How a sin­gle prod­uct trans­formed our lives in ten years

The Star Early Edition - - BUSINESS REPORT - Hamish McRae

TEN YEARS ago Amer­i­cans got their paws on the first iPhone – and the world changed. It has cer­tainly changed Ap­ple, pro­pel­ling it to be­come the world’s most valu­able com­pany, with 70 per­cent of its rev­enues from this sin­gle prod­uct.

In­deed it is prob­a­bly the most profitable bit of tech­nol­ogy ever, with some 1.2 bil­lion phones pro­duced. In the year be­fore it was launched, 2006, Ap­ple had $19bn (R248bn) in an­nual sales. In its lat­est ac­count­ing year this had risen more than ten­fold.

It has made so much money for Ap­ple and the com­pany has been so ag­gres­sive in ex­ploit­ing loop­holes in global tax leg­is­la­tion that gov­ern­ments un­der­stand­ably want a big­ger share of the pie.

But this story is not only about money. It is about chang­ing so­ci­ety, the way a sin­gle prod­uct has trans­formed our lives. The iPhone and other smart­phones have made the app world pos­si­ble.

We think of it as nor­mal to be able to bank on our mo­bile phones, and right now around 20 million Bri­tons do so. We think of it as nor­mal to be able FaceTime our grand­chil­dren, nor­mal to pull up a map when we are in a strange city, to look for traf­fic jams. But none of this was re­ally pos­si­ble a decade ago. What­ever view you take of the down­sides of so­cial net­work­ing, not many peo­ple would give up their mo­biles and all the ser­vices on them.

That leads to some­thing big­ger still. Ac­cord­ing to the of­fi­cial stats most of us have seen no rise in our real in­comes over the past decade.

Wages are sup­posed to have stag­nated. For young peo­ple they have fallen in real terms. Yet the young are the most avid users of the new tech­nolo­gies, so how can their stan­dard of liv­ing have fallen?

The prob­lem is how to mea­sure the ben­e­fits of new tech­nol­ogy. Ad­vances nor­mally make things cheaper. For ex­am­ple, as planes be­come more ef­fi­cient, air­fares come down. But the million-plus new ser­vices of the app world did not ex­ist at all, and since many of them are free at the point of use they barely regis­ter in gross do­mes­tic prod­uct. Com­mon sense says we are get­ting richer; we just don’t know how to mea­sure by how much. So while cas­ti­gat­ing Ap­ple’s tax poli­cies, let’s cel­e­brate it for trans­form­ing lives.

And if we can also learn how to use – with a bit more cour­tesy – the new com­mu­ni­ca­tion pos­si­bil­i­ties that the iPhone and its im­i­ta­tors have given us, then that would be worth cel­e­brat­ing too.

It may not be the most plea­sur­able pas­sen­ger ex­pe­ri­ence to go through Gatwick. In­deed it was re­cently ranked as the sec­ond-worst in the world af­ter Kuwait.

In busi­ness terms, how­ever, it is a huge suc­cess: more routes, es­pe­cially long-haul ones; more pas­sen­gers, with more than 43m last year, and more profit.

It is also the busiest sin­gle-run­way air­port in the world, for though there is a standby along­side the main run­way, it is too close to it to be used if the main one is func­tion­ing. The great ques­tion is whether Gatwick should build a proper sec­ond run­way.

It lost out on the third run­way de­ci­sion last year, but two things have changed since the Air­ports Com­mis­sion, led by Sir Howard Davies, did its work.

One is that Gatwick is putting on even more growth than the com­mis­sion ex­pected.

The other is that the pol­i­tics of ex­pan­sion at Heathrow have be­come even more dif­fi­cult since the elec­tion.

The In­sti­tute of Di­rec­tors wants both. Prac­ti­cal­i­ties sug­gest get­ting on with the po­lit­i­cally eas­ier one first.

Car­ney causes chaos

Mark Car­ney has, rather to the ir­ri­ta­tion of foreign ex­change mar­ket an­a­lysts, gone back into his “un­re­li­able boyfriend” mode.

He hinted last week that in­ter­est rates would not need to go up, only to do an about-turn and sug­gest this week they might need to do so.

Cue chaos in the mar­kets, with the pound back around $1.30 af­ter hav­ing its strong­est run for two years.

Two thoughts – one is that the pound is still weak. The other is – what’s wrong with keep­ing the mar­kets guess­ing? Mar­ket-mak­ers are sup­posed to like volatil­ity.

And even cen­tral bankers are al­lowed to change their minds. – Daily Mail


The Ap­ple iPhone, left, and the Ap­ple iPod Touch are shown in San Fran­cisco, ten years ago, when Ap­ple chief ex­ec­u­tive Steve Jobs un­veiled new ver­sions of the com­pany’s ten mar­ket-lead­ing iPod me­dia player, in­clud­ing an iPod Nano with a 2.5-inch screen for watch­ing movies and play­ing games.

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