It has upended the cellular market and transformed Apple into the most profitable and valuable phone maker in the world. To truly understand the iPhone’s impact, it is worth looking back at just where the smartphone market was when Apple shipped its first iPhone in June 2007.
The market consisted of BlackBerrys, Palms and Windows Mobile devices in North America, and a slew of Symbian devices in Europe. Those devices drew their power from combining a phone, with a digital organizer and e-mail capabilities.
The iPhone that went on sale at 6 p.m. on June 27, 2007, literally changed the definition of a smartphone, adding the best Web browser a phone had ever seen, an exciting multitouch interface and a world class music and video player.
But that first model was also a far cry from today’s iPhone. Most notably, the original iPhone supported only those applications provided by Apple, namely things like stock quotes, weather forecasts and YouTube. It also didn’t copy and paste, couldn’t record video nor could it run more than one third-party application at a time. And it was also extremely pricey, starting at $499.
Of course, over time Apple has rectified all of those omissions. Within months it chopped the price and it has steadily added those missing features and a host of other capabilities, from video chat to the ability to act as a portable hotspot. This fall, the iPhone will add a bunch of new features, including location-based reminders, integrated Twitter support and improved notifications.
But the battle is far from over. Though Apple has left several competitors in the dust, it has gained new ones. Chief among those, of course, is Google’s Android operating system.
In addition to Android, Microsoft has gone back to the drawing board and created a credible competitor in Windows Phone 7 and HP has its WebOS, while Research In Motion is trying to upgrade the BlackBerry on the fly in an effort to hold its ground.
Perhaps more importantly, Apple will face continued competition on price. While still competing forcefully at the high end, Android is also being aggressively pushed into low-end devices, including models for developing markets that can sell at less than $100 unsubsidized. That pricing, combined with the fact that Google’s operating system is used by dozens of different phone makers lead many to conclude that the phone market will eventuall resemble the PC market, with Apple a niche player and Android playing the part of the dominant Windows operating system.
And each year, while competitors race to catch last year’s model, Apple has managed to come out with a new one, with new features, prompting legions of existing iPhone owners to upgrade and plenty of other phone owners to join the iPhone camp.