Apple's iPhone turns 10,
bumpy start forgotten
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[June 29, 2017]
By Stephen Nellis
(Reuters) - Apple Inc's iPhone turns 10
this week, evoking memories of a rocky start for the device that ended
up doing most to start the smartphone revolution and stirring interest
in where it will go from here.
Apple has sold more than 1 billion iPhones since June 29, 2007, but the
first iPhone, which launched without an App Store and was restricted to
the AT&T Inc network <T.N>, was limited compared to today's version.
After sluggish initial sales, Apple slashed the price to spur holiday
sales that year.
"The business model for year one of the iPhone was a disaster," Tony
Fadell, one of the Apple developers of the device, told Reuters in an
interview on Wednesday. "We pivoted and figured it out in year two."
The very concept of the iPhone came as a surprise to some of Apple's
suppliers a decade ago, even though Apple, led by CEO Steve Jobs, had
already expanded beyond computers with the iPod.
"We still have the voicemail from Steve Jobs when he called the CEO and
founder here," said David Bairstow at Skyhook, the company that supplied
location technology to early iPhones. "He thought he was being pranked
by someone in the office and it took him two days to call Steve Jobs
The iPhone hit its stride in 2008 when Apple introduced the App Store,
which allowed developers to make and distribute their mobile
applications with Apple taking a cut of any revenue.
Ten years later, services revenue is a crucial area of growth for Apple,
bringing in $24.3 billion in revenue last year.
Fans and investors are now looking forward to the 10th anniversary
iPhone 8, expected this fall, asking whether it will deliver enough new
features to spark a new generation to turn to Apple.
[to top of second column]
pple Computer Inc. Chief Executive Officer Steve Jobs holds the new
iPhone in San Francisco, California January 9, 2007.
REUTERS/Kimberly White/File Photo
That new phone may have 3-D mapping sensors, support for "augmented reality"
apps that would merge virtual and real worlds, and a new display with organic
LEDs, which are light and flexible, according to analysts at Bernstein Research.
A decade after launching into a market largely occupied by BlackBerry and
Microsoft devices, the iPhone now competes chiefly with phones running Google's
Android software, which is distributed to Samsung Electronics <005930.KS> and
other manufacturers around the world.
Even though most of the world's smartphones now run on Android, Apple still
garners most of the profit in the industry with its generally higher-priced
More than 2 billion people now have smartphones, according to data from
eMarketer, and Fadell, who has worked for both Apple and Alphabet, sees that as
the hallmark of success.
"Being able to democratize computing and communication across the entire world
is absolutely astounding to me," Fadell said. "It warms my heart because that's
something Steve tried to do with the Apple II and the Mac, which was the
computer for the rest of us. It's finally here, 30 years later."
(Reporting by Stephen Nellis; Editing by Peter Henderson)
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