Nobody thought Apple making a phone was odd. Even prior to the announcement of the original iPhone and prior to any rumors about actually making a phone, the internet was full of amateur 3D mockups of what an "iPhone" could be like, including looking like an iPod with a click-wheel. They had conquered the personal media player market, and now people wanted a phone with the design of an iPod to carry less stuff in their pockets.
Everyone forgets that the nerds had windows ce phones before Apple hit the market.
It was the 3GS and 3rd party dev arcade games that converted me.
Apples challenge now is how to convince people who hate them to go to work for them.
I was one of those nerds! I equally loved it and loathed it. Some very cool software available, but as a cellphone-like experience, it was neither one thing nor the other. Most of the time I had a feature-phone as a daily-driver alongside the clunky early Windows stuff. Wasn't a bad compromise as I didn't want or need the power of Pocket PC/Windows Mobile 24/7, but it was however a fairly expensive one!
People also forget that using a stylus with a touchscreen made it a pretty crappy phone, and they weren't ergonomic to hold up to your face with a lot of the larger PDA-like ones. The Windows devices with sliding keyboards were pretty decent as a compromise in terms of size and features though. But boy were they expensive in the UK at the time as they were generally imports from the USA.
I loved my htc with the slide out keyboard! Sure, it would reboot occasionally when you slid the keyboard out and it took 45 minutes to send an email on edge but that was back to the future stuff back then.
