How Apple’s iPhone Overtook Samsung As The Top Smartphone In The World

Summary

The video chronicles the history of the iPhone, from Apple's near bankruptcy in the 90s to Steve Jobs' return and the subsequent release of the breakthrough iPhone in 2007. It discusses the initial skepticism and eventual widespread adoption, fueled by the revolutionary App Store. The summary touches on the iPhone's industry dominance, fierce competition with Samsung, and speculation around Apple's future innovations in AI and personal assistants to propel iPhone capabilities forward.

Takeaways

• 😲 Apple's iPhone, first introduced in 2007, has become one of the world's most successful products ever, selling about 2.2 billion units to date
• 📈 The iPhone triggered explosive growth for Apple, propelling it from near bankruptcy in the 90s to becoming the world's first $3 trillion company
• 👨‍💻 The 2008 App Store launch allowed 3rd party apps and precipitated the rise of modern tech giants like Facebook and Uber
• 🔥 The iPhone set the standard for modern smartphones with features like touchscreens and app stores that competitors copied
• 📱 Today, with 53% US market share and 20% global share, the iPhone dominates the lucrative high-end smartphone market
• 💰 Apple's high iPhone profit margins stemming from premium pricing and ecosystem lock-in make it extremely profitable
• ⚔️ Samsung remains Apple's biggest competitor, but has struggled to match Apple's ecosystem and software capabilities
• 🤖 AI and machine learning capabilities will likely be a key way iPhones differentiate themselves and evolve in future
• 💡 Apple pioneered the concept of a powerful computer in your pocket and redefined what a phone could be
• ❓ With over 2 billion iPhone users today, the challenge is continuing innovation and giving users a reason to upgrade every year

Q & A

What was Apple's business like before launching the iMac in 1998?

Before launching the iMac in 1998, Apple's business was struggling. They were nearing bankruptcy with revenue around $6 billion per year. The iMac launch helped turn the business around, driving 33% year-over-year growth.

How did the iPhone announcement in 2007 shock the world?

The iPhone announcement shocked the world because Steve Jobs introduced a single device that combined three products in one - an internet communicator, an iPod, and a phone. This was revolutionary at a time when most phones were fairly basic.

Why were early iPhone sales lower than expected?

Early iPhone sales were lower than expected because initially the iPhone did not have an App Store or allow third-party app downloads. It was limited as a closed system. The introduction of the App Store in 2008 transformed phone capabilities.

How did the App Store change the trajectory of the iPhone?

The App Store allowed endless customizations and new functions for the iPhone, spurring innovation across industries like social media, ridesharing, and more. It put Apple ahead of competitors who lacked similar integration.

How did Apple surpass a $1 trillion market cap?

Apple surpassed a $1 trillion market cap in 2018, a decade after launching the revolutionary App Store. The App Store led to massive iPhone adoption and sales growth, cementing Apple's industry leadership.

Why doesn't Apple need to rapidly innovate new iPhones anymore?

Apple doesn't need rushed iPhone innovation anymore because iOS capabilities expand meaningfully through software updates. Also, Apple's brand loyalty and ecosystem lock-in means consumers will buy updated iPhones even without groundbreaking changes.

How has Apple distinguished itself from Samsung recently?

Apple has focused more on software services and AI capabilities which set it apart from Samsung's hardware focus. Apple's proprietary software ecosystem also gives it an advantage.

What emerging technologies could shape the future of the iPhone?

Artificial intelligence and machine learning will likely shape the future iPhone experience with more intuitive and responsive features. There could also be a bigger push into voice assistance.

What was Steve Jobs’ initial goal for the iPhone and how did Apple exceed it?

Steve Jobs' initial goal was for the iPhone to capture 1% of the mobile phone market share. Within a decade of launching, Apple's iPhone came to dominate over 50% of the U.S. market.

Who were some of the early iPhone skeptics and how were their views disproven?

Prominent skeptics included Steve Ballmer who doubted business use without a keyboard. Blackberry also dismissed the competitive threat initially. The App Store and rapid consumer adoption proved these views very wrong.

Outlines

00:00

📱 How Apple's iPhone Changed the World

The first paragraph provides background on the introduction of the iPhone in 2007 and its rapid success, becoming one of the world's most popular and profitable products. It discusses iPhone sales milestones and impact.

05:02

😕 Initial Skepticism About the iPhone's Prospects

The second paragraph covers the initial skepticism towards the iPhone from industry veterans and competitors like Nokia, Microsoft, and BlackBerry. It seemed unlikely that Apple could crack the competitive mobile phone market.

10:02

📈 The iPhone Takes Off After Launching Its App Store

The third paragraph explains how the introduction of the App Store in 2008 was a pivotal moment, leading to the iPhone's takeoff and ultimately the demise of rivals like BlackBerry. The iPhone ecosystem expanded into more aspects of users' lives.

Keywords

💡iPhone

The iPhone is the flagship smartphone product launched by Apple in 2007. It revolutionized the mobile phone industry with its sleek design, multi-touch screen, and platform for downloadable apps. The iPhone is credited with ushering in the modern smartphone era and contributing greatly to Apple's success.

💡App Store

The App Store is the digital platform created by Apple for downloading apps onto iPhones and other iOS devices. Launched in 2008, it allowed third-party developers to build and sell apps to expand the iPhone's functionality. This was a major innovation that competitors lacked, and a key driver of the iPhone's popularity.

💡Steve Jobs

Steve Jobs was the co-founder and longtime CEO of Apple. He oversaw development of the iPhone before passing away in 2011. Jobs is considered a visionary leader who foresaw the potential of multi-touch interfaces and downloadable apps on mobile devices before others.

💡market share

Market share refers to the percentage or proportion of total sales in an industry that is captured by a particular company. The video discusses how Apple and competitors like Nokia, BlackBerry, and Samsung have fought for mobile device market share over time as the iPhone disrupted the status quo.

💡ecosystem

In technology, an ecosystem refers to the interconnected network of hardware, software, services, developers, and users that support a product platform like the iPhone. Apple has prioritized building a rich, integrated ecosystem around the iPhone which competitors have struggled to match.

💡A.I.

Artificial intelligence (A.I.) is expected to be a key technology integrated into future iPhones. Apple is investing in on-device A.I. capabilities like image recognition and speech processing to enable new intelligent iPhone features while protecting user privacy.

💡foldables

Foldables refer to a new form factor of smartphones with flexible displays that can be folded or unfolded. Samsung has been an innovator with foldable Android phones, viewed as potential iPhone competitors that illustrate ongoing innovation in the smartphone industry.

💡services

Services refers to Apple's growing segment of subscription-based software offerings and digital content like Apple Music, iCloud, Apple TV+, etc. These recurring revenue services are seen as pivotal to Apple's future as iPhone hardware sales mature.

💡voice assistant

Voice assistants like Siri allow users to interact with a device through voice commands and queries. While Apple has lagged rivals in voice technology, advanced voice assistants integrated with iPhones are expected to be an important future capability.

💡design

The iPhone's innovative hardware and software design, featuring sleek aesthetics and an intuitive user interface, was radically different from previous smartphones and considered revolutionary when it first launched.

Highlights

Apple unveiled the revolutionary iPhone in 2007, changing mobile phones forever

The iPhone sold over 400,000 units in its first weekend and over 2.2 billion units total by 2022

Industry experts and competitors were highly skeptical the iPhone would succeed without a keyboard

The 2008 App Store launch led to the iPhone's rise and the demise of competitors like BlackBerry

The App Store allowed the iPhone to become more than just a phone

Apple sold over 50 million iPhones in 2011 for the first time

The iPhone set the standard that most smartphones have followed since

Apple became the world's first $1 trillion company in 2018

Over 2.3 billion iPhone units have been sold to date

Apple faces questions on the need for annual iPhone updates

Apple has surpassed Samsung as the top smartphone maker globally

Apple's ecosystem makes it hard for Samsung to truly disrupt them

Apple is emphasizing services to differentiate from hardware-focused Samsung

AI and personal assistants could define the next era of the iPhone

Far more AI capabilities are still untapped in the iPhone

Transcripts

Every once in a while, a revolutionary product

comes along. That changes everything.

Today, Apple is going to reinvent the phone.

And here it is.

First introduced to the world in 2007, Apple's

iPhone has become one of the world's most

successful products of all time.

The early results are in, Apple's declaring the

iPhone launch a success.

Some estimates suggest that Apple will sell as

many as 400,000 units this weekend alone.

This is it. This is the device that everyone's

been waiting for.

Nearly two decades.

And 42 models later, the iPhone has made it into

the hands of billions of people, redefining the

meaning of a phone.

The iPhone from 2007 to a comparable period in 2022

has sold about 2.2 billion.

There was immediately a sense that this was a very

big deal.

All of the other main competitors were either

killed or kind of self-destructed.

This is the story of the iPhone and how it changed

the world.

Apple was founded in 1976 by Steve Jobs and Steve

Wozniak. Today, it's a household name and one of

the world's most valuable companies.

But it started with humble beginnings.

Before the iPhone, Apple had had a near-death

experience where bills were piling up.

Jobs was ousted by Apple in 1985 after a power

struggle between himself and another executive.

In July of 1997, he rejoined the company,

looking to save it from financial ruin.

Steve Jobs had to return, and one of the first

things he did when he got back to Apple in 1997 was

cut lots of stuff.

One of the first products to go was Apple's Newton,

the company's failed attempt at a handheld

device.

Apple had also been burned with the Newton, and

until the iPod, they didn't want to touch

anything to do with mobile.

It was basically a Mac business and when Steve

Jobs returned in 1997, his first efforts were

related to revamping the Mac line.

He did manage to turn Apple around.

It was basically had been written off as being a

dying company, and he brought it back with iMacs

and AirPort, an early version of Wi-Fi.

Various things, but no attempt to do mobile at

that point.

In 1998, introducing the iMac.

Apple's business at that time did about $6 billion

in revenue per year, and in the year after that

iMac came out, the business jumped.

It grew at 33%.

By 2001, though, the business had declined to

about a $5 billion revenue business.

In the same year that business was declining,

Apple attempted to reinvent itself,

introducing the iPod, a portable digital music

player.

The iPod was the first venture into mobile and

consumer electronics, and the iPod was wildly

successful, but very much a niche product.

The majority of growth from Apple from 2001 to

2007 was almost entirely was from the iPod.

This was really the golden age and the period

where Apple had reinvented themselves in

the eyes of investors as being more than just a

computer company.

Before Apple entered mobile devices, much of

the cell phone development took place

outside of Silicon Valley.

There was i-mode in Japan, which was like the mobile

web. In 1999, there was Symbian in Europe,

BlackBerry in Canada, Motorola in Texas, and

Palm here in Silicon Valley.

So basically mobile by the 2000 was seen as

something that was probably not going to be a

Silicon Valley story.

During the early 2000, one of the world's best

selling phones was the Nokia 3310, and by 2005,

the Finnish company had sold its one billionth

mobile phone. But then in January 2007, Apple and

Steve Jobs shocked the world with the

groundbreaking announcement.

These are not three separate devices.

This is one device.

And we are calling it iPhone.

Steve Jobs, when he revealed it, he said this

is an internet communicator, like he

threw it out. These are three products.

It's not just an iPod phone.

In a 2007 interview with CNBC, Jobs said Apple's

goal was to take 1% of the market share.

It exclusively partnered with phone carrier AT&T in

order to achieve this goal, selling its first

iPhone for $499.

However, industry veterans and competitors

remain skeptical.

Why in the world would Apple Computer want to

jump into the handset market?

With so much competition and already so many

players.

We use all the handsets out there and uh boy, is

it frustrating. It's really frustrating.

It's a category that that needs to be reinvented.

And we think what we've done is to, is to reinvent

the phone and completely change what your

expectations are going to be for what you can carry

in your pocket.

Steve Ballmer, who at the time was the CEO of

Microsoft, was one of the people that expressed

skepticism that it would ever sell well.

Steve Ballmer pooh poohed it as not being a, you

know, it's not going to go anywhere.

It doesn't have a keyboard Business people

want a keyboard.

Other companies, though, like BlackBerry, you know,

made a very combative statement that this won't

make any difference.

Investors were optimistic about what the iPhone

could, the impact that it could have with Apple.

And when it was released in the summer of 2007, the

initial data that came out from AT&T was a

disappointment from that first few days of sales,

and I remember talking to investors after that first

weekend, and the general sense was that this

product, in one investor's words, was

"dead on arrival."

Apple sold 1.4 million iPhones in 2007, with 80%

of those sales coming in Q4.

For perspective, in the same year, Nokia sold 7.4

million mobile phones in Q4 alone.

Nokia was seen as unstoppable, unbeatable in

the late 90s early 2000.

They shipped a lot of devices.

The investing community largely took this as

something that is going to be a much more

difficult market for Apple to really crack.

Although the iPhone debuted to lackluster

sales, one feature was about to change the

trajectory forever.

For the first year, you couldn't download apps.

There were no apps, there was no App Store.

There were staffers at Apple that pushed very

hard for the App Store.

And then that became the defining feature of the

iPhone. And that was just absolutely crazy.

That started the rocket rise.

The 2008 launch of the App Store ultimately led to

the demise of dominant companies like BlackBerry,

whose products didn't offer similar

integrations. It also spurred a new wave of

modern tech companies and put Apple ahead of its

competitors.

Uber didn't exist before.

Facebook predates the iPhone, but Facebook

pivoted really hard. Mark Zuckerberg, he was like,

no, that's a future.

We have to have the best iPhone app that exists.

The App Store allowed your phone to become a lot

more. What the traditional phone

manufacturers missed is they missed the App Store.

That was the piece that that incite that other

phone manufacturers didn't see that coming.

In the years following the App Store, Apple took off.

In 2011, the iPhone 4S helped Apple reach a

milestone. Over 50 million iPhones were sold

for the first time in a year, and by 2015, Apple

was selling over 200 million iPhone units

yearly.

The App Store was a huge thing, and Android

basically followed that model with the Play Store.

I don't think there's any question the iPhone set,

the standard that really almost all phones have

followed since then.

A decade after the App Store launched, Apple hit

a historic $1 trillion market cap, becoming the

first publicly traded U.S .

company to do so.

Today, there are nearly 1.5 billion active iPhone

users, and the iPhone dominates in the U.S.

with 53% of the market share.

In 2019, Apple stopped breaking out iPhone unit

sales, but it's estimated that more than 2.3 billion

iPhone units have been sold to date.

After 15 generations of the iPhone and becoming a

$3 trillion company, what else is left for Apple?

The whole smartphone industry is is facing a

real question. I mean, we don't need a new iPhone

every year. The consumer doesn't, but Apple does

because it's the way the company works.

But there is no clear n ext feature

.

For the first time, Apple has surpassed Samsung as a

smartphone leader, holding 20% of the global

market share, but Samsung is not far behind and

previously held the spot since 2010.

There is a period from 2008 to 2015

where Apple needed to worry about what Samsung

was going to do with Android. Their market

share was actually declining globally from

call it 20%, but what Apple has been the master

at is building the ecosystem.

I can't imagine a scenario where Samsung,

for example, can build a suite of products that is

going to disrupt the Apple ecosystem.

And I'm always nervous at that view, because that's

what people said about BlackBerry in 2007, is

that the email client was so fundamental, but in

this case, Apple's taking over so many parts of our

lives, it's hard to imagine that any

competition is going to impact them.

Samsung is still Apple's biggest competitor,

continuously innovating and launching new products

like foldables.

But Apple's high selling price means it's one of

the most profitable companies in the world.

For an American deciding what phone to buy.

Almost always, it's Apple versus Samsung.

The one thing Apple has really been emphasizing

lately is services, and that's something that

Samsung can't easily match because they don't

have the same kind of software organization.

We want to be an industry example.

We're really just focused on how do we create the

very best products for our users, and what do we

need to do to enable that?

Apple is also dabbling in machine learning in A.I.

A.I. Is going to be critical to humanity, and

it's going to be a critical feature inside of

iPhones. And today, Apple uses A.I.

to make the products work better with organizing

photos, with helping organize emails, and

potentially doing things around text organization.

But for the most part is that the iPhone doesn't

capture the full opportunity.

Far from it when it comes to A.I.

The things in iOS 17 today like, you know, being able

to lift the subject from a photo or advanced

autocorrect, or developing a personal

voice for those at risk of speech loss.

These are incredibly compute-intensive,

intelligent capabilities, but having them happen on

the device again can help preserve that user

privacy.

The way that people use their iPhones is going to

be very different than it is today.

Imagine having this concept of a personal

assistant, even though we haven't heard much about

that from Apple, I suspect that that's going

to be an important feature and function and

use case for the iPhone in the decade ahead.