He's wrong, but eerily prophetic too -- all the reasons he says that the ipod was successful are the reasons that the iphone was successful (I do disagree with how important advertising was, though).

He just didn't realize, living in the moment, that all the existing smartphones were crap. Just as people pre-ipod did not realize that all the existing MP3 players were crap.

It's not until you see how much better something can be that the blinders can come off.