Your Palm in the 90's had a 16 Mhz processor and 1 MB of memory. An iPhone has a 1 Ghz processor and 32 GB of memory. If that's not "much different" you have a strange understanding of scale. And that was only 15 years ago, not 50.
The internet connectivity and storage changes are utterly radical changes in terms of what they enable. That iPhone gives you Wikipedia and Britannica and Project Gutenberg and the Kindle bookstore and Spotify and the iTunes music catalog and Netflix, all right in your pocket. Most people seem not to notice, but this is one of the most radical changes in history.
My Palm had a graphic touchscreen and handwriting recognition. A decent organizer package, and a thriving market of 3rd party applications. I could use it to surf the web, do email, IRC, or remote control my TV.
The smartphones went a big way in usability and price department, but it's not any kind of qualitative difference.
This was the time when anyone expected VRML-based web and augumented reality just around the corner. If you told me back then about iPhone in 2010, I would have really struggled feigning surprize to mask the disappointment.
