6.1 Billion

Stats confirm the widespread adoption of smartphones because according to the Mobility report released by Ericsson, by 2020, there will be 6.1 billion smartphone users worldwide. What made this possible?

While there’s tremendous anticipation around the smartphone disruption in the future, there’s no one but Apple, who is responsible for beginning a revolution that has changed our lives completely.

With the iPhone completing 10 years, this is the right time to dig a little deep into the role of iPhone in shaping Apple as world’s most popular brand and company and its impact on our daily lives.
6B

6.1 Billion smartphone users worldwide

The Beginning

Scott Forstall, former Vice President of iOS software, once revealed, "In 2003, we had built all these great Macs and laptops and we started asking ourselves what comes next. One thought we settled on was a tablet. We settled pretty quickly if we could investigate doing that with a touch screen, so we started investigating and building prototypes."

This was because Steve Jobs had an idea about a unique multi touch display built on glass. Hence, after a lot of research for developing a product with an exceptional feature set, the engineers came up with a glass display that had multi touch functionality.

Steve Jobs recollected, “I gave it to one of our really brilliant UI guys. He then got inertial scrolling working and some other things, and I thought, 'my god, we can build a phone with this' and we put the tablet aside, and we went to work on the phone."

Little did we know that this idea would turn out to be the beginning of the greatest revolution in the smartphone history during the fall of 2004 – the birth of iPhone three years later!

Big Day

The iPhone Mission

Apple by nature is popular in keeping a low profile while working on something that’s truly innovative. The iPhone was one of the most secretive projects of Apple. The iPhone was codenamed as ‘M68’, and was referred to as Project Purple.

Steve Jobs wanted Scott Forstall to choose the best engineers of Apple (but none from outside the company) to form an exclusive team for iPhone. Scott wasn’t even allowed to share any details with them except that they’d have to "work hard, give up nights, work weekends for years." Neither the hardware team knew about the software nor the software team about the hardware.

The original iPhone team worked in a highly secured campus popularly known as the ‘purple dorm’ that had stringent security measures. The foremost rule that the team had to follow in the ‘purple dorm’ was to not talk about the Purple project.

Everything about the iPhone project was quite legendary as the team used more than 50 mockup designs just for a single button- which shows how obsessed they were with the tiniest detail. This attention to detail has helped Apple to rise above all other brands and become the most trusted company in the world.

"Work hard, give up nights, work weekends for years."

"It was the best demo any of us had ever seen.”

The Big Day

After two and a half years that involved sleepless nights and mostly just work, the iPhone was slowly getting ready for the big unveil. But still, the team wasn’t happy because the prototype had a lot of issues with the battery life, call drops, corrupt apps and data which made Steve Jobs quite unhappy. Steve even proclaimed “We don’t have a product, yet.”

Despite the team’s efforts to rectify all the necessary glitches, Jobs had to get ready to for the big day with an incomplete prototype.

It was January 9th, 2007.

San Francisco’s Moscone Center was packed with a crowd that was eagerly waiting to hear from one of the greatest visionaries of all time, Steve Jobs, the then CEO of Apple. The development team bit their lips tight and prayed that the demonstration wouldn’t be a disaster.

When Steve Jobs began, “This is the day I have been looking forward to for two and a half years,” and later began to exhibit each feature, the team could only hope for the best.

“When the finale came", Senior radio engineer Andy Grignon said, "and it worked along with everything before it, we all just drained the flask. It was the best demo any of us had ever seen.” The team had been taking shots from a flask as each feature worked well.

Remembering The First iPhone

The first iPhone device was a 3.5-inch LCD screen, a quad-band 2G EDGE data radio, 802.11b.g Wi-Fi, Bluetooth 2.0 EDR, and a 2 megapixel camera.

It was powered by an ARM-based 1176JZ(F)-S processor and Power VR MBX Lite 3D graphics chip, manufactured by Samsung, with an 1400 mAh battery, and had 128MB of on-board RAM. Two NAND Flash-based storage tiers were available at launch: 4GB or 8GB.

Steve Jobs always believed that only a revolutionary product could change the face of Apple. The iPhone has proved to be a “revolutionary and a magical product”.

An Era - Ten Years Of iPhone

When Steve Jobs announced iPhone for the first time, the then Chief executive of Microsoft, Steve Ballmer commented, “There’s no chance that iPhone is going to get any significant market share.”

Even the press mocked. Mike Lazarid is, former CEO of RIM (now BlackBerry): “Talk -- all I'm [hearing] is talk about [the iPhone's chances in Enterprise]. I think it's important that we put this thing in perspective. [...] Apple's design-centric approach [will] ultimately limit its appeal by sacrificing needed enterprise functionality. I think over-focus on one blinds you to the value of the other. [...] Apple's approach produced devices that inevitably sacrificed advanced features for aesthetics.”

But Tony Fadell, popularly known as the ‘Godfather of iPod’ recalls, "We also laughed at Blackberry. Whenever I create a new product , and I learned this with Steve [Jobs], if the incumbents laugh at you and the press laugh at you, you go, 'we’ve hit a nerve'.”

And he was right.

In 2007, 1.4 million iPhones were sold. Things changed when the iPhone’s market share tripled in 2008- owning 12.9% of the world’s smartphone market. And from then on, iPhone evolved to shape Apple in terms of brand value by generating nearly 60% of revenue for the company.

With the huge success of iPhone, Apple decided to drop the prices of 8GB iPhone to $399 in the same year, driving sales even higher.

"If the incumbents laugh at you and the press laugh at you, you go, 'we’ve hit a nerve'.”

The End Of A Legend

iPhone’s market value kept soaring high with each passing year. In 2011, the day after the release of iPhone 4S, Apple encountered its biggest loss of all time – the demise of Founder and icon, Steve Jobs. But this did not stop iPhone’s increasing demand because after Tim Cook replaced Jobs the same year, 72.29 million sales were recorded. Every iPhone launch has seen record sales so far.

Industry

Impact On Other Major Competitors

Ever since iPhone was introduced, the then market leaders Microsoft, Nokia and BlackBerry began to decline and lose their market share on smartphones. Apple’s entry into the smartphone market created a huge impact on the existing mobile phone companies and those who came in later because Apple had already set high standards that resulted in an aggressive competition.

During the initial days, top companies like Samsung and Google were willing to spend nearly $500 million to make an impression and become worthy competitors. And Samsung succeeded with the thumb rule: to offer a product that’s ‘nearly’ like the bestselling product with reduced price.

In 2011, Chinese Android smartphone makers, Xiaomi, Lenovo, Huawei etc began to rise to the top following Samsung’s example- thereby becoming potential rivals for Apple in the eastern market.

Back in 2007, the smartphone leaders were Nokia and BlackBerry holding market shares of 42.4% and 15.9% respectively. By 2013, Nokia’s market share was only 3%-Microsoft had bought Nokia for $7.6 billion and offloaded the mobile phone brand. Now WMD is making Android phones under the Nokia brand. Similarly, BlackBerry sales declined drastically and in 2016, they decided to exit the smartphone industry. RIM, the company behind the Blackberry brand, licensed the brand to TCL to build Android phones as well. Other competitors like Palm also faced similar fates.

The iPhone has simultaneously led to more and more users gain access to affordable smartphones with App stores and great features, while killing off the other major players. Even the companies with high market share and sales cannot match the iPhone’s figures and margin.

"Back in 2007, the smartphone leaders were Nokia and BlackBerry holding market shares of 42.4% and 15.9% respectively. By 2013, Nokia’s market share was only 3%"

"There were more than 10 million app downloads on the first weekend of the App Store."

Mobile Apps – The Trump Card

One of the main reasons why these previous tech giants lost to Apple was that they couldn’t match a critical element that was slowly becoming an important element in the smartphone ecosystem – mobile apps. When Apple introduced the App store in 2008, it brought a whole new dimension to smartphones. The App store was launched with 552 apps and in the following years, the App Store witnessed a huge spike in terms of growth and revenue. There were more than 10 million app downloads on the first weekend of the App Store. In less than four months, App Store had more than 100 million downloads with Facebook being the most downloaded app and by 2012 the count surpassed twenty five billion. The growth of App Store was exemplary extending to more than 153 countries and by the end of 2103, there was an app for everything which made iPhones indispensable and increased Apple’s app revenue to nearly $50 billion in 2016.

The App store triggered the beginning of a brand new industry - mobile apps. The mobile app industry quickly became the most adopted technology where companies could easily increase customer engagement and interaction with their brand and strategize their goals better than through their website.

For Example

Mobile only Apps like Instagram and Snapchat helps you to click pictures, videos and instantly share them on other social media platforms like Facebook, Twitter and more. Similarly, the App store was flooding with apps for every purpose like instant messaging, streaming music, games, on demand needs, news, social media, dating, fitness, and the list goes on. Ultimately, mobile apps became the very purpose of owning a smartphone.

When Jobs announced that Apple would provide a platform where developers could build various kinds of apps and sell them, the demand for iOS developers skyrocketed. The job market for mobile app developers grew exponentially and is expected to create close to 300,000 positions by 2020. As of 2016, an iOS app developer is paid approximately $1,05,000 and a Lead Mobile Application Developer earns more than $1,38,000 per annum. Careers in mobile app development will continue to stay lucrative in the coming years, thanks to Apple’s market share and reach.

The explosion of mobile technology not only paved way for the boom of mobile app development companies but also the accessory makers that are predicted to grow to $101 billion in 2020.

Apple’s app approval process is quite stringent because of its high regards to security and prevention of inappropriate content. Apple has a set of guidelines for developers which can be amended anytime it wishes. Earlier, the developers had to wait for weeks together to hear from Apple. But since 2016, due to continuous feedback from developers, the App Store will take only two days for the approval process-which has come as a huge relief to the developers. In December 2016, the App Store earned $3 billion in app purchases with the developers earning more than $60 billion.

iPhone - More Of A Social Identity

According to a survey, 78% of iPhone users “couldn’t imagine having a different type of phone” and it has become a social identity to own an iPhone. You can’t think of anything but Apple when it comes to having a smartphone with an exceptional design, reliable, unsurpassable quality, the powerful iOS, and all other unique smart features. With iPhone, Apple could achieve a high end level of sophistication among its users because Apple has already established its brand value.

One of the most interesting answers I’ve come across about owing an iPhone, “An iPhone is an iPhone. I don’t care how original it’s going to be.” This reflects how Apple has earned phenomenal customer loyalty and established astounding credibility among its tech savvy customers.

In 2011, Apple’s brand value increased by 859% with 5X increase in market capitalization. In less than three years, their brand value witnessed a huge spike of 1500% increase leaving behind Microsoft and Google and becoming $700 billion worth company.

Read Our Inforgraphic about 10 years of iPhone >

Major Industry Influences

The iPhone has undoubtedly proven its supremacy in the smartphone market. But at the same it has extended its support and influence to several other industries like Music, Camera, Healthcare, Games, IoT, AI and more.

Music

Although the iPod isn’t the first MP3 player, it eventually gained traction among the music lovers because of its extreme simplicity in loading music. Apple launched the iTunes Music Store with 200,000 songs at $0.99 each. When iPhone was launched in 2007, iTunes was synced with the device, which was a major boost to its sales. This further increased the popularity of iTunes to become the largest online music store where users could buy or rent movies, TV shows, eBooks and more.

That was not all.

When Apple caught the trend of live music streaming, in 2014, Apple acquired Beats for $3 billion and launched Apple Music in 2015.Such a huge acquisition shows what branding means to Apple and to what extent it can go to get the best. Apple knows it’s easier to connect with the die-hard music lovers as pop stars like Lady Gaga have their own Beats headphones. With this, Apple bolstered its music service, emerging as a tough competitor for Spotify.

Healthcare

2014 was a pioneer year as Apple announced iOS 8, one of the major OS releases that include an exclusive API for healthcare apps known as HealthKit. Through HealthKit, users could easily monitor and access their health and fitness data. The Health app helps you consolidate all your health data from your iPhone making your lives much simpler. It also brought about a common platform for both patients and physicians that helped them interact and engage better.

This was followed by ResearchKit and CareKit – two frameworks that turned iPhones into a complete medical kit. ResearchKit helped medical researchers share and gather medical information to boost their research and studies, whereas the CareKit allowed doctors to closely monitor patients and help them manage their post-surgical conditions.

No wonder that the iPhone has turned out to be the most favorite smartphone for almost 80% of physicians!

Read: The best iOS 9 features for healthcare industry >

Apple’s healthcare interests resulted in several healthcare partnerships with leaders like Mayo Clinic, Epic, John Hopkins and Nike. Partnership with IBM was a major leap where IBM’s Watson Health will harness all data from Health apps through ResearchKit and HealthKit. This further shows how Apple is serious about building an ecosystem around the iPhone, making it more and more ingrained in everyone’s lives.

Apple’s Other Interests

‘Internet Of Things’

In the end, the sole purpose of any technological experimentation is to offer an ecosystem that will empower connectivity across the globe in order to simplify lives. One such aspect is the Internet of Things (IoT). The increased adoption of smartphones enabled a source to connect multiple devices across a platform. In order to leverage this technology, Apple announced its new SDK called HomeKit during the release of iOS 8 event which came as a huge player to the home automation sector. The latest iOS release allows you to control devices like thermostats, plugs, switches, locks and helping you build a smart home.

Automobile

There are not many divisions where Apple has failed to create an impact. Apple is rumored to have big plans in the automobile industry through its Apple Car or iCar under the codename ‘Project Titan.’ This self-driving car is scheduled for launch around 2020 which will be controlled by a portable device like iPhone.

2017 – How Apple Never Fails To Amaze Us

As mentioned earlier, the iPhone covers more than 60% of Apple’s revenue and it never ceased build market share until Q2 of 2016. This was the first time in a decade that Apple’s revenue declined by 16% from $58 billion to $50 billion.

Although Apple shared its highest profit in Q4 2015 ($18.4 billion), the following quarters did not match up to Apple’s regular grades. But Apple made a huge comeback through the iPhone 7 and 7 Plus sales. It recorded $17.8 billion in profit and a revenue of $78.4 billion which upped its stock value by 2%- Apple terms it as an “all time record”. The iPhone unit sales is also up by 5% (78.29 million sales recorded), despite many critics for the latest model.

Thus, the 10 years of Apple’s journey with iPhone shows us the impact of iPhone in all areas of Apple’s development. Throughout the past decade, Apple has showed us that innovative technology can impact our lives in a way we could never imagine. And it will continue to impress us with greater innovations and accelerate the growth of smartphones.

And as always, we believe that “The best is yet to come!”

"Apple made a huge comeback through the iPhone 7 and 7 Plus sales. It recorded $17.8 billion in profit and a revenue of $78.4 billion”