The iPhone: What We Didn’t Know We Wanted

At the end of June, in 2007, we were first able to buy the Apple iPhone. Now, 15 years later, it had an impact that few people expected.

Let’s take a look.

The Impact of the iPhone

Before the iPhone, there was the Blackberry. I can recall that I had a Palm. (I am not sure what it did.) The iPhone created a stir that was reflected by the long lines outside Apple Stores.

The lines were said to have boosted sales:

Because every existing device had a keyboard, Apple worried that we might find it odd to type on a screen. But soon, they noticed that users found it tough to put their new device down. And then they gave us more to look at and listen to.

The next year Apple added the App Store. As economists we can say that the margin took a giant leap. Suddenly countless experiences entered our lives with just a tap. Apple execs said they thought they would start out with 50 apps. It turned out to be 500. By April 2009, weekly, 25,000 apps were being submitted and reviewed.

Kids’ App bills surprised parents. One dad got a $450 invoice for his 5-year old’s Smurfberries. (Because the father was an on the iPhone development team, he added the “Mylie Rule” which led to a password for purchases.)

By 2010, we got the camera and the potential for selfies. But they did not quite expect the selfie surge. They also might not have known what they were doing to us when they designed notifications beeps.

By 2014, larger screens let us do even more and then longer life batteries let us hassle less.

Our Bottom Line: Externalities

The iPhone created a slew of good and bad, positive and negative externalities. Defined as the impact on a third party of a decision, an event, a contract between two other individuals or businesses, typical positive externalities are created by vaccines. As a result, even people who did not receive the Covid-19 shot or a flu shot are healthier. Then, for a negative externality, we can name the impact of pollution and the illness a polluted waterway can given a distant individual.

With iPhones, a downside has been more traffic accidents from inattention but we also can complete tasks much faster. And to all of this I would like to add how the disappearance of one hard line phone in a home (happily) eliminated the need for me to talk to everyone who called.

Please let me know what you would add to the list of unexpected externalities.

My sources and more: This WSJ article started me thinking about the externalities created by the iPhone.