The iPhone Turns 15: How The Breakthrough Product Changed Apple's Fortunes

It has been exactly a decade and a half since, Apple, Inc.'s AAPL charismatic cofounder Steve Jobs announced the company's flagship product – the iPhone – at the 2007 keynote event.

While announcing it on Jan. 9, 2007, Jobs termed it as a revolutionary invention that combines three products, namely a mobile phone, a widescreen iPod with touch controls, and a breakthrough Internet communications device with desktop-class email, web browsing, searching and maps.

iPhone Over The Years: Since its introduction, the iPhone has gone through several iterations and transformations. The original iPhone was much smaller with a 3.5-inch LCD display, a plain Home button, a thick chassis, huge bezels, a Samsung processor and a 2-megapixel camera. The first-gen iPhone, released in the U.S. on June 29, 2007, was priced at $499 for the 4 GB model and $599 for the 8 GB model.

The product soon added 3G capability, as the iPhone 3G was announced a year later in June 2008. The iPhone 3GS, which was twice as fast as the previous iteration and less expensive, was launched in 2009. Apple followed it up with the iPhone 4 in June 2010, iPhone 4S in 2011 and iPhone 5 in 2012.

In 2013, the company launched the iPhone 5S/5C, which was armed with the 64-bit A7 SoC, Touch ID and new motion data processor. The iPhone 6 and iPhone 6 Plus were announced in 2014, which came with NFC tech support via Apple Pay. This was followed by the launch of the iPhone 6S/iPhone 6S Plus in 2015.

Apple unveiled the iPhone 7/iPhone 7 Plus in 2016. The company announced three new iPhones the following year. The iPhone 8/iPhone 8 Plus/iPhone X were all released in 2017. The iPhone XR, XS, XS Max were announced in 2018 and the next iteration named iPhone 11 was released in 2019, with three variants the iPhone 11, iPhone 11 Pro and iPhone Pro Max. In 2020, the iPhone 12, iPhone 12 mini, iPhone 12 Pro and iPhone Pro Max were announced. The iPhone 13 iteration, with the same variants as in the previous year, was unveiled in 2021.

How Apple Changed Along With The iPhone: Though Apple has developed a whole ecosystem of hardware products and built up a strong Services business, there is no denying the fact that the iPhone has been central to the company's strong performance.

Ahead of the iPhone launch, Apple's fiscal-year 2006 revenues were $19.32 billion, and the tech giant made a net profit of about $2 billion. Since then, the company's revenues and net profit have swelled, reaching $365.82 billion and $94.68 billion, respectively in fiscal-year 2021 that ended Sept. 25, 2021. Roughly 18.7% of the 2021 revenues were from services and the remaining came from products that also included iPads, Macs, wearables, the Home app and accessories.

In the first-full year following the iPhone's launch, ie in fiscal-year 2008, the product along with related products and services fetched the company $419 million in revenues and accounted for 5.6% of its total revenues. This has increased over the years, and in 2021, iPhone revenues were at $38.87 billion or about 47% of the total revenues.

Apple's shares have also seen strong gains since the product's launch. The stock was priced at a split-adjusted $3.09 on the day of the maiden iPhone announcement, and rose to $3.66 when the first iPhone was released on June 26, 2007. Apple is currently at $172.17, up about 5,500%.

It is the iPhone momentum that briefly took Apple past $3 trillion market capitalization last week.

Although the share of iPhone to total revenues is declining, the success of the rest of its hardware and services hinges on the iconic product. Apple's installed base as of Jan. 2021 stood at over 1 billion. With 5G upgrades is full swing, there is further upside to Apple's iPhones, at least in the near term.

Photo: Courtesy of Sean MacEntee on Flickr

Market News and Data brought to you by Benzinga APIs

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