The average user was spending a very modest amount to be able to call and send text messages. Little portable multi function computers already cost hundreds of dollars.

Iphone helped clarify what a good interface looked like while prices came down and performance went up positioning themselves well as a product category that was already a thing became mainstream.

Laptops aren't a new category and the majority will continue to buy something other than apple in large part because of the price.

> The average user was spending peanuts on phone before iPhone.

The iPhone was mid-range at launch, $499 versus $730 for a contemporary smartphone like the N95

This was not what it felt like when it debuted.

Blackberry was the competing “smart” phone [1] and the newest releases were we under half the price of iPhone w the same 2-year discount.

I had the blackberry curve myself at that time and iPhone seemed way high-priced.

[1] https://techcrunch.com/2007/07/25/iphone-v-blackberry-side-b...

Guess it depends on the region. Here in Sweden I saw a few N95s and of Sony Ericsson and Nokia feature phones. Not a single Blackberry in sight, before or after.

The way I remember it the iphone-with-2-year-contract price was very similar to the buy-outright price for other phones. Are you definitely comparing the same contracts?

But most users were on feature phones at the time. The iPhone 1 was expensive.