You really have never read any tech stories, have you?
There's a whole deal around calling things 1.0, 2.0 and 3.0 products. Unless you're brave, people will advise you to stay away from 1.0 products. The first iPhone lacked a lot of features, didn't it? Now it's pretty stacked at 3.0.
A LOT of tech instances have shown companies hitting a sweet spot with the third iteration of a product. Almost nobody has ever seen Windows 1.0 or 2.0, but EVERYBODY (who is old enough) has seen Windows 3.0 -- mainly 3.1. Go look at car reviews. When a new model is introduced, the reviews seem to tick way up in the third year.
So basically Apple taking three tries to get it "right" is par for the course. Still, the first version of the iPhone was pretty darn good despite its problems.