I can tell the age of a movie or TV show just by looking at the technology in a character’s hand. A wired telephone means the movie is at least 30 years old. If the characters are staring at a PC, it’s probably 25 years old. If they’re holding a brick-like cell phone, it’s 20. If they’re using the internet on a laptop, it’s the year 2000. If people are using a flip phone, the show is 10 years old. If they’re still using a Blackberry Ltd (NASDAQ:BBRY) device, as they did in the first few years of The Good Wife, it may be five.
If the “meet-cute” is two people bumping into each other because they’re both looking for a Pokemon on an Apple Inc. (NASDAQ:AAPL) iPhone, that’s a new movie.
The iPhone Destroyed Friction
Jan. 9 will mark 10 years since Steve Jobs walked onto a stage and introduced the iPhone. At the time, AAPL shares were at a pre-split 13. They’re up nearly ten-fold since then. No single product has revolutionized society in quite this way, and created more fortunes for those who followed in its wake.
When Jobs stood on that MacWorld stage Amazon.com, Inc. (NASDAQ:AMZN) was selling for the equivalent of $39 per share, Netflix, Inc. (NASDAQ:NFLX) was at the equivalent of $3 and hundreds of other companies, starting with Facebook Inc (NASDAQ:FB), were either privately held or had yet to be founded.
If you seized the opportunities of the Apple iPhone, you made a fortune.
What the iPhone enabled, and what all these other companies delivered, was an end to market friction. Do you need to buy a home, or a car, insurance or stocks? There’s an app for that. Do you need to take a trip, or find some lunch, or learn what’s happening in the world? Do you just want some entertainment? The answer is in the palm of your hand.
The implications of this to many people have been depressing.
Insurance agents, real estate agents, bankers, stockbrokers and travel agents used to have easy, high-paid jobs, because they had the education, tools and market rights needed to get through complex transactions. Even when Main Street was replaced by a Wal-Mart Stores, Inc. (NYSE:WMT) or (in a smaller town) a Dollar General Corp. (NYSE:DG) unit, these professions remained essential gatekeepers.
Now someone can drive into town and set up a new life in town with no one else knowing it. Or they can end that economic life. Millions of secure professionals suddenly find themselves in the same position as coal miners or factory workers, either obsolete or requiring intensive retraining to stay in the game.
Real estate trends have also been turned on their head. Cities are hot … exurbs are not. Service industries have emerged to serve the newly wealthy. Cooks have become chefs, and journalists have become content providers. But many new jobs don’t pay what the old ones did, or provide as much job security.
On my recent vacation, I found hotels with Trivago from Expedia Inc (NASDAQ:EXPE), found food with Yelp Inc (NYSE:YELP) and depended on cellular service from AT&T Inc. (NYSE:T). These are just three of the thousands of companies that have benefited from Apple’s iPhone revolution. AT&T is 131 years old, Expedia 20 and Yelp is 12.
It has taken most of a decade for society to get its collective head around these changes. Fortunes were made, but millions lost jobs. The good news is we have turned a corner. Median incomes finally began rising, strongly, in 2015.
But this is why the future looks frightening to so many people. Change is accelerating in the age of the iPhone and there seems to be no end to it.
AAPL: What Happens Now?
A self-driving Uber car hit the road in Pittsburgh last week and the economic fear level ratcheted up to 11.
Suddenly cabbies, deliverymen, long haul truckers and even Uber drivers, who weren’t even a thing at the start of the decade, see the end of their road, and wonder how they’re going to make a living.
But the lesson of AAPL’s iPhone is that economies, and people, adapt, albeit more slowly than engineers invent. If machines are doing more work, more work is being done, and the value of that work eventually goes entirely to people, and companies, not to the machines.
Dana Blankenhorn is a financial journalist who dabbles in fiction, his latest being The Reluctant Detective Travels in Time. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he owned shares in AAPL and AMZN.
