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.
You are assuming that the change was because of the iPhone and not the availability of touchscreens. In 2006 touchscreens were not even on the horizon as a feasible component due to technological limitations and cost. They existed but were not that great. By the end of 2007, the new touchscreen technologies changed them into a must have feature.
I admit to some bias. But you can’t dismiss alternate reasons for the changes in Android as you weren’t in the meetings.