Apple is currently an iPhone company with ancillary iPad, Mac, and software businesses. Few would have expected the iPhone to not only represent 60% of Apple's overall revenue within a few years after launch, but also transform the mobile industry in the process. Steve Jobs' initial goal was for the iPhone to sell 10 million units (capture 1% of the phone market) in 2008. Six years later, Apple sold 169 million iPhones in 2014 (8% share of a much bigger phone market). With the Apple Watch launch a few months away, one question swirling around is how similar will the wearable device be compared to iPhone in terms of importance and popularity. While Apple may find success in positioning Apple Watch as a way to redefine certain aspects of mobile computing, the iPhone will always be known as the first mobile device that truly changed the world. A quick trip to the mall makes it very clear that the iPhone was different.
Over the weekend I ventured out to do some light shopping. Since it was still early in the morning, I decided to go past my usual turning point in the mall and walk the length of the complex. It was the first time I was seeing the other side of this particular mall in years. While there is always some level of attrition with mall retailers, I was quite surprised to see a series of storefronts that had bucked the trend. Instead of closing or reducing square footage, these stores had a larger footprint, merging a few storefronts, leading to a formidable presence in the mall's upper level. These stores started out as smaller kiosks near the food court, and now they were among the bigger stores in the mall. The growing footprint of these mobile carrier retail stores symbolize how the iPhone was different than other Apple products, riding the much bigger wave known as mobile.
Only 10 years ago, the mobile carriers were selling a few dozen "feature" phones, packed with the latest keyboard innovations. After a few minutes of figuring out how many night and weekend minutes would be acceptable, the new cellphone owner would run to find an area in the mall with good reception (that last part is still true today). With much higher foot traffic on any given day (U.S. smartphone penetration moved from 10% in 2009 to 70% in 2014), mobile carrier stores now serve as places to not only buy a more narrow range of gadgets, but also attend to monthly bills, and receive tech support (including cable and home internet for some). Since I buy my phones online, walking past the much-larger AT&T and Verizon stores in the mall reminded me how mobile computing has matured since the iPhone was introduced. While the iPhone is a great device enjoyed by millions, the mobile rocket it strapped itself to certainly helped drive cumulative sales of more than 550 million iPhones.
Instead of transcending the mobile carriers, new Apple products in the near-term will likely be positioned to supplement the iPhone, improving on the device's initial breakthroughs in mobile. The iPhone was truly different; it only took a short walk in the mall, and a quick glance at the mobile carrier stores, to serve as a reminder.