June 29, 2017 marks a very important milestone in tech history. It was exactly 10 years ago — June 29, 2007 — that Apple Inc. (NASDAQ:AAPL) released the first iPhone. Although it was laughed at by many, the iPhone was a leader in launching the smartphone industry and completed the transformation of Apple from a computer maker to a consumer electronics giant and the world’s most valuable company.
As the iPhone turns 10, here’s a quick overview of how much this one device rewrote the tech landscape.
When AAPL released the iPhone in 2007, the company helped kick off a smartphone revolution.
The Gutting of BlackBerry and Nokia
At the time it entered the market, AAPL had a 0% share. BlackBerry Ltd (NASDAQ:BBRY) owned the market for the early smartphones with its keyboard-equipped BlackBerries and Nokia Oyj (ADR) (NYSE:NOK) was the world’s largest mobile phone vendor, with a nearly 38% market share.
On the day the iPhone turns 10, BlackBerry — which thought the Apple iPhone’s touchscreen would never catch on — is out of the hardware business (other than licensing its name) and struggling to reinvent itself as an enterprise software company.
Nokia went with Microsoft Corporation’s (NASDAQ:MSFT) Windows Mobile operating system as it transitioned to Lumia smartphones, stuck with Windows as Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Android took off in popularity, watched Samsung Electronics Co Ltd (OTCMKTS:SSNLF) take its crown as top mobile phone vendor, then sold its smartphone business altogether to Microsoft in 2014.
As Apple celebrates the iPhone’s 10th birthday, Android dominates the smartphone market with an over 80% market share. But the Apple iPhone is the most popular flagship smartphone, it continues to top the U.S. market and Apple captures over 90% of worldwide smartphone industry profits.
The Transformation of Apple and Ignition of Apple Stock
Prior to 2007, Apple was a computer company that was having success selling portable music players. The iPhone marked the point where AAPL truly began to transform into a consumer electronics company. In 2007, with the announcement of the iPhone, the company dropped the “computer” from its name altogether.
The iPhone turns 10 today, marking a decade of driving Apple stock to astonishing heights. At the time Apple was finalizing the iPhone design in 2006, its market cap was $79.54 billion and it reported revenue for that year of $19.32 billion. By the time the device was released, on June 29, 2007, hype around the Apple iPhone had helped drive AAPL to a $105.60 billion valuation. When the iPhone 4S launched in 2011, the company had hit $392.2 billion. The company sold a record 4 million units on launch weekend that year.
Apple never released iPhone 7 launch sales, but it did say the latest Apple iPhone outperformed the iPhone 6 and its 10 million unit launch weekend. At the time the iPhone 7 launched, the company had quarterly revenue of $46.9 billion and over half of that — $28.16 billion — was iPhone sales.
Today, as the iPhone turns 10, AAPL stock continues to climb and the company recently became the first in the U.S. to surpass an $800 billion market cap.
Looking to the Future With the iPhone 8
It’s all well and good to look at what AAPL has accomplished. However, the iPhone turns 10 at a critical time. The market has matured, sales are off and competition has never been more fierce. There are compelling flagship smartphones like Samsung’s new Galaxy S8 and the Google Pixel Phone fighting for consumer dollars.
And 10 years after the first iPhone dramatically changed what Apple is and launched Apple stock on a lofty trajectory, there is no apparent replacement product. Sales of the iPad are sputtering. The Apple Watch and Apple TV failed to become the “next big thing.” AirPods and the new HomePod smart speaker seem unlikely to have the universal appeal of the iPhone. And AAPL’s self-driving car ambitions — whatever those might ultimately be — are likely years from bearing fruit.
For now, and for the foreseeable future, as the iPhone turns 10, it’s still the iPhone that drives AAPL and Apple stock. This fall, the 10th anniversary iPhone 8 will be released, along with iOS 11 and ARKit — AAPL’s augmented reality platform. The expected radical new design of the iPhone 8, combined with its adoption of AR as a major selling point will undoubtedly result in record launch day sales for Apple. Again. That will be a good thing for the company, as it continues searching for the elusive replacement for its decade-old golden goose, the iPhone.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
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