There was a time, not that long ago, when Blackberry ruled the smartphone game. They built their system on the Enterprise - with high data compression and excellent business email features. It suited the carriers and big businesses perfectly. The BlackBerry devices are still today excellent devices for getting work done (as in email, calendar and contacts) because they can the do the job very well.
Into the market in 2007 comes Apple. They have a somewhat limited email client but their touch interface and web browser are best in class. People enjoy using the iPhone - despite the fact it is a sub-standard email experience. They can use it to get the job done but it’s not an enterprise device. As the years pass RIM add more features to their phones and a touch screen but their experience remains sub-par compared to the iPhone. That said, their email remained the best in the industry. The iPhone evolved further and more features and syncing made the iPhone Exchange compliant, with threaded messaging and many other good email, calendar and contacts features. Given a choice, all but the more serious email users would now take the iPhone over the BlackBerry.
Without trying to displace RIM and the BlackBerry directly, without taking the Microsoft approach with Netscape (copy every feature and offer a competing product for free) Apple have succeeded in taking market share away from RIM - despite the fact the BlackBerry provides more email features than the iPhone Mail client.
How did Apple do this?
They made the iPhone the product that more people enjoy using to get the job done. Just because a product can do the job, doesn’t make it the product people will buy.