They were criticising it and bemoaning it. And there were arguably "better" products coming onto the scene.
Apple naikled every aspect though and sold it to the mass public. That is hard - but they had a foothold because of the Ipod market and years of experience in making "must have" products :)
I never said anything about transparency: I agree as it happens, secrecy IS one of Apple's biggest strengths.
Apple know what ticks customers boxes (as you say Itunes isnt the most perfect player in the world - but for many consumers it hits what they need perfectly).
Yes, don't we all have a short-term memory and forget that some people were criticizing and evaluating the v1 iPhone based on feature lists of other smartphones at the time (video, MMS, copy-and-paste). And the lack of 3G. Lack of multi-tasking (that's still WIP).
If Apple had not closed itself off and did it their way (ignoring the pundits talking about the missing features), the v1 iPhone might never have come out (or would have been delayed).
Maybe Apple is successful because it is not transparent. Because it understands that the consumer doesn't want complete control over their personal devices, but that the user wants a good experience. iTunes isn't perfect but it lets people buy music and go off on a run and listen to that music. Do you really think the average iPhone consumer cares that Cocoa is behind the scenes?
You can't compare Apple with any other company. They are unique. Yes, they have their flaws but no one company or product is perfect.
Apple is not just opaque from the outside:
“I was at the iPod launch,” said Edward Eigerman, who spent four years as a systems engineer at Apple and now runs his own technology consulting firm. “No one that I worked with saw that coming.”