July 2, 2017 5:15 pm JST

The iPhone at 10: The device that launched a thousand industries

Apple's mobile brainchild has given rise to entire new businesses

KAZUYUKI OKUDAIRA, Nikkei senior staff writer

In its 10 years, the iPhone has changed far more than just the mobile phone industry. © Reuters

TOKYO -- Apple's iPhone has become a cradle for entire new industries in its 10 years in people's hands, bringing features like mobile internet connectivity and cameras into everyday lives and upending traditional orders of business.

In January 2007, the late Steve Jobs -- then Apple's renowned CEO -- told a San Francisco tech conference he had three products to introduce: a portable music player with touch controls, a "revolutionary" mobile phone, and a "breakthrough" internet communications device. He strung the crowd along for a moment, repeating the three products, then: "Are you getting it? These are not three separate devices. This is one device, and we are calling it iPhone," he finished to waves of applause.

The announcement, for all its quintessentially Jobsian theatrics, foreshadowed what was to come. Smartphones, the iPhone included, have eaten away one by one at the markets for portable music players, traditional cell phones and the personal computers that once dominated internet use.

Tech-tonic shift

Worldwide PC shipments have slid to 269 million units in 2016 from a 2011 peak of 365 million, according to U.S. market researcher Gartner. Companies that once led the PC and software markets, such as Microsoft and Intel, have seen their presence ebb in the stock market.

More than 1.4 billion smartphones shipped worldwide in 2016, and just over 200 million of those were Apple products. Nearly all the rest used the Google-made Android operating system. This heavily consolidated, massive platform has been fertile ground for new industries.

Facebook, the social networking megalith, has made heavy use of smartphone features like cameras and location data to expand its base, reaching more than 2 billion monthly users. Services such as ride-hailing and mobile payment would not exist without smartphones, portable and able to provide personal authentication.

One company that owes its rise to smartphones is Japan's Mercari, which is credited as the country's first "unicorn," an unlisted startup whose market value surpasses $1 billion. Mercari, which runs a person-to-person online goods marketplace, has seen its app pass 75 million downloads. Chairman and co-founder Shintaro Yamada has said he would never have thought to form the company if not for smartphones and their user-friendliness.

Hardware haven

The parts and factories needed for smartphones' huge production scale have themselves given rise to new platforms. China's Shenzhen -- home to an iPhone contract production plant for Taiwan's Hon Hai Precision Industry, better known as Foxconn -- features a huge electronics quarter in the vein of Tokyo's famed Akihabara, with lines of stores selling electronic components.

A host of startups developing and manufacturing drones, seen as the drivers of another new industry, are drawing eyes in Shenzhen right now. The location gives them easy access to cheap parts and plentiful factory space, both products of smartphone mass production. One district is said to hold 300 such companies jostling together, and it was here that DJI, the global leader with a 70% market share for civilian drones, was born.

"You can order the parts you need at night and receive them the next morning," says a DJI executive, "so you can develop new products quickly."

Drone businesses across the globe are feeling the pressure to either compete or make nice with DJI and its Shenzhen brethren. Many face the pressing question of how to handle a competitive environment redrawn by the iPhone and smartphones as a whole.

Asia300

Hon Hai Precision Industry Co., Ltd.

Taiwan

Market(Ticker): TAI(2317)
Sector:
Industry:
Electronic Technology
Computer Peripherals
Market cap(USD): 67,038.5M
Shares: 17,328.73M

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