This is something of a milestone, the fifth birthday of Apple's iPhone. In those few years it's managed to clock up some $150 billion in revenue and sell some 250 million units.
Since the iPhone's launch in June 2007, Apple has generated cumulative revenues of $150 billion, according to Strategy Analytics. Neil Shah, senior analyst at Strategy Analytics, told CNET in a phone conversation today that the number only includes hardware sales. Accessories, apps, and software and services, which typically represent 3 percent to 5 percent of Apple's iPhone revenue each quarter, were factored out.
Moving on to hardware units, Strategy Analytics said that 250 million iPhones have shipped globally.
There's two points I find interesting about this: the first is the incredible speed with which the product took off. To a reasonable level of accuracy the iPhone was the first real smartphone, establishing itself, if not as the very first to be released, as the poster child for this entirely new market segment. And as we've said here before the smartphone seems to be the single fastest technology to disseminate ever. The penetration of the marketplace just hasn't been done faster than this by anything.
The second point that interests me is that while Apple has received that amount in revenue that's not quite the same number as what consumers have been paying out of pocket for the hardware. For the airtime providers heavily subsidise the handsets to consumers, aiming to recoup that money through the charges for airtime. That subsidy can be as much as 50% of the price to Apple of the iPhone.
I am unconvinced that the next 5 years are going to be quite as productive though. I have a feeling that margins will shrink a Android and other operating systems proliferate. It's not so much that they will take market share, it's rather that with the greater choices available to them the airtime providers are likely to try and negotiate that discount they have to apply on the iPhone down.
It's an interesting example of the most basic point about business. Profits always flow to the person who has the scarce resource. With the iPhone it has been Apple. It will still always be Apple with the iPhone, but that's now one of a number of competing smartphones, not entirely unique any more.
