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Business

As iPhone turns 10, smartphones grow into $600bn industry

Ubiquitous devices spawn ride-hailing, other new businesses

LAS VEGAS, U.S. -- In the decade since Apple introduced the iPhone in this city on Jan. 9, 2007, smartphones have grown into a $600 billion business. The handsets have become an indispensable part of many people's lives, serving as video players and internet-connected personal computers, while new services such as mobile payment apps capitalize on the evolving technology.

New businesses, opportunities

Though the handset market has begun to mature, smartphones continue to spark new businesses. Ride-hailing offered by U.S. company Uber Technologies is just one service that became possible due to the popularity of smartphones.

Customers hailing a ride with the Uber app are prompted on rare occasions to send text information because the driver cannot hear. The customer's GPS-derived location is displayed automatically on a map on the driver's smartphone. Customers input destinations on their smartphones, so Uber drivers can work even if they cannot talk.

Smartphones thus have allowed Uber to open up employment opportunities for deaf and partially deaf individuals. Some 70% of these 37 million people in the U.S. are out of work.

When the iPhone hit the market in 2007, it was basically a cellphone combined with a music player. But as semiconductors became smaller and more powerful, the smartphone began to devour the markets for PCs, digital cameras, car navigation systems and portable game systems.

Apple founder Steve Jobs, who died in 2011, realized that chips were the key to improving the iPhone's performance. He handled chip design in-house, laying the foundation for the iPhone to steadily evolve every year. More than 1 billion iPhones have been sold.

Apple's success spurred many other companies to create their own smartphones. The market totaled $420 billion for handsets and $88 billion for apps in 2016, German research company Statista says, while eMarketer of the U.S. predicts that the global mobile advertising market surpassed $100 billion in 2016. The smartphone economy is even larger when including services not counted in these statistics, such as ride-hailing and e-commerce.

Having become the leading information technology device among consumers in the past decade, smartphones continue to change how people work and live. Salesforce.com CEO Marc Benioff uses his smartphone for all basic tasks when out of the office, such as replying to emails and viewing documents. Benioff said he does not use PCs because his clients' work revolves around smartphones.

What's next? 

The growth of services that employ artificial intelligence eventually could threaten the dominance of smartphones.

Amazon.com's Echo is an AI device that allows the use of voice commands to control home appliances, such as audio equipment and lighting. The cloud-connected device also can search for music, read the news and answer questions put to it. Sales of the device have topped 5 million units, and one selling point is that Echo lets users control devices in the home without needing smartphones.

U.S. startup Brain of Things has developed a so-called smart home that employs AI. When the resident comes home, the curtains open automatically and the front door unlocks. By working with a real estate company, Brain of Things aims to sell 20,000 such homes by the end of this year.

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