On the surface, Jan. 9, 2017, might not seem like a particularly important date, but if you follow the story of Apple Inc. (NASDAQ:AAPL), this day is huge.
It was exactly a decade ago on this day that Steve Jobs took the stage to unveil the very first iPhone. We may take it for granted now, but this little device propelled Apple stock to lofty heights and earned investors untold billions of dollars.
Jan. 9, 2007
Apple put out a press release marking the iPhone’s 10th anniversary, noting Steve Jobs introduction of the new device as “a widescreen iPod with touch controls, a revolutionary mobile phone and a breakthrough internet communications device.”
Despite the excitement of its Jan. 9 introduction, the first iPhone didn’t exactly set the world on fire when it finally went on sale in June of that year. Early reviews weren’t happy about the idea of a sealed, non user-replaceable battery (consumers could easily swap out the dead batteries on other cell phones) and the new iPhone had trouble with slow Edge data service (a new iPhone 3G with faster connectivity wouldn’t be available until the following year).
The cost was also prohibitive for a consumer device at $599 — plus monthly carrier plan costs — on contract.
In the U.S., the new iPhone was an AT&T Inc. (NYSE:T) exclusive, further limiting the potential market. Then, in a controversial move, AAPL dropped the price of the entry-level 8GB model by $200, angering the early adopters. The company eventually relented and issued a store credit to those buyers.
Ultimately, though, the new iPhone was a hit, selling over 6 million units. On the day the iPhone turns 10, those numbers may seem insignificant — the iPhone 6 topped 10 million units on its first weekend of sales — but it was the start of something very big.
The New iPhone Upended the Mobile Phone Industry
It’s hard to understate just how big an impact the new iPhone had.
It wasn’t the first smartphone, but it was the first that appealed to consumers in a big way. The large (for the time) color display, touchscreen, user-friendly operating system, Wi-Fi and a built-in web browser hit at just the right time. The arrival of the App Store in 2008 sealed the deal.
Companies that couldn’t adjust to the new touchscreen world were left behind. Notable casualties of the smartphone revolution touched off by that new iPhone include BlackBerry Ltd (NASDAQ:BBRY) and Nokia Corp (ADR) (NYSE:NOK).
Obviously, both companies still exist today, but both were mobile leaders in 2007 that have been left struggling to remain relevant ever since.
The iPhone Has Changed in 10 Years. AAPL Has, Too.
Of course, Apple itself was changed as much as any other company, but in a better way (at least for investors). With the introduction of the iPhone in 2007, the company changed its name from Apple Computer to just plain Apple Inc.
That move was prescient. Today, the iPhone accounts for 60% of Apple’s revenue and in its last quarter, with sales down, AAPL still sold over 45 million units. With its stock propelled by massive, high-margin iPhone sales, Apple became the world’s most valuable company — a ranking it traded back and forth with Alphabet Inc (NASDAQ:GOOGL) multiple times over the past year.
Apple Looks to the iPhone 8
You can expect AAPL to continue making a big deal about the iPhone’s 10th anniversary through 2017. The company is coming into the year on a low note. iPhone sales are sliding, and it closed out 2016 with a cloud of negative PR over iPhone 6 battery issues and poor reception of its new MacBook Pro.
CEO Tim Cook even had his compensation cut as AAPL missed performance targets.
The company is looking to an all-new iPhone 8 to boost sales back to record levels. And you can bet it will leverage iPhone nostalgia at every step in an effort to bring back those days of line-ups camped outside Apple stores for days before a new release.
In the year the iPhone turns 10, Apple will be looking forward — but also counting on all of us to take a look back.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.