> Wasn't the first iPhone basically just an iPod with a sim card?

No, the iPods that were like iPhones (iPod Touch) were after the iPhone, not predecessors. The main iPod at the time of the iPhone introduction ("iPod Classic") had a small, non-touch screen in the top area of the face (except, most of the face taken up by the physical "click wheel" control, and a hard disk for storage, and other immediately pre-iPhone iPod's were basically scaled down versions of the same design (with Flash memory on, IIRC, the Nano and Shuffle, and no screen on the Shuffle.)