The iPhone 4 focused on looks — and how! It’s a shame our first encounter with it was the infamous lost-in-a-bar unit, because the 4 really was an incredible jump in both quality of design and technology. It would have been exciting to have it revealed with Jobs’s showmanship.
At any rate, the most lasting improvement was, of course, the Retina screen. I certainly remember the first time I saw one in person, and it was also the first time I was actually tempted (as a die-hard Android user) to switch. The Retina screen allowed for vastly improved type and interfaces, and made games and apps far more compelling. Until the competition caught up… there really was no competition.
Now we all consider high-DPI screens standard, but at the time, the clarity provided by the iPhone 4 was remarkable — and marketable.
Honorable mention: The design of the phone itself is, I think, the best thing Apple has ever done. They refined it later, but the 4 represented the biggest gap in quality between previous iterations and competing devices that I can remember.