THE IPHONE AT 5: The Most Successful And Disruptive Product In History

iphone 4s angle 400The destroyer of companies. The most profitable product in the world.

Photo: Ellis Hamburger, Business Insider

Well, it’s official.Five years ago today, Apple launched the iPhone.

Today it seems safe to say that never in history has a single product been so astoundingly successful so fast and had such a radical impact on the world.*

As Marc Andreessen said on Charlie Rose last night, the iPhone isn’t a “phone.” It’s a super-computer in your pocket. And it launched a mobile revolution that is changing the world.

Although the iPhone’s astonishing impact and success seems obvious now, it wasn’t then.

Microsoft’s Steve Ballmer was only one of many observers who dissed the iPhone way back then–and he is presumably the one who regrets it the most.


In case you missed them earlier in the week, here are few highlights:

  • Five years ago, the iPhone didn’t exist. It now generates nearly $25 billion of revenue per quarter, or $100 billion per year. That is, in a word, staggering. The iPhone alone is now a bigger business than most companies on earth.
  • The iPhone business is now bigger than Microsoft. Yes, you read that right–“bigger than Microsoft.” A single product that didn’t exist five years ago is now bigger than the 30-year old company that was once considered so all-powerful that the government intervened to try to break it up. Back in 2007, Steve Ballmer predicted that the iPhone might capture 2%-3% of the global phone market and that Microsoft would get 60%-80%. Oops.
  • The iPhone business likely now generates at least $30 billion of profit per year (profit!). That’s more profit than just about any other business on earth. It’s more profit than GE generates (all of GE). It’s more profit than Microsoft generates. It’s more profit than Google generates. It’s more profit than Walmart generates. It’s almost as much profit as Exxon-Mobil generates!
  • The iPhone has destroyed at least three huge companies in the past 5 years, and has deeply wounded several others. Thanks to the iPhone, Palm is toast. Research in Motion is toast. Nokia is toast. Microsoft is reeling. Formerly dominant global hardware makers like HP and Dell are reeling. The whole PC-industrial complex is reeling.
  • The iPhone has created an entirely new industry and ecosystem, one that has unleashed dozens of ubiquitous applications that were inconceivable five years ago. From photos to communications to connectivity to games, the iPhone has, literally, changed tens of millions of people’s lives. And it has created jobs and careers for hundreds of thousands of developers, designers, and other professionals.
  • The iPhone has inspired half-a-dozen huge, strong competitors, but, so far, it has stayed a step ahead of all of them. The closest challenger, Samsung, just released a phone (the Galaxy S3) that makes the iPhone look puny, but that challenge is only increasing the hope and expectations about the iPhone 5 this fall.
  • The iPhone has made Apple the most valuable and profitable company in the world. This staggering accomplishment is all the more shocking considering where Apple was 15 years ago: Left for dead on the side of the road.

In short, it seems reasonable to suggest that the iPhone might be the most radically successful and disruptive product in history.

Well done, Apple! Happy birthday, iPhone!

*UPDATE: Several readers have suggested that “the wheel,” “the cotton gin,” “the computer,” and several other products are more disruptive and successful than the iPhone. To which I say… yes, but not in 5 years.

chart of the day, apple revenue by product, april 2012

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