One decade ago this month, Apple launched the iPhone and changed the business world forever. The rise of smartphones caused entire industries to collapse as new ones quickly appeared to take their place. Of course, the iPhone fundamentally changed Apple more than any other organization. Before the smartphone’s launch, the tech company earned 40 percent of its sales from iPods and had a market capitalization of $72.9 billion, less than a third of Microsoft’s valuation at the time. Today, iPhone sales account for 63 percent of its total business, which is currently valued at more than $600 billion. So far Apple has sold more than 1.2 billion iPhones, making it one of the most successful commercial products in history.
The iPhone also had a major impact on the rest of the tech industry. A year after Apple’s big launch, Google responded by introducing the Android mobile operating system. Within a few years millions of consumers were walking around with little computers in their pockets. People began to use the Internet constantly, allowing websites like Facebook and Amazon to grow into giants. The ascent of these online ventures dealt a lot of damage to traditional media outlets like newspapers as well as brick and mortar retailers. Still, perhaps no other industry has been changed as radically as the music business. Apple had already altered the industry with the iPod and its iTunes music selling service. By the mid-2010s, however, mobile streaming services like Spotify gave fans even more listening options.
While these constant changes have made the music business increasingly volatile, at least it’s managed to remain relevant in today’s smartphone-enabled society. The same sadly can’t be said about the camera industry: even though taking photos is more popular than ever, most consumers rely on their phones to snap pictures. Digital camera sales peaked in 2010 as companies moved approximately 121 million units. Six years later, though, sales plummeted to less than 25 million cameras sold. This severe drop off caused Kodak to file for bankruptcy and develop a new business model focused on commercial imaging. But as established photo companies faltered, startups like Instagram and Snap developed dynamic mobile platforms for users to share pictures and grew into multi-billion dollar operations in the process. Only time will tell if these and other mobile-focused companies will continue to thrive over the next ten years.
- What do you think is the most significant impact that smartphones have had on the business world?
- Will smartphones and other mobile devices continue to dominate American business and culture for the next decade?
Sources: Betsy Morris, “From Music to Maps, How Apple’s iPhone Changed Business,” The Wall Street Journal, June 23, 2017; WSJ Graphics, “The iPhone Decade in 12 Charts,” The Wall Street Journal, June 29, 2017.