Why Iphone?

Some reasons I can think of:

1. First entrant to this generation of mobile phones (with good WebKit based browsers, app stores, decent cameras, 3G, etc.) so it had a first mover advantage.
2. Really solid construction.  The phone feels really good in your hand.  This actually makes a big difference for me and I think it probably does for other people.  Also, the slim form factor fits easily into a pocket and doesn't require a weird holster or case.
3. Great variety of applications available ("There's an app for that").  Related to (1).
4. Works well with iTunes which many people use to manage their music, so it's a convenient way to have a portable music player with your phone.
5. Pretty reasonably priced (with a long term contract).
6. Everyone else has them, and people tend to copy each other.
7. Really well marketed.  Apple has done a consistently good job designing their products and the way they are presented as well.
8. Better software than competitor devices, particularly the OS (though the built-in mail and maps and calendar applications are actually just so-so.)
9. Looks really cool.  Related to (2).
10. iPhone is a standard.  Other phone manufacturers seem to have a ton of radically different devices, but there's only one iPhone per generation--and even across generations they aren't very different--so it's easy to make a choice as a consumer.  This also makes life easier for app developers since they have fewer variations to worry about.
11. It's easy to try out iPhones.  Many people have them so it's easy to borrow one to try it.  It's also easy to find them in stores and Apple Stores in particular make it really easy to play with the phone if you are thinking about buying it.
12. Lots of publicity around the iPhone.  Related to (1), (6), and (7)