It's not that Apple can do what others can't.
It's that Apple does what others don't.

The iPhone is upper-middle hardware, the way I score things. The only particularly impressive hardware feature is the multi-touch screen. But Apple designed that hardware to have exactly the features it would use -- no FM radios left without apps at launch, etc. They built software for that hardware, keeping the whole experience in mind, that would do what it does really, really slick. The downside, of course, is that they had to choose a very limited batch of functionality to make that functionality come out right. They exiled 3rd-party apps to the realm of hacks, so no one could ruin their slick interface. They put it in a box, and will gladly sell you one. If you are content with its feature set, you'll love it. It does what it does so doggone well!

Apple makes slick experiences.

Any other company could have done that -- the hardware's nothing especially special. The multi-touch screen was leading-edge, but anyone could have gotten those, if they were designing such a device. However, no other company did. Most tech-makers concentrate more on features and price, and way less on the finished experience.
Is the iPhone a better device than the N800/N810? Depends how you define better. I'd put the N810 ahead of the iPhone from a hardware perspective. The N800 is arguable, but clearly better in hardware/cost. They both also come out ahead in a feature-list smackdown. But neither of them will do what they do, or even an iPhone-sized subset of what they do, as downright slick as the iPhone does its limited repertoire of tricks.

Give me an N8x0 any day; I want to do everything. And I'll ignore the little bumps along the way, knowing I'd have no such bumps with an iPhone. And don't tell me the iPhone is better, and I won't tell you the tablet is better. Feel free to say it's slicker, more polished, easier to use. And I'll say mine can do more, has higher res, and is more of a laptop. We'll each think we're saying ours is better, but we'll each agree with (and not care about) the other's praises for his device. And the world will be a happy, shiny, agreeing-with-each-other place.