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

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.