The iPhone Turns 5. Here’s What It Wrought.

Friday is the fifth anniversary of the sales debut of the iPhone, the phone that changed everything. Love it or hate it, Apple’s touch screen handset has made an impact on some aspect of your life — whether it’s how you work, communicate with friends, plan your day or read the news.

What follows is a quick reflection on the two major markets that the iPhone disrupted.

The phone industry: Perhaps Steve Jobs’s most significant feat was somehow persuading AT&T to let Apple design the iPhone — both its software and hardware — without even letting the carrier touch it.

That was a break from the old tradition, in which carriers issued specific instructions to manufacturers and software makers about what would be on a phone. By asserting its authority over the iPhone, Apple was able to design a handset for the customer, not the carrier. It delivered a miniature Internet-enabled computer that was extremely easy to use.

The iPhone originally cost $500 with a two-year contract, which made some people, like Microsoft’s leader, Steven A. Ballmer, laugh at it. But when the handset’s price dropped to $200, people began taking it more seriously. Google and its hardware partners soon introduced handsets with Android software, which had a Web browser and touch screen interface similar to the iPhone’s. Other rivals like Palm, Research in Motion and Samsung eventually produced touch screen smartphones to compete as well.

Now, all the phone makers are fighting to win customers’ hearts with the snazziest hardware and software, as opposed to just delivering boatloads of money to the carriers. Apple redefined the phone as a powerful, versatile tool.

The software industry: When Apple introduced its second iPhone in 2008, it opened the App Store, a digital outlet where customers could download apps to expand the capabilities of the handset. The iPhone soon became a digital Swiss Army knife, capable of turning into a game console, a guitar tuner or a video editor with a few app downloads.

Apple made downloading and buying apps extremely simple. All a customer has to do is punch in an iTunes password and hit the download button — something the company had already trained millions of people to do when they bought iTunes music. As a result, a few lucky software developers struck it rich from sales of their apps. Suddenly, being an independent software maker became a viable career, not just a hobby. Many start-ups have formed around making apps.

Before, small software makers relied on a shareware model to market their apps, in which they would offer a stripped-down, free version of their product to entice people to buy the full version. But this strategy was largely overshadowed by major software companies like Adobe or Microsoft with huge marketing budgets and retail partnerships.

The App Store, however, was a digital retail store that gave everyone an equal chance to become discovered. Because the barrier to entry became lower for software makers, smartphones now have access to hundreds of thousands of apps that fulfill people’s needs, hobbies and interests.