A Blog by Jonathan Low


Jun 27, 2017

Ten Years Later: Apple's iPhone Has Transformed Business - and Life

It's only been ten years? Who can even remember life before smartphones... JL

Betsy Morris reports and Geoffrey Fowler comments in the Wall Street Journal:

'It's funny we even call it a phone.' The iPhone destroyed the phone call. (But) as mobile audiences grew, so did the time individuals spent on their phones. Average usage had risen to 73.8 hours a month by June of last year. The iPhone spawned new industries and business models. Google and Facebook  now get the bulk of their revenue from mobile-ads. Together with Apple, Microsoft and Amazon, they are the five most valuable companies on the stock market. Ten years ago, only one of the top five was a tech company.
Betsy Morris reports: Ten years ago, hailing a cab meant waving one’s arm at passing traffic, consumers routinely purchased cameras, and a phone was something people made calls on.
The iPhone, released a decade ago this month, changed all of that and more, sparking a business transformation as sweeping as the one triggered by the personal computer in the 1980s. Apple Inc.’s AAPL -0.31% gadget, and the smartphone boom that followed, gave rise to whole new industries, laid waste to others and forced new business models.
By essentially compressing a powerful, networked computer into a pocket-size device and making it easy to use, Steve Jobs made the internet almost ubiquitous and fundamentally altered decades-old consumer habits in areas like music and books. What’s more, the functionality packed into the iPhone made it a digital Swiss Army knife, supplanting existing tools from email to calendar to maps to calculators.
“It combined size, power and personalization,” said Paul Nunes, managing director at global consulting and services firm Accenture and author of “Big Bang Disruption,” a book about transformational technologies.
The upheaval triggered by the iPhone, and the launch of Google’s Android operating system for smartphones the following year, led to new innovations like apps that continued to transform industry.
Entrepreneurial coders and upstart businesses could now reach consumers directly, creating new modes of shopping, entertainment, travel and more. App stores today offer an estimated 3.5 million to 3.6 million choices, including games, fitness programs, shopping and dating, according to audience-measurement firm Verto Analytics Inc.
Apps also made it easier for big companies to connect with customers: airlines use them to expedite flight check-ins, banks to handle check deposits, and restaurants to automate ordering.
That activity has been a catalyst for the growing dominance of tech-industry titans. Alphabet Inc.’s Google and Facebook Inc. now get the bulk of their advertising revenue from mobile-ads. Together with Apple, Microsoft Corp. and Amazon.com Inc., they are the five most valuable companies on the stock market today. Ten years ago, only one of the top five was a tech company.
Along the way, smartphones disrupted communication. By offering faster, easier ways to communicate—text, photo, video and social networks—“the iPhone destroyed the phone call,” says Joshua Gans, professor at the University of Toronto and author of the book, “The Disruption Dilemma.” “It’s funny we even call it a phone.”
Smartphones didn’t start social media. Facebook launched in 2004 on desktop PCs. But they made social networks and messaging apps like Facebook’s WhatsApp, Instagram and Messenger, along with Twitter , Snapchat and others, pervasive and indispensable. As of March 31, at least 1.94 billion users were checking into Facebook at least once a month.
As mobile audiences grew, so did the time individuals spent on their phones. Average usage had risen to 73.8 hours a month by June of last year from 68.2 hours the prior year, much of it on social media, according to a report by comScore released later in 2016.
Advertisers have redirected their spending accordingly, wreaking havoc on established news companies. In 2015, total mobile ad spending in the U.S. overtook print ad dollars, according to eMarketer. Last year, Facebook captured 14% of the $190.6 billion global digital advertising revenue, second only to Google’s 32.8%. And in the first quarter of 2017, Facebook’s 49% rise in revenue was largely fueled by online advertising. Smartphones have also laid waste to the camera industry—even as they made photos more relevant than ever. Digital camera shipments fell 80% between 2010 and 2016 to 24 million, according to the Camera & Imaging Products Association. Among the casualties: Eastman Kodak Co. , the iconic film company that was already reeling from the onslaught of digital cameras. In 2012, it declared chapter 11 bankruptcy and has reorganized to focus on commercial imaging markets.
Most photos taken today aren’t printed and kept, but tweeted, messaged or posted. That gave rise to the $20 billion-plus IPO in March of Snap Inc., the disappearing-messaging app. It calls itself a camera company.
Smartphones have paved the way for new technologies that have led to faster production cycles and unpredictable competitors, says Accenture’s Mr. Nunes.
Garmin Ltd.’s navigational device technology was groundbreaking. In 2005, sales of its GPS devices were exploding despite retail prices of $700 and above. Within four months of the introduction of the iPhone, equipped with Google Maps, Garmin had gone from posting record earnings at the end of 2007 to missing expectations in early 2008. Its stock, which was trading around $100 at the end of 2007, had fallen to under $20 a year later. The company has since diversified into wearables and other markets besides autos; its stock is now trading in the $50 range.
As existing businesses evaporated, the iPhone spawned new industries and business models. Ride-hailing firms Uber Technologies and Lyft are built on apps; a smartphone is the price of entry for both riders and drivers.
From the days of the phonograph, people have owned music, whether vinyl records, compact discs or downloads from iTunes. The smartphone accelerated a move away from that concept to effectively renting music from subscription services like Spotify and Apple Music.
Artists and labels, who earn far fewer royalties on these new services, have fought the move but for a flailing music industry, streaming has this year been a shot in the arm. A doubling in paid streaming music subscriptions last year drove an 11.4% increase in retail revenue to $7.7 billion—the industry’s biggest gain since 1998, according to the Recording Industry Association of America.
Nowhere has the smartphone’s impact been more pronounced—or unexpected—than in telecommunications. A month before the iPhone was launched, Randall Stephenson, chief executive of AT&T, Apple’s exclusive partner in the U.S. at the time, told a financial audience: “I believe the iPhone is going to be a game changer.”
It was, but not in favor of telecoms. The iPhone became such a hit with consumers, who lined up and camped out for days to buy it, that it tipped the balance of power. Manufacturers like Apple could now set tougher terms and demand more concessions from carriers.
Wireless companies were able to capitalize on soaring data use for a while, as consumers became more addicted to their smartphones. But the shift to data plans from texts and calling minutes made it easier for users to treat their cellphone service like a commodity.
Wireless service revenue among the top U.S. carriers grew 5.9% in 2008, the first full year the iPhone was on the market, following years of double-digit growth, according to investment bank UBS Group AG. Revenue, which
has been falling in recent years amid increased competition, slipped 1.6% last year.
Many carriers are now rushing to diversify their revenue streams as their customer bases stagnate—most developed nations already have more active smartphones than people—and persistent competition keeps them from raising prices.

Geoffrey Fowler comments:

Dear iPhone,
How do I love thee? Let me count the apps.
A decade ago, Steve Jobs said you were “three revolutionary products” in one. He was wrong. You’ve already displaced so many more: alarm clocks, guitar tuners, pocket calculators, atlases, Filofaxes, dictaphones and weathermen (sorry, Al Roker), to name a fraction.
But you’re no “product” at all: You’re a life partner. You’re the first thing I look at in the morning and the last thing I look at before I sleep. There’s no turning you off.I’m never bored when we’re together. I always have a book to read, plus something to do that’s more pressing than finishing my book. For example, crushing candy.
You’re a handsome showboat that lets me lord it over most Android friends or, bless their hearts, BlackBerry people. Go ahead, show them your 3D touch.
I love you because I can pretend I’m at work by replying-all, “I’m on it,” then burrowing back under covers.Talk to Us
What do you love or hate about the iPhone? Write to Geoffrey Fowler: geoffrey.fowler@wsj.com, and we’ll share the best and worst stories.
You’re the important thing I need to attend to during awkward elevator rides with Forgot Her Name from Accounting. You’re also way cooler to fidget with than a cigarette and probably not as dangerous.
I was smitten from the moment I realized, with you in my hand, I could always name the 20th president (provided I have service, of course).
Then I realized I could also no longer get lost, including in places where people speak Finnish. Together, we can always find a 4.5-star coffee or foot massage or Cronut in a three-block radius.
You’ve made it feel safe for me to get in a stranger’s car, and even take candy from him. Because of you, there’s no chance I’ll inadvertently lose touch with family or friends. (Of course, that means most “Seinfeld” episodes no longer make sense.)
You make me want to express myself. In the decade before my first iPhone, I took 39,242 photos. In the decade since, I took 159,154. According to you, 5,407 were selfies, which seems low to be honest.
Without you, my cherished memories would be locked in my head. It’s hard to imagine climbing a mountain without sharing a 360-degree panorama of it with all my friends—and their own beloved iPhones.
I love you because my parents learned to send photos in iMessage, and I also love them. Even when they’re far away, I feel like I’m with them.Moutaintop sefie? Couldn’t image that 10 years ago. Photo: ISTOCK
I love you because as soon as I realize that I’m out of Cheez Whiz I can instantly order more Cheez Whiz. Or I can walk into a hip local bookstore and find a cool book, then scan the bar code and buy it for $5 less on Amazon. (Wait, is that wrong?)
I love you because you pacify unruly children at dinner parties. In-app purchases are cheaper than babysitters.
I love you, because I will never again have to purchase bathroom reading material.
Now that you’re waterproof, we don’t ever have to be apart. Ever. Ever.

Dear iPhone,
We need to talk. It’s not you, it’s me.
Ten years ago, I was the kind of person who enjoyed rock concerts, sunsets and rainbows. With you in my life, capturing them has become a competitive sport.
So has spotting and seizing available power outlets at airport gates, dodging people FaceTiming while walking down the street, and trying to teach auto-correct that it’s “analytics,” not “anal ticks.”Maybe it is you, iPhone. You’ve become less a “phone” than an always-on portal to work, distraction and frighteningly addictive personal-data vacuums. (Don’t act like Mark Zuckerberg isn’t your BFF.)
I can’t forgive you for making oversharing an occupation. Selfies have killed or injured hundreds. That’s not fake news!
You’re so possessive. You’re the reason I ignore my family at the dinner table, my colleagues in meetings, and the traffic I’m about to walk into.
I have woken up my human spouse on more than a few occasions with the bright light of your screen while tapping out a response to a work query at 2 a.m.
That’s right—48,836 unread emails.
That’s right—48,836 unread emails. Photo: The Wall Street Journal
Thanks to you, I have email with me literally at all times, but somehow I still have 48,836 unread emails.
You’re the reason a quarter of American teens have unfettered internet access almost “constantly.” What could possibly go wrong?
iPhone, I hate you for killing pub trivia night. Nobody actually recalls the name of the 20th U.S. president, not because he was only in office for 200 days, but because you answer for us.
You’re an emotional slot machine. Every time I look at you, approximately 180 times each day, it’s something new. And I now have the attention span of a squirrel. I’m never just alone with my—ooh, a Like!
You’re so fragile. Your battery is always on the edge of life support. Your sleek “rose gold” body is entirely obstructed by a battery backpack that makes you look like Quasimodo.
Ugh. The iPhone’s dreaded dead battery screen.
Ugh. The iPhone’s dreaded dead battery screen. Photo: ISTOCK
Your “Storage Almost Full” message literally ruins vacations. How about starting by automatically deleting all the blurry photos you took in dark restaurants?
Owning an iPhone used to be edgy; now it’s as safe as a Volvo. I sure hope design guru Jony Ive is bringing his A-game for the 10th-anniversary iPhone X Apple’s-Still-Innovative-Dammit edition.
Leave you? Ha. One time I accidentally handled you while cutting jalapeños. For a week, you made my skin burn every time I picked you up. But I still couldn’t stop tapping.
My parents aren’t going to learn a new message app. If I leave you for an Android, I might never hear from them again.
The 20th U.S. president was James Garfield. We know this because our iPhones told us.
The 20th U.S. president was James Garfield. We know this because our iPhones told us. Photo: Getty Images
Like it or not, we’re connected. I feel the phantom vibrations of your notifications even when you’re not in my pocket. When surveys ask what people would rather give up, you or sex, the results are super sad.
Do you love me? “You’re looking for love in all the wrong places,” you say with that perky Siri voice.
iPhone, after 10 years, I just can’t quit you.
P.S.: Please come out in blue.


Post a Comment