Innovation & Wealth › Platforms, mobile & AI
iPhone and the smartphone platform economy
unveiled January 9, 2007· Innovation· Innovations & industries
Well documentedSolid records, texts or physical evidence.
Apple's 2007 touchscreen phone, plus its 2008 App Store, put an internet computer in billions of pockets and launched the app economy.
See it on the Innovation & Wealth map →What happened
Steve Jobs unveiled it on January 9, 2007; it went on sale that June from $499, on AT&T only. A multitouch screen replaced keyboards. The App Store (2008) let outside developers sell software, with Apple taking up to 30%. Google's Android (2008) followed the model and now runs most phones worldwide. Apple has sold over three billion iPhones, about half its revenue. Consumers and app makers gained; Nokia, BlackBerry and makers of cameras, GPS units and music players lost.
Impact on society and the economy
It made the phone the main way people use the internet, enabling Uber, Instagram, TikTok and mobile banking, and helped make Apple the first US company worth $1 trillion (2018).
Think of it like
Like a mall owner charging percentage rent: Apple owns the building, approves every tenant, and takes a cut of each sale in the App Store.
How we know
Apple's keynote video and financial filings, sales data from analysts such as IDC, and court records from Apple's patent and antitrust cases.
Still debated
Economist Mariana Mazzucato argues its key technologies (touchscreens, GPS, the internet itself) came from government-funded research; how to divide the credit is debated.
Inside this (3)
Connections (7)
▸Alexander Graham Bell and the telephone evolved over a century into iPhone and the smartphone platform economyMostly agreed
The connection
Bell's network made voice over wires a mass service. AT&T's Bell Labs then invented the transistor (1947) and the cellular-network concept; Motorola's Martin Cooper made the first handheld cellphone call in 1973. The iPhone merged phone, internet and computer, and at launch ran only on the network of AT&T, Bell's corporate descendant.
When and how
Boston 1876; Bell Labs in New Jersey from the 1940s; New York 1973; San Francisco 2007, with AT&T as the iPhone's sole US carrier until 2011.
How sure are we?
The technical lineage is well documented in patents and Bell Labs records, and the AT&T exclusive deal is public record.
Debates
How to split credit for the smartphone among Bell-era inventions, government-funded research like GPS, and Apple's own design is debated.
▸Samsung (Lee Byung-chul) became the chief rival of iPhone and the smartphone platform economyWell documented
The connection
Samsung was first a supplier, making the processor chips for early iPhones, plus memory and later screens. Its Galaxy S (2010), running Google's Android, became the iPhone's main rival. Apple sued in 2011 for copying; a 2012 jury awarded about $1 billion, later cut, and they settled in 2018. Samsung led sales most years since 2011; Apple takes most profits.
When and how
Suwon, South Korea, and Cupertino, California, 2007–2018; court fights in San Jose and about ten other countries.
How we know
Chip teardowns of early iPhones, court records from Apple v. Samsung, and market-share data from research firms such as IDC and Counterpoint.
Debates
Who copied whom remains argued: Apple pointed to design patents, Samsung to its wireless technology patents, and courts split across countries.
▸Steve Jobs and Apple unveiled iPhone and the smartphone platform economyWell documented
The connection
After a disappointing 2005 iTunes phone made with Motorola, Jobs pushed Apple, then a Mac and iPod company, to build its own phone. A secret team worked about two and a half years under 'Project Purple.' He unveiled it as 'an iPod, a phone and an internet communicator' in one. He first resisted outside apps, then approved the App Store.
When and how
Cupertino, 2004–2007; unveiled at Macworld in San Francisco on January 9, 2007; key team members included Jony Ive, Scott Forstall and Tony Fadell.
How we know
The keynote video, Apple records and trial testimony in Apple v. Samsung, and Walter Isaacson's 2011 authorized biography.
Debates
How much credit goes to Jobs versus his team, and whether Apple would have opened to outside apps without hackers 'jailbreaking' early iPhones.
▸TSMC (Morris Chang) makes the processors of iPhone and the smartphone platform economyWell documented
The connection
Apple designs its own A-series processors; TSMC has manufactured them alone since 2016, after sharing the 2015 chip with Samsung. Apple has long been TSMC's largest customer, about a fifth of its revenue, and usually first on each new process. That lets Apple control performance without owning factories, but ties the iPhone to Taiwan.
When and how
TSMC's factories in Hsinchu and Tainan, Taiwan, from about 2014; Apple's chip team in Cupertino, led by Johny Srouji.
How we know
Chip teardowns by firms such as TechInsights, TSMC's annual reports on its largest customer, and Apple's statements about buying chips from TSMC Arizona.
Debates
How Apple would cope if a crisis cut off Taiwan; Arizona plants now make some Apple chips, but the most advanced still come from Taiwan.
▸iPhone and the smartphone platform economy made possible Uber and the gig economyWell documented
The connection
Uber needed a phone in every rider's and driver's pocket with GPS, mobile internet and a stored payment card. The iPhone, its App Store and Android made that common. Uber launched in 2010 as an iPhone app summoning black cars; GPS let it match riders with the nearest driver and price trips automatically. The same toolkit enabled DoorDash and Instacart.
When and how
San Francisco, 2009–2010; Uber's first app ran on the iPhone, with Android following.
How we know
Uber's documented founding history and early app releases; every major gig platform depends on smartphone apps by design.
Debates
How much gig work's growth owes to smartphone technology versus the savings from treating workers as contractors rather than employees.
▸iPhone and the smartphone platform economy became the platform for Zhang Yiming and ByteDance (TikTok)Mostly agreed
The connection
TikTok was built for the phone: full-screen vertical video, a built-in camera for making clips, and an endless 'For You' feed tuned by tracking what each user lingers on. Zhang Yiming founded ByteDance in 2012 betting that smartphones would make algorithms, not editors, the main way people find content. In China most users reach Douyin on Android phones.
When and how
Beijing, 2012; Douyin 2016; TikTok worldwide from 2017 on iPhones and Android phones.
How sure are we?
App-store download rankings from firms such as Sensor Tower, and ByteDance's own statements about its mobile-first strategy.
Debates
Whether endless short-video feeds harm attention and teen mental health, a question with mixed research and lawsuits against both TikTok and Meta.
▸iPhone and the smartphone platform economy drew App Store scrutiny in Antitrust cases against Google, Meta, Amazon and AppleWell documented
The connection
Apple lets iPhone users install apps only through its App Store in most countries, and charges developers up to 30% on digital sales. Epic Games sued in 2020; a 2021 ruling and a 2025 contempt order made Apple let US apps link to outside payments. In March 2024 the Justice Department sued Apple for monopolizing smartphones by locking users in.
When and how
Federal courts in Oakland (Epic v. Apple) and New Jersey (the Justice Department case); the European Commission in Brussels, which fined Apple €500 million in 2025.
How we know
Court rulings, the Justice Department complaint and EU decisions are public; analysts estimate App Store commissions at tens of billions of dollars a year.
Debates
Whether Apple's control protects users' security and privacy, as it argues, or mainly protects its fees; the Justice Department case may take years.