The iPhone Turns 10

David Murphy

Murphy's Law iPhone 1

So it’s a happy birthday to the iPhone, 10 years old today. As those who have been with us from the start will know, we don’t expend too much time and effort on covering handsets and other devices at Mobile Marketing, on the basis that there are plenty of gadget sites and blogs whose raison d’etre is to do just that. We’re much more interested in how brands are trying to engage with consumers on their phones, tablets, and all the other connected devices out there, from cars to fridges, smart TVs, wearables and Amazon Echos.

But we can’t let the iPhone’s 10th birthday pass without a few words, simply because it was the device, and subsequently the ecosystem – 2.2m apps in the App Store at last count – that kick-started the mobile marketing revolution. Before the iPhone, and the App Store that followed the year after, mobile marketing was largely about SMS, the odd downloadable Java brochure (like an early app) and primitive WAP sites that took an age to load – and when they did, usually left you wondering why you had bothered waiting.

On the handset front, meanwhile, consumers had a choice between Nokia ‘Mars bars’ or clamshell devices from other manufacturers such as LG, Samsung and Sony Ericsson. There were a couple of notable exceptions. Motorola’s Razr, launched in 2003, turned heads with its sleek design, the keys sunk flush into the keypad rather than sitting proud of it, as was the norm. Nokia fans could also turn to the Communicator. This beast of a device, originally launched in 1996, combined a full Qwerty keyboard with a landscape screen in a clamshell device that was about the size and shape of a 6-inch Subway Sub, though considerably heavier. If neither of those took your fancy, then you probably had to opt for a BlackBerry, or one of the BlackBerry-esque Nokia devices, like the E61 that the Finnish handset-maker came out with in 2005.

Touchscreen keyboard
But when the iPhone came out, it turned the mobile handset market on its head. The (with hindsight) simple move of creating a soft, touchscreen keyboard meant that all of that 3.5-inch glass real estate could be used as the screen, creating lots of display area without the need for a weight-inducing clamshell design.

This looks all the more remarkable considering the company that developed the iPhone had never even made a phone before. Back in 2007, Apple Computer made its money from its iPod portable music devices and iTunes Store, and its Mac computers. But it clearly believed it was on to something with the iPhone, so much so that when that first model was unveiled on 9 January 2007, it changed its name, dropping the ‘Computer’ to become simply ‘Apple’. I have often thought how fascinating it would have been to be a fly on the wall in some off the other handset-makers’ boardrooms when the iPhone came out and questions of the order of “Why the &*$! didn’t we do this?” started to be asked.
BlackBerry (or RIM as it was then known) was undeniably the biggest loser. The company mistakenly thought Apple’s initial success with the iPhone would be a flash in the pan, then watched helplessly as its share of the smartphone market fell to just one per cent between 2010 and 2015, and a $1.9bn (£1.6bn) profit turned into a $5.9bn loss by 2013.

Apple and the iPhone, meanwhile, just went from strength to strength. Indeed, an October 2015 report from Bloomberg suggested that Apple was making 90 per cent of all the profits within the handset industry. This despite the initial poor battery life and pretty serious problems like the ‘Antennagate’ design flaw that saw iPhone 4 users unable to make calls if they held the phone in a certain way due to interference with the antenna built into the external rim of the phone. Apple’s response was legendary: “just avoid holding it that way”, before the company conceded it may actually have properly messed up and issued customers with bumper cases to fix the problem.

10 years on, Apple’s business looks in pretty good shape. At least, I think most companies would be happy with its revenues of $215.6bn and operating income of $60bn for the year to 24 September 2016, reported in an SEC filing. But iPhone sales growth has slowed in recent years, and actually fell in 2016, for the first time since it launched. Is this a blip, or has the device lost some of its allure in the face of competition from Samsung, Huawei and others? Or is it simply the case that in the grand scheme of things, the iPhone will go down in history as that thing Apple made all its money out of for a few years, before it jumped on the fresh opportunities presented by virtual reality, self-driving cars, connected homes and whatever comes next?