How the iPhone has been a boon for the U.S. economy
Published: Tuesday, September 25, 2012
Updated: Tuesday, September 25, 2012 20:09
The release of the iPhone 5 this past weekend marks five years since the launch of Apple’s smart phone back in 2007 that arguably kicked off the smart phone revolution. Nowadays, the iPhone faces stiff competition from Android phones, but there is still a quality that is unmatched in the iPhone. More than any device in recent years, the iPhone single-handedly provided a boost to the economy, while creating a smaller economy around itself.
The first and most obvious way the iPhone helps the economy is through its sales. Since its introduction, the different iterations of the iPhone have sold 244 million units. Those sales numbers look to continue upwards with the iPhone 5. According to JP Morgan, it is reported to increase GDP by 0.3%, which is significant considering it is a single device from one company.
However, the iPhone and a lot of other devices receive criticism for hurting the economy by manufacturing jobs overseas. It is a valid point that outsourcing hurts the American economy, but critics often overlook the other avenues in which the iPhone creates jobs. One of these avenues is the app store. Apple’s marketplace of mobile apps and games for the smartphone grew exponentially. The company already gave out $1 billion in royalties to their app developers, solely from the sales of apps. This excludes advertising or in-app purchases. Without the app store, companies like Rovio Games and success stories like Draw Something wouldn’t exist. Although not every app is a booming success, but 90% of the current 700,000 available apps are downloaded every month.
Everyone that owns an iPhone has had some interaction with the app store, but they’ve also probably had interaction with another facet of the iPhone economy, the accessories. There are a variety of iPhone accessories available. Whether it’s just a case or a speaker system, iPhone owners made the iPhone accessories market worth $2-3 billion last year. Like the app store, this allows third parties to enter into the iPhone economy and design different cases, speakers, headphones and other smart phone compatible products. And thanks to the iPhone 5, these third parties will be revitalized. Due to changes to the iPhone’s design and dock connector, consumers will need new cases and new accessories compatible with the iPhone 5 (unless they choose to purchase Apple’s adapter). This facet should continue to grow as analysts predict the iPhone accessories market will grow to about $5-6 billion in the next three years.
Even the hype of the iPhone helps the economy. It earns Apple and any other company related to the phone’s production free publicity and also the occasional boost in their stock prices. On the other side of things, the iPhone provides plenty of traffic for tech blogs across the web. That, in turn, brings in traffic revenue. From experience, one of the sites I write for covers iPhone and Android news. To give you an idea about the effect of the hype, through writing about it for a tech site, I’ve learned that iPhone articles brought in substantially more traffic, which resulted in more money in my pocket.
At the key of any economy is innovation. Companies like Square would have never been started without the iPhone. And while it isn’t the sole source of innovation, the popular crowd funding site Kickstarter wouldn’t have reached the popularity it has now. The first major successful project for Kickstarter that brought it to the mainstream was the Pebble. The project was a watch that linked to and allowed you to control your iPhone. It received over $10,000,000 in funding after originally asking for $100,000. This sparked a boom of innovative ideas on the platform ranging from new iPhone cases, camera lens adapters, foldable keyboards, and plenty of other ideas.
Only some of these ideas will go on to create businesses. The employees of these businesses, the revenue that is brought, and the innovative opportunities available all owe their existence to the iPhone. More than any modern device, the iPhone has created multiple means of adding a boost to the economy and it is a good thing that Apple decided to do “one more thing.”