Lev Grossman's story in Time describes how the iPhone germinated in a project to develop a tablet PC:
The iPhone developed the way a lot of cool things do: with a false start. A few years ago Jobs noticed how many development dollars were being spent—particularly in the greater Seattle metropolitan area—on what are called tablet PCs: flat, portable computers that work with a touchscreen instead of a mouse and keyboard. Jobs, being Jobs, figured he could do better, so he had Apple engineers noodle around with a tablet PC. When they showed him the touchscreen they came up with, he got excited. So excited he forgot all about tablet computers.
Now that the touch screen technology has been perfected, patented and proven to work on a 3.5-inch, 160-pixel-per-inch screen, it's logical that one of Steve Jobs' next acts with be a series of laptop-sized Mac tablets that take advantage of all the R&D on the iPhone and the Mac OS.
After Jobs' keynote, I spoke briefly with Alan Kay, who more than 30 years ago came up with the idea of the Dynabook, which had the specs of a laptop/tablet computer. He also worked at Apple in the 1980s in the Advanced Development Group.
I asked Kay if he liked the iPhone. He responded by pulling out a black covered 6x8-inch paper notebook and said that he would like it to be that size.
It looks like Kay's vision of the Dynabook will finally come to fruition. Given the preference of graphics-oriented users for the Macintosh platform, a Mac tablet would be sure bet to bring the tablet concept mainstream, which Microsoft has been trying to do for years without much success.
Kay is also famous for saying, "The best way to predict the future is to invent it."