I’d say the UI was the biggest shakeup

I'd say the biggest shakeup was the features Jobs pushed hard in the keynote.

1. It was a cellphone. A good cell phone. Everyone had a cell phone and nearly everyone hated them. The blackberry was decent if all you did was send text messages and make phone calls, but it was rubbish at everything else. PocketPC and Symbian and other flip phones were even worse, though each specific model had a different set of feature trade offs (did you ever try writing an email on a small PocketPC device? You had to press tiny keys with an equally tiny stylus and text was almost impossible to read (or alternatively so large that you couldn't fit enough text. Larger ones were a good experience but they were way too big for most people. Even the iPhone was considered huge at the time (it was much bigger than a blackberry for example).

2. It was an iPod. Everyone (who could afford one) owned an iPod and it sucked having two gadgets in their pocket all day and keeping two gadgets charged. That was the feature that made the iPhone a "must have" product. Combining your phone and music device was a massive improvement and an obvious one even if you weren't sure about the other stuff. Other phones could play music by then, but they were all still really terrible. I could only fit a single album on my Symbian phone and it took hours of stuffing around and reading manuals and installing buggy software to figure out how to load MP3s onto the device. Yuck.

3. It was able to browse the internet. The real, full internet. Everyone working a desk job was used to doing that all day every day, but now it was possible to do it away from your desk. That was a huge deal and I think by far the most meaningful feature of the iPhone... except it was a product nobody had ever used before, so it couldn't be the only headline feature.