iPhone Among Best-Selling Products: How Did It Happen?
When Apple’s co-founder Steve Jobs announced the iPhone in 2007, he described it as a “revolutionary product” in the mobile phone category that he believed needed to be reinvented.
Fast forward almost two decades and 42 models later, the iPhone has become one of the most popular phones in the world. Apple has sold more than 2.3 billion units of the iPhone and has over 1.5 billion active users, according to a study conducted by Demand Curve and published by CNBC.
The original iPhone was released in June 2007 and was exclusively sold to AT&T for $499.
Jin Munster from Deep Water Asset said, “Investors were optimistic about the impact that the iPhone could have on Apple.”
He added, “The initial data released by AT&T was disappointing compared to the early days of sales. I remember speaking to investors after the first weekend, and the general feeling was that this product, to quote one of the investors, was ‘dead on arrival’.”
Disappointing First Year
Apple sold 1.4 million iPhone units in 2007, with 80% of sales occurring in the fourth quarter. In the same year, Nokia, the manufacturer of the famous Nokia 3310, sold 7.4 million mobile phones in the fourth quarter alone.
According to How Li-Su, a technology correspondent at CNBC, “Nokia was seen as unstoppable and unwilling to compete.”
Munster said, “The investment community considered this move by Apple an adventure in a difficult-to-penetrate market.”
Things started to change for Apple in 2008 when they launched the App Store, which helped stimulate a new wave of modern technology companies such as Uber and put Apple ahead of its competitors.
Munster said, “The App Store allowed your phone to do a lot more… It was the missing piece, that vision, and other phone manufacturers didn’t anticipate that.”
Apple’s iPhone unit sales increased in the years following the App Store launch, and the company achieved a significant milestone (selling over 50 million units) in 2011 with the iPhone 4S. The company sold 72 million units that year. By 2015, Apple was selling over 200 million iPhones annually.
Apple Store Changes the Equation
Mark Weber from the Computer History Museum said, “I don’t believe there’s any doubt that the iPhone set the standard that almost all phones have followed since then… The App Store was huge, and the Android system essentially followed this model with the Play Store.”
After a decade of iPhone launches, Apple became the first publicly traded U.S. company to reach a market value of a trillion dollars, and is now one of the most profitable companies in the world.
Recently, Apple surpassed one of its biggest competitors, Samsung, as a leading global smartphone company for the first time. According to data from the International Data Corporation, Apple holds just over 20% of the global market share, a position Samsung has maintained since 2010.
Munster noted that “there was a period from 2008 to 2015 where Apple had to worry about what Samsung was doing with Android… Its market share was already declining worldwide… But what Apple was adept at was building an ecosystem. I can’t imagine a scenario where Samsung could build a suite of products that would disrupt Apple’s ecosystem.”
The Future of Artificial Intelligence
In recent times, Apple has ventured into machine learning and artificial intelligence for iPhones, but companies like Microsoft and Google have embraced this technology more overtly.
Munster believes that “artificial intelligence will be crucial for humanity, and it will be a crucial advantage within iPhone devices.” He added, “Apple uses AI to make its products function better by organizing photos, aiding in email organization, and perhaps doing things related to text organization. But largely it’s that the iPhone doesn’t chase the prevailing AI trend.”
