June 22 (Bloomberg) -- On June 29, 2007, the first iPhone went on sale. The Apple Inc. device benefited from breathless advance buzz and also had its skeptics: It cost $600 and had no physical keyboard, limited e-mail options and no copy-and-paste.
In hindsight, it was dumb to bet against Steve Jobs & Co. Apple has since sold more than 217 million iPhones worldwide and sparked a commercial, cultural and -- most surprising -- behavioral revolution, Bloomberg Businessweek reports in its June 25 issue.
According to a study of medical workers at the Baystate Medical Center in Springfield, Massachusetts, 76 percent said they’ve experienced “phantom vibration,” that insistent buzz from an imagined text or phone call. Scientists speculate it’s the result of random nerves firing, biochemical noise that our brains tuned out until they were reconditioned by the iPhone.
“The iPhone has changed everything about how we relate to technology, for both good and bad,” said Larry Rosen, a psychologist and professor who is the author of “IDisorder: Understanding Our Obsession with Technology and Overcoming Its Hold on Us” (Palgrave Macmillan, 2012). According to his research, almost 30 percent of people born after 1980 feel anxious if they can’t check Facebook Inc.’s website every few minutes. Others repeatedly pat their pockets to make sure their smartphones are still there.
Indulging those tiny, persistent urges brings us only a brief respite.
“The relief is not pleasurable,” Rosen said. “That’s the sign of an obsession.”
Obsessions aren’t all bad for everyone, and this one has been profoundly good for Apple and its partners. The Cupertino, California-based company’s revenue climbed to $108.2 billion in fiscal 2011 from $24.6 billion four years earlier. Apple’s stock price today is more than four times as high as on the day the first iPhone went on sale. Samsung Electronics Co., Foxconn Technology Group, AT&T Inc. and other partners have all enjoyed some of the windfall.
Apple has paid more than $5 billion to application developers and created a mobile marketplace that enables a startup such as Instagram Inc. -- which Facebook has agreed to buy -- to go to a $1 billion valuation from zero in 18 months. Even though the pie is growing, some have been squeezed out: In the quarter the iPhone was introduced, Nokia Oyj and Research In Motion Ltd. earned a collective $2.7 billion on their handsets. Now RIM is exploring strategic options with bankers, and Nokia recently announced another round of job cuts.
The App Store’s 650,000 offerings help people massage Excel data on the go, monitor their blood sugar and entertain their kids. More subtly, the iPhone’s tremendous commercial success has made “user-centered design” a buzz phrase in business.
Before the iPhone, most tech products were designed to appeal to the engineers who made them and cost-conscious IT managers.
Think back to July 28, 2007, when most of the people using smartphones were white-collar fans of Research In Motion’s “Crackberry:” While the BlackBerry led to phantom vibrations in some users, it was more complicated and harder to use. The first iPhone arrived with a “manual” that ran only a few pages. Its Jobsian focus on beauty and simplicity has influenced countless products and services, from Jawbone’s minimalist audio gear to Dropbox Inc.’s easy file-sharing.
Until now, the cost side of the iPhone equation hasn’t received much attention. That’s starting to change. The latest iPhone-inspired cottage industry has nothing to do with old-timey photo filters. It’s books that examine the device’s biological and societal effects.
In addition to Rosen’s “IDisorder,” there’s Gregory Jantz’s “Hooked: The Pitfalls of Media, Technology & Social Networking” (Siloam, 2012) and James Steyer’s “Talking Back to Facebook: The Common Sense Guide to Raising Kids in the Digital Age” (Scribner, 2012). While much of these authors’ concern focuses on social media, the smartphone is what lets people stay constantly connected.
“The great thing about the iPhone is that we carry it with us all day long,” Rosen said. “The bad part is that we carry it with us all day long.”
That makes people lab rats in a real-time psychological experiment that’s altering behavior at lightning speed. Centuries after Gutenberg pioneered movable-type printing in Europe in the 1400s, literacy remained a rarity. By 2016, Cisco Systems Inc. expects there to be more mobile devices than people.
Thanks to the ubiquity of smartphones, many museum-goers “skip the step of actually looking at the artwork and move straight to photographing,” said Elizabeth Broun, director of the Smithsonian American Art Museum in Washington. Storm-chasers have been emboldened by mobile weather maps and are a scourge to rural police departments, who must deal with their arrival during general evacuations, said Edward Tenner, a technology historian.
For every feel-good story about an autistic child lighting up at the sight of a new app, there’s a story like that of actor Alec Baldwin getting kicked off an American Airlines flight for refusing to quit his “Words With Friends” game.
The big question: Is the iPhone a “bicycle for the mind,” as the late Jobs said about the first Mac, or a crutch that does too much of our thinking for us and increasingly takes the place of real human connections? The answer may clarify as the devices get more powerful and more intrusive.
Future generations of the iPhone “will gently nudge you to help you do the things you want to do,” said Bob Borchers, a venture capitalist with Opus Capital, who used to run iPhone marketing for Apple. “Why couldn’t the phone know that I want to be more fit, so the next time I have 15 minutes of spare time, Siri could say, ‘Do you want me to set aside this time for you to work out?’”
Whether that vision inspires you or creeps you out, there’s one very big check on the revolution wrought by the iPhone: The capped data plan. Phone companies have been ditching all-you-can-eat plans and forcing users to pay for bandwidth as they go.
Craig Moffett, an analyst at Sanford C. Bernstein & Co., said that in this year’s first quarter AT&T wrote bigger checks for Apple -- $3 billion worth -- than it did for investments on its own network. In the end, we may not be the ones to decide the costs of detox.
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