The iPhone at 10 in Charts

Back in January, around the tenth anniversary of the announcement of the iPhone, I wrote here about the impact that it has had on the world, but talked mostly in qualitative terms. As we now approach the tenth anniversary of the first sales of the iPhone, it’s worth another look, this time from a quantitative perspective, because the iPhone is more or less unique among products launched in the last twenty years in the speed of its growth and its sheer scale.

Over a Billion Phones Sold

Apple sold its billionth iPhone sometime between August and September last year, and has now likely sold 1.2 billion in total. Very few products have sold a billion units in total, let alone in the space of just ten years from launch in a brand new market. The iPhone is unprecedented in the speed of its rise and the scale it’s achieved in such a comparatively short time.

But of course the iPhone wasn’t an instantaneous hit – in its first very partial quarter on sale, it sold just 270,000 units, and in its first four quarters just 5.4 million. It didn’t become a mass market phenomenon until its second year, when it sold nearly three times as many off the back of broader distribution, 3G, and the App Store. Since then, of course, it’s really taken off, rising to an annual peak (so far) of 231.5 million shipments in 2015.

Though it dipped a little the following fiscal year, the iPhone now looks to be on somewhat steadier footing again and heading for another period of growth, possibly rapid growth starting this fall.

Three Quarters of a Trillion Dollars

Not only has the iPhone sold in massive unit numbers, but the revenue associated with those shipments has been enormous too. Across its history, the iPhone has averaged around $640 in revenue per unit sold, for a total of around three quarters of a trillion dollars in total revenue since its launch ten years ago.

Three times, Apple’s quarterly revenues from the iPhone have exceeded $50 billion, and annual revenues have peaked at just under $160 million in the 2015 fiscal year. That would put it in the top twenty global companies by revenue by itself, and even the slightly lower total of $137 million in fiscal 2016 would put it easily into the top 40 globally and the top 20 in the US. And that’s without the App Store, Apple Watch sales, and other Apple products and services which are entirely tied to the iPhone installed base.

Since 2007, the iPhone has accounted for a little over half of Apple’s revenues, and since 2011 it’s accounted for nearly 60% of them, fluctuating a little from quarter to quarter, dipping as low as 57% or as high as 69% over the past few years. The iPhone is absolutely central to Apple as a company and its success since 2007, during which period its total annual revenues grew nearly ten-fold from $24 billion in 2007 to $233 billion in fiscal year 2015. Apple’s operating margins have also expanded by about ten points during that time, from 18% in 2007 to 28% in 2016, and all while spending more than ten times as much on R&D projects which have led to new products and services and will continue to do so in the coming years. Not only is Apple’s revenue today very dependent on the iPhone, but its future product lines are all enabled by the success of the iPhone too.

Another Ten Years?

Much has been made recently of what might come after the smartphone, or indeed which product being launched today might have an impact comparable to the iPhone’s ten years hence. But the smartphone is still by far the dominant consumer product, indeed the only product that’s likely to come close to 100% penetration among mature market populations and high penetration among emerging markets in the coming years too.

AR and VR, wearables, voice speakers for the home, and many other products will emerge and grow over the coming years, but none of them will come close to matching the reach of the smartphone. Indeed, the smartphone itself still seems likeliest to be the enabler of many of these new technologies. Of course, the iPhone has minority market share of the overall smartphone market, and that share will likely continue to shrink as most of the market growth comes from emerging markets where the iPhone is a bit player if it has a role at all.

But Apple will continue to capture an outsized share of revenues and especially profits in these markets, and as I suggested in that piece back in January, even among Android owners its influence will continue to be felt daily in the design, features, apps, and services used on billions of smartphones every day. Will the iPhone still be around in ten years? Almost certainly. But its impact on our lives will certainly live on for not just the next ten years but quite possibly well after that too. And Apple as a company will forever be different because of what’s happened these past ten years with its foray into the smartphone market.


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Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw Research, a technology research and consulting firm focused on consumer technology. During his sixteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.

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