How The iPhone Changed The Smartphone Industry

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Five years ago today, Apple's first iPhone hit stores. Many in the tech world thought that it would be a flop. For one thing, it was ridiculously expensive. For another, it was something no one had ever really heard of before: a smartphone targeted primarily at consumers, rather than business people. Everybody knew that the smartphone market was a business market, especially Research In Motion, makers of the iconic BlackBerry.

Five years later, RIM is in its death throes and Apple's fifth-generation iPhone, the iPhone 4S, is the most popular single gadget on the planet. In fact, in five years the iPhone has sold 250 million iPhone and raked in $150 billion in revenues. While Google's Android platform has emerged as a strong competitor - and even taken a larger chunk of the market - the iPhone remains the single most popular smartphone in the world.

Recent data released by comScore shows how much the iPhone has grown in its five year lifespan. The data shows, among other things, that with the iPhone Apple effectively created the consumer smartphone market in 2007 (just as they created the tablet market in 2010 with the iPad). On the original iPhone's launch day in 2007, just a hair over 9 million people owned smartphones - most made by BlackBerry or Palm. Five year's later over twelve times that number - 110 million people - own smartphones. In fact, according to comScore, by the time we're ringing in the new year six months from now, a majority of American cell phone owners will be smartphone owners (thanks, no doubt, to a big boost from the new iPhone, set to launch in the fall).

Five Years Of The iPhone

One interesting aspect of the iPhone is its tendency to evoke in customers a desire to buy the latest version every year, rather than wait until their current phone conks out. In fact, according to comScore's data, almost three quarters of current iPhone users are using one of the two most recent versions of the device - the iPhone 4 and iPhone 4S:

Five Years Of The iPhone

The iPhone's demographic has changed somewhat over the last five years, as well. As with most gadgets, the first iPhones were bought by young-ish middle class men with higher than average disposable income. In 2007 61% of iPhone owners were men, 55% were between 25 and 45, and 48% made over $100,000 per year. In every respect but income, those curves have evened out considerably. Now 47% of iPhone owners are women, and 54% are outside the 25-45 age range. The only place where the demographics have remained the same is income - while more lower-middle class people are buying iPhones now, 42% are still in the $100,000+ income range

Five Years Of The iPhone

The iPhone and other smartphones - i.e., those running on the Android platform - are continuing to grow rapidly. In fact, in the last year or so they have even begun to eat into the low-end feature phone market, creating significant problems for companies like Nokia and Motorola, both companies that made their names selling quality, affordable feature phones. While the smartphone may never hit 100% market saturation, it will certainly continue to draw closer to it over the next few years. All thanks to a device that Bloomberg said in 2007 would "sell a few to [Apple's] fans," but would never manage to "make a long-term mark on the industry."

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