's worth that much.
I am sorry but you're wrong. Nokia's high-end phones were costing similar money: " The launch price of the N95 was around €550 (about US$730, GB£370)."
https://en.wikipedia.org/wiki/Nokia_N95
> There were many PocketPC-based smartphones (PDA-phones), even from HP and Sharp.
Really? I remember spending quite a while comparing specs before getting an ASUS A730W. I remember a few interesting-sounding Zauruses (Zaurodes?) that were never released in the west, but nothing I could actually buy.
> Also, many inexpensive phones could run third-party apps, albeit crappy Java ME-based.
True - but they really were crappy. Whereas my PDA ran real programs - it was relatively easy to port and build existing C++ code (the UI toolkit was different, but all UI toolkits were different in those days).
HP had some iPAQ smartphones and Google tells me Sharp also produced something (for Japanese market). But yes, many manufacturers didn't make their devices available worldwide, so it depends on market. In Russia we had lots of Qtek/HTC devices.
I had one of the "things sharp produced" that was actually released in the west. If it had a cellular modem in it and they still made it I would have never bought a smartphone.
Many people thought the market that would pay $600 for a phone didn't exist. I guess that's part of the power of being a recognized luxury brand - you can sell a product that's twice the cost of the alternatives, but people will be ok with buying it, because they'll have enough faith in you to deliver something that's worth that much.