A Trillion-Dollar Kick
The Supreme Court is set to release its widely anticipated ruling on the Health Care law this Thursday.
I mention it only because Friday happens to be the 5th anniversary of the launch of the iPhone, the first time (it wouldn't be the last) when people stood in line around the block to get a glimpse, or better to purchase Apple's shiny new toy.
So amazing, it was, that it was dissed by competitors before it even launched. Steve Ballmer wondered if anyone would pay that much for a phone when cheaper alternatives were so widely available. Tech writers complained that it would be too complicated, and that "you'd have to turn off the music to answer a phone call, and who wants to do that?" AT&T alone thought enough of it to change their business model to accommodate it, and locked in precious exclusivity for years.
The 5th anniversary of such an industry shattering event would normally be cause for barrels of ink and yards of newsprint, but I suspect coverage will be muted because of the reaction, opinion, punditizing, sermonizing, and general news coverage of the health care plan decision which will swamp the Friday papers and news programs. So before we drown in that tsunami of political agony, let me recount some happier notes:
200,000,000 iPhones have been sold, at what, around $600 each? That's, uh, more than $120,000,000,000 in sales? Billions more passed along to app developers via the iTunes and AppStore, and millions, if not billions more spent by companies to write free apps and content compatible with the new device.
And then there's the billions upon billions the wireless companies have spent, first upgrading their networks for more data, now updating them again for faster data, not to mention billions spent by the wireless guys at the FCC to acquire spectrum so the upgrades can go forward in the first place. (And especially not to mention the data charges that show up monthly in millions of customer bills. That's pretty new, eh?) We think of that mostly in the US, of course, but the iPhone sells in more than 125 countries on six continents, so presumably there are similar effects all over the world. This is a global phenomenon.
Then there's the design and programming jobs in America and elsewhere for the iPhone itself - and its johnny-come-lately imitators, the sourcing and manufacture of parts, the employment at assembly plants offshore and in retail stores here (more than half of Apple 50,000+ employees are now at their stores, not at headquarters), with their astonishing sales-per-square-foot metrics unseen by other companies anywhere.
And there are the bits of billions spent with FedEx flying 747's full of iPhones in from the East, the logistics companies getting product to the WalMarts and Best Buys of the world, and, of course, the advertising teams who create the memorable images seen in magazines, television commercials and videos. And let's not forget those involved both in- and outside Apple with Gorilla Glass and peripherals, cases and earbuds, Siri and the long rumored Liquid Metal. Those are jobs and investment too.
Heck, Apple paid Michael Kovach $1 million for the rights to the iPhone domain (Kovach clearly undersold.) There are the multiple billions in marketcap for Apple alone, not to mention companies which have ridden the smartphone train to glory: Instagram, Angry Birds [Rovio] and others. The day the iPhone was announced in 2007, Apple shares went up 8%. RIM went down 7%. It's mostly a happy story, but not perfectly so.
More than half of Apple revenues now come from the iPhone. From totals of $24 billion in total revenue before, to [estimated] $160 billion now - in only five years. Google pays Apple $1 billion a year just to be the default search engine on the iPhone. 20% of Apple revenues come from China. China! Where American companies usually have a hard time launching anything and keeping counterfeits away.
More iPhones have been sold in the past five years than Macintosh computers, all versions and models, laptop and desktop in the nearly 30 year history of Apple. The Touchscreen is now commonplace, in fact, it's a sad phone that doesn't have one. People expect a phone to play music, take pictures, roll video and show movies, send email, serve as a game platform, Twitter and message, and oh yes, make phone calls.
It's a trillion dollar kick in the world economy.
All of this from a tiny little box, small enough to fit in your hand, big enough to change the world.