Five years of iPhone

The 2007 iPhone introduction

Jobs started his keynote with the words, "We're going to make some history together today."

He then spent ten minutes recapping the company's progress in moving to Intel, reviewing the success of iPod and noting that iTunes had just passed Amazon in music sales and was now taking on #3 Target. Jobs then used another ten minutes to detail Apple TV, which the company had offered a sneak peek at the previous September. "Enjoy your media on your big screen TV. We think this is really going to be something special," Jobs said before taking a drink and a dramatic pause.

"This is a day I've been looking forward to for two and a half years," Jobs then stated.

"Every once in a while a revolutionary product comes along that changes everything. One is very fortunate if you get to work on just one of these in your career. Apple has been very fortunate that it's been able to introduce a few of these into the world. In 1984 we introduced the Macintosh. It didn't just change Apple, it changed the whole industry. In 2001 we introduced the first iPod, and it didn't just change the way we all listened to music, it changed the entire music industry," Jobs said.

"Well today, we're introducing three revolutionary new products! The first one is a widescreen iPod with touch controls," Jobs said to applause. "The second is a revolutionary new mobile phone," he added to even more fervent applause. "And the third is a breakthrough internet communications device," to which the audience continued to applaud with less certainty.

"So, three things," Jobs said, repeating each of the three. He then repeated all three again, as his backdrop animated between an iPod icon, a Phone icon and the Safari icon. "Are you getting it?" Jobs asked. "These are not three separate devices! This is one device. And we are calling it iPhone. Today Apple is going to reinvent the phone. Here it is."

iPhone 1.0

The original iPhone took a variety of bleeding edge technologies (including its capacitance screen perfect for touch but incompatible with the standard stylus) and design decisions (such as its full screen display lacking a physical keyboard, trackball, or buttons) that had previously only seen very limited release, and combined them in a package using advanced software that had never before been used in a mobile device.

This gave the iPhone a groundbreaking user interface and overall experience, which coupled with the iPhone's rich and polished apps including Mail and Safari, made the device fun to simply play with and instantly desirable.

At the same time, however, the iPhone lacked a variety of features that were considered standard for a high end mobile device. Apple's deliberate omissions were almost as noteworthy as its unique features. And in each case where Apple dropped an expected mobile feature, it released an alternative obtained from the company's more familiar territory of desktop PCs.

For example, the original iPhone wasn't capable of 3G but instead made wide use of WiFi, something competing smartphones of the day often lacked. The popular Palm Treo offered a $99 WiFi SD Card option, but it wasn't very useful because none of the software on it (including its feeble browser) could make good use of it. Even by the end of 2008 (nearly two years later), RIM was still releasing its BlackBerry Storm on Verizon without WiFi capabilities, clear evidence of the myopic vision of the carriers who controlled the pre-iPhone handset market.

The first iPhone also lacked GPS, but made atonement in the form of WiFi geolocation. Until iOS 3.0, it also lacked MMS, but Apple focused on sending photos via email. While smartphones of the day couldn't handle such attachments, iPhones could interact with the larger population of PC users (who couldn't send or receive MMS either).

The initial iPhone also lacked an SD Card slot for expansion but packed far more storage memory than other phones of the day, making it usable right out of the box. It also lacked the replaceable battery most mobile users had been trained to swap out as needed, but provided advanced power management that limited the need for battery swapping. Additionally, it leveraged the vast market of iPod cables for recharging from USB, a car charger, or within a playback dock.

Jobs also hammered home the advantages of having a "real" web browser, rather than trying to use mobile optimized formats such as i-mode or WAP. Five years after the iPhone, Apple still produces what is indisputably the best mobile browser experience, besting both Microsoft (the former king of browsers), the open source communities of Mozilla and Android (Google doesn't call its moderate-quality mobile browser "Chrome" for good reason), and the former pioneers of mobile apps, ranging from Palm to RIM to Nokia.

Another notable omission of the original iPhone in its first year was a lack of native third party apps. Again, Apple bundled enough high quality first party apps that this failed to become a serious problem for most users. The built in apps on the iPhone were more than equivalent to $454 worth of optional software available for Windows Mobile, for example.

The original iPhone broke into the market by offering standout features in terms of interface usability, hardware design, iPod/iTunes features and "desktop class" mobile applications that were valuable enough to overshadow its initial omissions and drawbacks.

On page 2 of 5: iPhone 3G, iPhone OS 2 and competitors 2007 - 2008

iPhone 3G: iPhone OS 2

For its second year of iPhone, Apple's iPhone 3G adopted a new plastic hardware design that enabled the company to sell it for significantly less. It also added support for two of the most valuable missing features of the original: 3G wireless networking and GPS location.

Apple marketed it as "twice as fast for half the cost." While the new, cheaper hardware enabled Apple to sell to a broader audience, the main new features of the iPhone in 2008 came from its 2.0 software update, which was also made available to original iPhone users.

Most notably, "iPhone OS 2.0" added support for native third party software in addition to basic web apps (above) through the new App Store within iTunes. The kinds of games Apple's new iPhone SDK resulted in were not on the level of previous mobile software platforms.

As an example, Sega's Super Monkey Ball, a popular $10 game for the iPhone in 2008, was at least $20 for the sidetalkin' NGage (Nokia's failed attempt at delivering a hybrid game console and mobile phone), but NGage reviewers still complained, "The choppy animation and lack of analog controls really suck the fun out of the game."

The same game cost $40 on the Sony PSP and $20 on the Nintendo DS. The game's graphics on the iPhone (below middle) were similar to the PSP console version (below bottom) rather than being in the league of other smartphone games of the day, like the NGage (below top left) or the simplified "Super Monkey Ball Tip N Tilt," $10 mini-game version (below top right) that worked on regular Symbian smartphones such as the Nokia N95 (a model once frequently compared to the iPhone).

The second generation of iPhone software also enabled MobileMe push messaging and Exchange ActiveSync support for Mail, Contacts and Calendar along with other enterprise features that made Apple's emerging mobile platform more attractive to corporate users.

iPhone competitors: 2007 - 2008

Apple certainly didn't invent the touchscreen phone; before it, Palm, Windows Mobile and others had delivered PDA-type devices with mobile features. However, the emerging consensus in the market by 2007 was that users wanted BlackBerry-like keypads, a trend followed by the most popular Palm Treo, Windows Mobile and Symbian phones.

LG's Prada smartphone delivered a similar form factor to the iPhone, but used Adobe's Flash Lite to construct a simplistic user interface that lacked any of the rich, animated and desirable aspects of the iPhone. It also lacked a functional web browser, iPod-like functionality, rich email, and so on. After accusing Apple of copying the Prada, LG then began creating a series of lookalike iPhone clones.

After arguing throughout most of 2007 and 2008 that Apple was wrong and what the public really wanted were more button-oriented phones ("that's what all the kinds want these days!") and either a tether to proprietary enterprise systems run by RIM or a promise of an open platform with less security than even Windows, all of Apple's competitors slowly began to roll out devices that looked and worked increasingly like the iPhone, to the point where today, all of the models in the running against the iPhone look like direct copies of the iPhone.

One step along that path attempted to employ Microsoft's Windows Mobile 6.1 platform. At Mobile World Conference in early 2008, Samsung introduced its flagship Omni and Sony Ericsson unveiled its XPERIA X1, with both companies betting that WiMo could help them catch up to the iPhone experience Apple had introduced. They lost the bet.

In late 2008, RIM introduced its touchscreen BlackBerry Storm, which its fans assumed would be like a black iPhone with more serious Enterprise credentials. What they really got was a terrible phone that wasn't ready for prime time, oddly lacking support for even basic features such as WiFi. The phone signaled the beginning of the end for RIM, which saw its dominant position among Verizon smartphones rapidly whither away in favor of Android in 2010, and then the iPhone itself last year.

Around the same time, Google and HTC collaborated to deliver the T Mobile G1, a keyboard-based phone patterned after the Danger Sidekick. The phone was rushed to market with such haste that it could not be officially supported even by the next 2.0 version of Android released a year later.

That "lack of foresight in design" trend would continue for Android, as well as with other mobile platforms that systematically abandoned new phones as quickly as they could deliver new updates. At the same time, Android shifted direction dramatically in 2009 to focus on essentially producing iPhone clones.

At CES in early 2009, attention dramatically shifted to the Palm Pre, which claimed that it would best Apple's second generation iPhone 3G and take back smartphone sales for Palm and its new webOS. Instead, just as it launched in June Apple released the iPhone 3GS, a model Apple still sells (and supports in the latest iOS 5). Palm barely remained alive, barely finished its webOS, and after being bought up by HP, even its remaining group didn't survive long enough to see the iPhone's fifth birthday.

On page 3 of 5: iPhone 3GS, iPhone OS 3.0 and competitors 2009 - 2010

iPhone 3GS: iPhone OS 3.0

Apple's third iPhone didn't dramatically change its form factor, but did enhance its internal components, adding a faster ARM Cortex-A8 processor and PowerVR SGX 535 graphics core, 256MB of RAM, a more competent 3 megapixel camera with video recording features, a digital compass and improved 7.2 Mbps HSDPA 3G wireless features.

In software, iPhone OS 3.0 added support for three features being held out at the time as conspicuous omissions: copy/paste, MMS picture/data messaging, and support for tethering. Apple made the software available to all iPhone users, but for the first time, it became obvious that Apple could deliver a software solutions that mobile carriers might not immediately be able to support. AT&T didn't support MMS for months, and it took nearly a year before the carrier enabled support for data tethering from iPhones, even though both features had been widely supported on the carrier's network for other phones.

While Apple was enjoying a network effect of snowballing sales, the flip side was that so many people were buying iPhones that it was changing the market itself; AT&T struggled to keep up with the iPhone's advancement, because adding a new feature on the iPhone meant supporting it across a growing army of millions of iPhone users.

Apple also introduced an array of accessibility features for the iPhone 3GS, as well as introducing system wide Spotlight search (a key feature promoted by Palm's webOS), a new push notifications system for third party developers that borrowed the same functionality and technology supporting Apple's own MobileMe push messaging features introduced the prior year, the CalDAV calendaring standard and 1,000 new APIs for developers.

iPhone competitors: 2009 - 2010

Just after Palm introduced its new webOS Pre, Microsoft began teasing Windows Mobile 6.5, presenting it as a credible platform with a new app launcher (creatively rethinking Apple's square grid of icons and replacing it with a fresh, staggered honeycomb arrangement!) and a rival new app Skymarket just like the iPhone's.

Microsoft also announced a new partnership with LG to promote WiMo 6.5, largely because its former supporters Samsung and Sony Ericsson had all but abandoned the platform. Instead of continuing to use WiMo 6.x to take on the iPhone, Samsung introduced its 2009 Omni HD running Nokia'a Symbian, while Sony Ericsson similarly picked Symbian to power its new high end Idou. Nokia itself continued focusing on button-oriented phones as its smartphone sales rapidly began to slip. It was also working to spin its aging smartphone platform off into the open source Symbian Platform.

By the end of 2009, carriers led by Verizon had given up on Palm or Microsoft or RIM delivering a credible iPhone competitor, and jumped to support the new Android 2.0, ushered in by the Motorola Droid and Verizon's 2010 multimillion dollar Droid branding exercise. Android was now being linked to the leading edge of mobile hardware, supporting new chips, cameras and display resolutions that made the previous year's iPhone 3GS look plain and old-fashioned in comparison.

After a year of failure in pushing Windows Mobile 6.5 and its app market, Microsoft began seeding news of its next platform, the incompatible new Windows Phone 7. It would be available in another year, a vaporware record it replayed over and over across the iPhone's five years of existence.

On page 4 of 5: iPhone 4, iOS 4.0 and competitors 2010 - 2011

iPhone 4: iOS 4.0

In the middle of 2010, Jobs unveiled iPhone 4 as an entirely new hardware design, using a much faster processor Apple branded A4, along with twice the memory, a gyroscope, an industry leading ultra high DPI Retina Display, a very high quality mobile camera with flash and a front facing video conferencing camera. Apple's iPhone suddenly jumped from trailing most high end smartphones in features to besting them across the board.

In addition to just launching new hardware, Apple's newly named iOS 4.0 took full advantage of the new hardware, adding easy to use FaceTime features, full support for the new high DPI display, and adding new multitasking features for quickly switching between apps and support for running specific background services without killing battery life. The new release supported previous iPhones dating back to the second generation.

iPhone 4 stoked enormous demand after its release. As an engineering effort, it was impressive just from the standpoint of being launched months after the brand new iPad, which itself was a major engineering development and a massive operational undertaking. The new iOS 4 incorporated a variety of features that had been introduced earlier on the iPad.

While iPad was outselling every Tablet PC sold in the previous decade within its first few months on sale, iPhone 4 was erasing the trajectory of Verizon's Android surge.

iPhone 4 competitors: 2010 - 2011

Verizon's 2010 Droid campaign got off to a dramatic start, but quickly lost momentum as iPhone 4 began hitting the market. That promoted Verizon to rethink its Android-centric strategy within the same year. Verizon first signed up to carry the iPad, and within a few more months, expanded its relationship with Apple to include iPhone 4.

CES and MWC 2011 launched a variety of multicore smartphones capable of new 4G LTE services. However, Apple didn't simply match theses "beginning of the year" announcements as it had in the previous two years. Instead, the company focused on the new iPad 2, which carried a multicore A5 chip. Google also focused on the iPad, devoting its Android 3.0 Honeycomb release to enable a viable iPad competitor among its licensees.

While trying to find buyers for WP7, Microsoft also focused on tablets, promising a variety of new Windows 7 devices just as it had prior to the iPad a year ago, in its Slate PC partnership with HP. That plan had quickly collapsed; HP subsequently responded to the iPad by buying Palm, ostensibly to deliver a new series of webOS powered smartphones but also to deliver a new tablet competitor.

RIM also focused on tablets with its PlayBook, while delaying enhancements for its BlackBerry smartphones until multicore chips were available to let its smartphones run the same OS as its new tablet.

With so many iPad competitors jostling for a piece of the market Apple had defined a year earlier, there was little focus on competitors' response to iPhone 4. Rather than gaining tangible new features, Android licensees began focusing on big displays, NFC "tap to buy" features and 4G connectivity, despite limited availability of 4G networks and the nascent technology's power hungry ability to discharge the mobile device's battery even while plugged in to a car charger.

HP's webOS, RIM and WP7 all focused just on finding users, but all three lost significant marketshare while Apple continued selling iPad 2 and iPhone 4 as quickly as it could make them.

On page 5 of 5: iPhone 4S: iOS 5.0 and competitors 2011 - 2012

iPhone 4S: iOS 5.0

For its its fifth year of iPhone, Apple launched iPhone 4S, an improved version of the iPhone 4's overall design with a much faster A5 processor borrowed from the iPad, improvements to its camera, 14.4Mbps HSDPA and new support for 1080p HDMI or VGA output or 720p wireless AirPlay.

In software, Apple added a variety of features including iMessage for automatically sending text and multimedia messages via WiFi, Newsstand for delivering subscription content, a new Notification Center for managing local and remote push alerts, and support for Apple's new iCloud services, as well as PC Free setup and configuration.

Exclusive to iPhone 4S is Apple's new Siri voice assistant, which adds intelligent responses to spoken requests as a secondary natural user interface, next to the iPhone's pioneering multitouch interface. Siri can search the web and translate voice to text, but more importantly serves as a way to interact with calendar items, messages, reminders and notes.

The introduction of the iPhone 4S also enabled Apple to sell three models of iPhones differentiated by price and features: essentially the last three generations of iPhone models. That ability erases competitor's options to easily develop low end models to compete with the iPhone on price, as Apple now has popular older models it can sell paired with its latest software, something Android's model ironically doesn't support.

The future of iPhone competitors: 2011 - 2012

After a year on the market, Microsoft has found it nearly impossible to find interest for WP7 among consumers. At the beginning of 2011, Nokia announced that it would be dumping its own Meego and Symbian platforms to focus on a new joint venture with Microsoft, although it noted that the fruits of its efforts wouldn't be ready for nearly another year. Microsoft also has parallel efforts in place to launch Windows 8 as a viable PC and tablet platform, which is also a year away.

RIM is now in a similar predicament to where Microsoft was a year ago, facing delays in getting its new PlayBook operating system to work on its smartphones, and reportedly eying plans to license the software to third parties for production.

After largely wasting 2011 on failed tablet-oriented efforts with Honeycomb, Google has delivered Android 4.0 as its unified smartphone/tablet version of its 2011 efforts, but it is not making it widely available in a way most existing Android users can download and install. Instead, it's leaving it up to manufacturers and carriers to do the work needed to make its raw code work on existing devices, an expensive effort few are excited about undertaking. Meanwhile, Amazon has derailed Google's tablet aspirations with the Kindle Fire, which like the Barnes & Noble Nook, uses a year old version of Android 2.3 to deliver a customized, incompatible, closed tablet platform.

The most successful iPhone competitor has been Samsung, which like Sony Ericsson, has now adopted Android as its primary platform after ditching WiMo and Symbian. Unlike Sony Ericsson, Samsung has actually experienced significant sales growth from Android. Samsung's performance seems to have more correlation to the company's "slavish copying" of Apple than its use of Android, because other major Android licensees haven't experienced the same dramatic growth. In fact, a variety of top Android licensees failed to regularly break even in 2011, a serious problem when considering the historical profitability associated with building and selling smartphones.

This year, competitors are hoping to coast on the differentiations they introduced last year: more processor cores and 4G LTE wireless service. Apple, however, has the option to simply match their efforts, because there's nothing proprietary or unique about obtaining the latest ARM chips or 4G support.

Once that happens, iPhone competitors will again be looking for new differentiated features while Apple continues to sell a quarter of the world's smartphones and earn the majority of the market's revenues and profits.