When iOS 1.0 shipped with the first iPhone the operating system was very different than it is now. There was no app store, no location awareness, and no iTunes music store. It was a mobile OS in its infancy, and boy has it grown in the past 10 years.
It wasn't until September of 2007--four months after the iPhone's launch--that the first updates came in the form of iTunes, location awareness, and a customizable home screen. Those incremental differences brought a ton of added value to the iPhone that we now take for granted.