As an engineer, Apple was smart ... but that's Jobs (unlike Gates) ...
Apple does two things correctly ...
1. They know their customers, needs, functionally, etc...
2. They wait until the technology is right
Jobs is a huge reason for #2. Despite what people make think, Bill Gates is a moron of an engineer and Steve Jobs is rather brilliant engineer. Gates has almost run his company into the ground as a technical architect -- numerous times -- and Jobs has pulled Apple out-of-the-gutter far too many. Gates was born with a silver spoon, Jobs wasn't. Classic case of someone who had to earn their merits, and someone who just got lucky, and knew how to screw people over in their contracts (including screwing Apple very early on).
Why the iPhone is coming out now has more to do with the fusion of 3 integrated circuits into 1. That's how they are going to get 6 hours "talk time" out of the battery like it's a minimal microcontroller (like the iPod nano), while still making video and everything else look like it's a modern computer.
Jobs is just a great engineering project manager, hands down. He's right there, making the calls, making the shots, when they should be made! That's the difference between him and Gates. Gates tries to be 'hip, 'wit the la'est schtuff, like a boofing geek who, at the same does, really does not have an ounce of "technical ability" himself!
Jobs, to his credit, doesn't try to act like he's an uber geek or really uber schick either. But he's competent enough of both a technologist and a project manager to make him a genius at the helm of a company that fuses the best engineering technologies at the best time for them, into products that his customers actually want.
With Microsoft, you get the worst fusion of everything, from the original Xbox (oh don't get me started) to the Zune (can I please have it in the "retro" shit-brown please? -- OMFG! And once you look inside, it's shit of a design). And even Xbox 360 is a pretty shitty design (again, don't get me started -- ATI and IBM really helped them all they could), and the only reason they have some mindshare now was in that they best Sony to market (who stupidly waited on BluRay, for pure non-console reasons -- long story).
No, Jobs and Apple didn't invent the cell phone, MP3 player or anything else any more than they did the graphical user interface (GUI), Yes, it was us "timeshare system" geeks (most would attribute to "UNIX/BSD/Linux," but that's not entirely the full story) that invented the GUI, office suite and the browser (among other things, even the "skinned media player"). But they just knew when to enter the market with them and -- more importantly -- how to design them using the technology available at the right time as much as the marketing aspects. Microsoft uses marketing to force everyone to conform, although that's not working to against with Google.
But Google is just another Microsoft. Wait a decade and you'll know what I mean. The company and industry will have changed. But the same attitude is right there.