The first generation iPhone was released on June 29, 2007 while the most recent iPhone models are the iPhone 6 and iPhone 6 Plus. In 7 years, Apple Inc. (AAPL, Financial) managed to create an empire from a product they were not as competitive as Motorola (MSI, Financial), Nokia (NOK, Financial) or Samsung (SSNLF, Financial).
“What we want to do is make a leapfrog product that is way smarter than any mobile device has ever been, and super-easy to use. This is what iPhone is. OK? So, we're going to reinvent the phone.”
“An iPod, a phone, an internet mobile communicator... these are NOT three separate devices! And we are calling it iPhone! Today Apple is going to reinvent the phone. And here it is.”
“You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.”
Steve Jobs
The resounding sales of the iPhone have been credited with reshaping the smartphone industry and helping make Apple one of the world's most valuable publicly traded companies in 2011/12.
The iPhone is the top-selling phone of any kind in some countries, including the United States and Japan.
Steve Jobs and his unique touch
Apple CEO Steve Jobs steered the original focus away from a tablet, like the iPad, and towards a phone. Apple created the device during a secretive collaboration with AT&T Mobility –Cingular Wireless at the time – at an estimated development cost of U.S. $150 million over 30 months.
Jobs unveiled the iPhone to the public on January 9, 2007, at the Macworld 2007 convention at the Moscone Center in San Francisco. The two initial models, a 4 GB model priced at U.S. $499 and an 8 GB model at U.S. $599 (both requiring a 2-year contract), went on sale in the United States on June 29, 2007, at 6 p.m. local time, while hundreds of customers lined up outside the stores nationwide. The passionate reaction to the launch of the iPhone resulted in sections of the media dubbing it the "Jesus phone." Following this successful release in the U.S., the first generation iPhone was made available in the UK, France and Germany in November 2007 and Ireland and Austria in the spring of 2008.
On July 11, 2008, Apple released the iPhone 3G in 22 countries, including the original six. Apple released the iPhone 3G in upwards of 80 countries and territories. Apple announced the iPhone 3GS on June 8, 2009, along with plans to release it later in June, July and August, starting with the U.S., Canada and major European countries on June 19.
The iPhone attracts users of all ages, and besides consumer use, the iPhone has also been adopted for business purposes.
Units sold and revenues uprising
Apple sold 6.1 million first generation iPhone units over five quarters. Sales in the fourth quarter of 2008 temporarily surpassed those of Research In Motion's BlackBerry (BBRY, Financial) sales of 5.2 million units, which briefly made Apple the third-largest mobile phone manufacturer by revenue, after Nokia and Samsung.
Recorded sales grew steadily thereafter, and by the end of fiscal year 2010, a total of 73.5 million iPhones were sold.
By 2010, the iPhone had a market share of barely 4% of all cellphones; however Apple pulled in more than 50% of the total profit that global cellphone sales generate. Apple sold 14.1 million iPhones in the third quarter of 2010, representing a 91% unit growth over the year-ago quarter, which was well ahead of IDC's latest published estimate of 64% growth for the global smartphone market in the September quarter. Apple's sales surpassed that of Research in Motion’s 12.1 million BlackBerry units sold in their most recent quarter ended August 2010. In the United States market alone for the third quarter of 2010 while there were 9.1 million Android-powered smartphones shipped for 43.6% of the market, Apple iOS was the number two phone operating system with 26.2% but the 5.5 million iPhones sold made it the most popular single device.
On March 2, 2011, Apple announced that it had sold 100 million iPhones worldwide.
As a result of the success of the iPhone sales volume and high selling price, headlined by the iPhone 4S, Apple became the largest mobile handset vendor in the world by revenue in 2011, surpassing long-time leader Nokia.
In order to do so, Apple Inc. knew that it had to play rough and so from 2007 to 2011, Apple spent U$S 647 million on advertising for the iPhone in the U.S.
In January 2012, Apple reported its best quarterly earnings ever, with 53% of its revenue coming from the sale of 37 million iPhones, at an average selling price of nearly U.S. $660. The average selling price has remained fairly constant for most of the phone's lifespan, hovering between U.S. $622 and U.S. $660. On the other hand, labor costs are estimated at between U.S. $12.50 and U.S. $30 per unit, with workers on the iPhone assembly line making U.S. $1.78 an hour.
As the industry profits grew from U$S 5.3 billion in the first quarter of 2010 to U$S 14.4 billion in the first quarter of 2012, Apple had managed to increase its share of these profits. This is due to increasing carrier subsidies and the high selling prices of the iPhone, which had a negative effect on the wireless carriers –Â AT&T Mobility, Verizon (VZ, Financial), and Sprint (S, Financial) –Â who have seen their EBITDA service margins drop as they sold an increasing number of iPhones. By the quarter ended March 31, 2012, Apple's sales from the iPhone alone (at U.S. $22.7 billion) exceeded the total of Microsoft from all of its businesses (U.S. $17.4 billion).
In the fourth quarter of 2012, the iPhone 5 and iPhone 4S were the best-selling handsets with sales of 27.4 million (13% of smartphones worldwide) and 17.4 million units, respectively, with the Samsung Galaxy S III in third with 15.4 million.
The continued top popularity of the iPhone despite growing Android competition was also attributed to Apple being able to deliver iOS updates over the air while Android updates are frequently impeded by carrier testing requirements and hardware tailoring, forcing consumers to purchase a new Android smartphone to get the latest version of that OS. However by 2013 Apple's market share had fallen to 13.1%, due to the surging popularity of the Android offerings, and the fact that the iPhone does not compete in the feature phone or prepaid segments.
Apple announced on September 1, 2013, that its iPhone trade-in program would be implemented at all of its 250 specialty stores in the US. For the program to become available, customers must have a valid contract and must purchase a new phone rather than simply receive credit to be used at a later date. A significant part of the program's goal is to increase the number of customers who purchase iPhones at Apple stores rather than carrier stores.
Apple released its opening weekend sales results for the 5c and 5s models, showing an all-time high for the product's sales figures, with 9 million handsets sold –Â the previous record was set in 2012, when 5 million handsets were sold during the opening weekend of the 5 model. This was the first time that Apple has simultaneously launched two models and the inclusion of China in the list of markets contributed to the record sales result. Apple also announced that, as of September 23, 2013, 200 million devices were running the iOS 7 update, making it the “fastest software upgrade in history.”
The finalization of a deal between Apple and China Mobile, the world's largest mobile network, was announced in late December 2013. The multi-year agreement provides iPhone access to over 760 million China Mobile subscribers.
In the last quarter of 2013, there were 51 million iPhones sold, a new record, compared to 47.8 million in the last quarter of 2012.
In March 2014, sales of the iPhone brand had reached 500 million devices.
On September 9, 2014, the iPhone 6 and iPhone 6 Plus were officially unveiled during a press event at the Flint Center for Performing Arts in Cupertino, California.
The iPhone 6 line was released on September 19, 2014; pre-orders began on September 12, 2014.
Rumors about a larger-screen iPhone 6 later this year are likely to bring about a significant number of upgrades as well as allow Apple to reach the portion of the market that wanted an iPhone but didn’t consider one because of the display. Further, recent moves in emerging markets to re-launch the iPhone 4 and offer a less expensive iPhone 5c suggest the company will compete somewhat more aggressively on price even though it will almost certainly ignore calls for a truly cheap product
iPhones created since 2007
2007 – Original iPhone 8GB
2008 – Original iPhone 16GB
2009 – iPhone 3G 8GB/ 16GB
2010 – iPhone 3GS 16GB/ 32GB
2011 – iPhone 3GS 8GB - iPhone 4 16GB/ 32GB
2012 – iPhone 4 8GB - iPhone 4S 16GB/ 32GB/ 64GB
2013 – iPhone 5 16GB/ 32GB/ 64GB
2014 – iPhone 4S 8GB - iPhone 5C 8GB/ 16GB/ 32GB - iPhone 5S 16GB/ 32GB/ 64GB
2015 – iPhone 6 16GB/ 64GB/ 128GB – iPhone 6 Plus 16GB/ 64GB/ 128GB
Total iPhones sold worldwide
January 2008: 3.7 million
January 2009: 17.3 million
January 2010: 42.4 million
April 2010: 50 million
January 2011: 90 million
March 2012: 108 million
November 2013: 421 million
June 2014:500 million
You have seen how many units Apple has sold in less than 7 years. You have also noticed how much each iPhone costs and the average selling price of each unit. Despite investments in research and development and advertising, the obvious conclusion is that Apple will keep on gaining tons of dollars as long as it creates at least one new upgrade to its device.
After all, people will keep on buying iPhones, whether it’s their first one or just to renew their old ones, ie. the ones they bought last year.
