Ten years ago today, Steve Jobs presented the iPhone at the Macworld Expo in San Francisco. As with many Apple hits, this was not something the company invented; the company perfected the early smartphones that were available at the time. With some serious limitations – only 4 GB storage, and only available with a contract from AT&T in the US – the iPhone quickly found its market, selling one million units in just over two months. Initially very expensive at $599, Apple dropped the price shortly afterwards to $399, and issued store credits to initial purchasers for the difference.
The original had other limitations: you could not copy and paste text, it could not connect to 3G networks, and, as Gizmodo pointed out, it couldn’t do lots of things that even cheap phones could do at the time:
The real elephant in the room is the fact that I just spent $600 on my iPhone and it can’t do some crucial functions that even $50 handsets can. I’m talking about MMS. Video recording. Custom ringtones. Mass storage. Fully functioning Bluetooth with stereo audio streaming. Voice dialing when you’re using a car kit. Sending contact info to other people. Instant friggin’ messenging. Sending an SMS to more than one recipient at a time.
Well, Apple solved most of those problems, and the iPhone is now a kitchen sink. It does pretty much everything you’d want, and many things you don’t want.
But ten years later, after a meteoric ride that arguably changed the telecom industry, the iPhone is on its way down. Sales have started to slide, as users have realized that it’s not so magical any more; you can do almost everything the iPhone can do with a $100 Android phone. Apple is struggling to keep the shine on the iPhone, but merely adding a better camera – one that can blur the background in photos – is not enough.
The smartphone has become commodified, and, just as the iPod’s sales started dropping at around the ten-year point – though partly because of the iPhone cannibalizing the iPod’s market – the iPhone is no longer such a big deal. Your first iPhone was like your first kiss; but after you’ve had a few of them, the thrill is gone. You see the warts: the problems syncing music, connection issues, unreliable software, and more. You realize that you’ve just spent, say, $800 on a phone that you’ll probably keep for two years. Together with your monthly contract, that’s a lot of money.
To be fair, we now have pocket computers that can do a great deal of useful tasks. Calling it a “phone” doesn’t even make sense any more. For most people, making phone calls is one of the least used features of the device. It’s your calendar, contact list, GPS, map, shopping portal, music and video player, and much more.
In ten years, Apple went from a computer company that makes phones to a phone company that makes computers. As iPhone sales slide, will Apple be able to keep the device attractive? Sure, sales haven’t gone off a cliff yet; the slide will be slow, as Apple struggles against the competition. The company knows that if it starts competing on price, it will lead to a race to the bottom, but dropping the cost of the iPhone will be the only way to maintain sales. Pocket computers now do pretty much all they can; there aren’t many new features that can be added to this device. Services are the next battleground, and Apple needs to shore up its cloud offerings, making them reliable, affordable, and useful.
But for now, let’s just celebrate these ten years that saw a true revolution in portable computing.