The iPhone is not an innovation per se - a lot of other smart devices already do what it does (c'mon, claiming "vibrating alerts" as innovative is stretching a bit).
But the iPhone is a completely new concept in terms of mobility. Using the Safari browser as the platform to distribute and run applications, is one of the best moves I've seen.
Whoever ever tried Pocket Internet Explorer knows that Safari can be only better. But Opera for Mobile is not a bad competitor. They just don't have the traction in the market to pull this off.
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