I actually started on the tablet first. I had this idea of being able to get rid of the keyboard, type on a multitouch glass display. And I asked our folks, could we come up with a multitouch display? that I could rest my hands on, and actually type on. And about six months later, they called me in and showed me this prototype display. And it was amazing. This is in the early 2000s. And I gave it to one of our other, really brilliant UI folks, and he called me back a few weeks later and he had inertial scrolling working, and a few other things. Now we were thinking about building a phone at that time, and when I saw the rubber band, inertial scrolling and a few of the other things, I thought My God, we could build a phone out of this. And I put the tablet project on the shelf, because the phone was more important. And we took the next several years, and did the iPhone.

Steve Jobs at the D8 Conference, 1 June 2010

Throughout 2009, even before Steve Jobs came back from his medical leave of absence, the Apple rumor mill