From a 2006 (pre-iPhone) Android specification document:
Touchscreens will not be supported: the Product was designed with the presence of discrete physical buttons as an assumption.
However, there is nothing fundamental in the Product's architecture that prevents the support of touchscreens in the future.
The same document, but a few versions later, from 2007 (post-iPhone):
A touchscreen for finger-based navigation - including multi-touch capabilites - is required.
The impact of the iPhone on Android in two documents. Google knew the iPhone would change the market, while Microsoft, Nokia, and BlackBerry did not. That's why Android is now the most popular smartphone platform, while the mentioned three are essentially irrelevant.