I couldn't disagree more. Sure looking back at what we have today it is easy to laugh at it but it was literally the only product of its kind for perhaps the first 9 months of its life. It delivered on pretty much everything IMHO. It was reliable and it performed well. It really did replace an iPod, phone and PDA with one device.
Honestly the only thing it lacked was copy and paste which I agree was dumb but never did I think it was "really bad" because of this omission.
People can rag on Apple for a lot of stuff but man they really killed it with completely new gen 1 device. Not even the iPod was as good a gen 1 device as it lacked PC compatibility, a physical wheel that could/would break, etc.
It took at minimum a year for any other phone maker to bring something even 50% as good as the iPhone to the market and it took them several years to match (and exceed) it.
I'm not saying the first iPhone was perfect, obviously it was not. There is still not perfect smartphone. However it was a great product and I feel calling it "really bad" is very unjust.
In every category except user interface the first iPhone was behind the times. Devices like the Nokia N95 could do everything the iPhone could do, plus a lot more, with great (for the time!) performance.
But it's also a demonstration of why UI matters so much. I was using a Symbian smartphone and loved it but none of my friends did because it wasn't as intuitive as the dumb phones of the time. iPhones were as intuitive as a dumb phone and had a whole raft of new features... but only when compared to those dumb phones.
So ya, it's UI, but most other phones were physically incapable of translating touch events into 60fps graphics like the smooth scrolling lists or mobile Safari's zooming interface.
Phones that did have PowerVR or something equivalent at the time didn't have a 3D accelerated double buffered GUI baked into the OS like what Apple had already developed for OS X.
I have vivid memories of getting frustrated with all Symbian smartphones, the N95 included. It was clunky and horrible to work with.
To me that shows just how good the first iPhone, and iOS, was. Even though it had no third party apps and was missing some common features it was so much more enjoyable to use that it made up for those short comings.
I tried for years to find a good "smartphone" (for the time). Palm, BlackBerry, Sony Ericsson, etc. I tried using a dedicated PDA (Palm Tungsten, etc) with GPRS(!) over bluetooth to a reliable phone (Nokia 6310i) and all that but it was still a horrible experience. Not because of the some what hacky ways you had to get things to work properly (that was a get it working and you were done one off) but because it never felt like good to actually use. Inputting data was awkward with a stylus, the UIs were poorly designed with no real thought put into users workflow for common tasks. Switching between apps was slow and you lose context or worse would lose what you had already input!
Then one day I had an iPhone in my hand and it did almost everything I wanted. It had a really good (for the time) mobile web experience, years ahead of any other platform. A great audio player with their iPod platform. The best YouTube and mobile video experience out there. A maps app you could actually use without wanting smart the phone. A solid email, calendar and contacts package.
Adapting to the on screen keyboard is easy for me, sure it felt different but I could never relate to people who kept talking about how they could never give up their BlackBerry with its "proper" keyboard. I hated those tiny physical keyboards. From sending my first SMS on an iPhone I knew I never wanted to use a phone with actual buttons again.
So yes the user experience was incredible on iOS compared to everything else before it however I stand by my reply that OP is being unfair to say it was "very bad but with a good user interface" because to me, and I am confident many others, that user interface is what defined the iPhone as being so good. Every other phone was instantly horrible to me because they didn't have such a good user experience. It didn't matter if some other phone had an hour long battery life or apps or a better camera or copy and paste. Every other phone had a garbage user experience which made it a worse phone.
I still think I'd rather zoom into a desktop page than deal with responsive designs, personally.
Up until that point, browsing on a mobile device was either horribly limited or various kinds of impossible.
The iPhone showed what was possible, and legions of people started to take mobile devices more seriously as full-fledged compute devices.
The security problems would trump most other considerations for my for a modern era smartphone of that vintage.
Though most of the stock apps on it don't work anymore, it's fine as an actual telephone, address book, very basic camera, and a few other things. A lot of the apps on it are no longer available, and since the App Store app is so slow as to be unusable, they don't get removed.
Safari works, but most sites look like they've had their CSS disabled. So it's kind of like WAP days.
It's a good phone for banging around with in uncertain areas, or where you need a phone that you don't mind getting wrecked.
In my opinion, the form factor is still unsurpassed. And it feels good in the hand -- weighty and assuring, but small enough to not get in the way.
The thing I use it for most, though, is the music player. Somehow it sounds better than the newer iPhones. But then, I also think the Shuffles sound better than the newer iPhones.
It's not free, which I understand, but it's also not nearly as likely to be immediately exploited by some of the various problems older phones have had (SMS hacks, browser exploit hacks, etc).
That's why I still use my trusty 1080p LCD TV and 1080p AV receiver. They were less than $85 total a couple of years ago second hand, and do exactly what they need to do with a cheap HTPC hooked up to them.
Also, the Blackberry was actually useful as a phone. IIRC the iPhones could barely make phone calls until the iPhone 4.
I used mine from a couple months after release until the 4S came out and have no experience supporting that - it was equivalent quality to any other phone I used during that period (pre-VoLTE). The main source of problems was AT&T's network but that affected all phones since it was do to them having massively underprovisioned their network.
(IIRC the iPhone issue was hypothesized to be related to an incorrect GSM power management implementation.)
I wouldn't be surprised if they tried to blame the phone hardware but given every other interaction with that company I would default to assuming someone got a bonus for “saving” money on network capacity and then had to play damage control for a couple of years. My previous phone only had sound quality as good as the iPhone because I had unlocked it and enabled the higher-bitrate standard GSM codecs which AT&T's default policy had disabled.
While not Dream-bad, the first iPhone was really bad, but with a better interface than every other phone. It didn't have an app store, so the interesting things were maps and a web browser, but with only 2.5G internet, they were mostly unusable.