At first, the iPhone was not going to be a smartphone. Steve Jobs actually told his engineers to explore the idea of touchscreen and tablets. Because there were no touchscreen gadgets at the moment. Later, the engineers came with some prototype to Steve Jobs of their touchscreen tablet. However, he liked the design and told the engineers to make a smartphone instead. Because at that time, there were no tablets in the market, and Steve Jobs thought that a new type of device might not be successful. However, later, they obviously made the iPad.
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