All of the earlier smartphones had applications. I had a real player app and a better video recorder for my Symbian phone; blackberry, windows (CE), and palm phones all had apps too.
Mobile Safari was certainly a lot better than browsers on the other phones though. And a lack of carrier garbage and interference on updates was also nice.
They were not. Apple was selling a browser in a phone which was a new concept for normal customers.
Blackberries were a thing back then and the iPhone killed them because of this.