History of Apple:

The iPhone

History of Apple:

The iPhone

Prepared for:

Jenell Keller

Business Communication Instructor

University of Michigan-Flint

Prepared by

Aubrey Hammill,Winifred Larry,Michael Olson,

Mabel Smeckert, Kristen Wood

University of Michigan-Flint

November 17, 2013

MEMORANDUM

To: Department of Apple (iPhone) researchFrom: Aubrey Hammill, Winifred Larry, Michael Olson, Mabel Smeckert, and Kristen

WoodDate: October 16, 2013Subject: History of Apple and the iPhone

Here is the research that your department has requested regarding the history of the iPhone and the Apple Corporation.

As we stated the iPhone has gone through tremendous overhaul and the product continues to grow. During the transition of the iPhone, there have been numerous advances along with major changes. The beginning stages were very limited for such an expensive product. The market for this item was abundant but not available to many people, especially those of normal expenditures.

After a period of transition it became clear that the market price would have to come down for the benefit of the consumers. There was a limited market of carriers for the iPhone but in time that also changed and was opened up to Sprint, and Verizon.

We know that since the introduction of the iPhone in 2007, there have been a number of software changes, model changes, enhancements, and browser changes. These changes all support the idea of a better, faster, more economical iPhone. Technology advancement for the iPhone has come from being just a processor to now using your finger for identification purposes, and surfing the web at lightning speed.

Finally, with the new touch sensor, lower price, better camera pixels, and other upgrades, the iPhone is still targeting the majority of the Apple population. Although we need to continue to improve on some items and continue to broaden our market the Apple conglomerate is still ahead of the game.

We appreciate the opportunity to work with you and your department and has given us a true insight into the business realm of Apple.

ContentsPAGE

iPhone 1…………………………………………………………………………………………1

iPhone 3G……………………………………………………………………………………….2

iPhone 3GS……………………………………………………………………………………...3

iPhone 4…………………………………………………………………………………………4

iPhone 4S………………………………………………………………………………………..5

iPhone 5…………………………………………………………………………………………6

iPhone 5C & 5S…………………………………………………………………………………7

Conclusions and Recommendations…………………………………………………………….9

References………………………………………………………………………………………10

List of IllustrationsFIGURES PAGE

1. iPhone 1………………………………………………………………………………………1

2. iPhone 3G…………………………………………………………………………………….2

3. iPhone 3GS…………………………………………………………………………………...3

4. iPhone 4………………………………………………………………………………………4

5. iPhone 4S……………………………………………………………………………………..5

6. Samsung………………………………………………………………………………………6

7. iPhone 5………………………………………………………………………………………7

8. iPhone 5C…………………………………………………………………………………….8

iPhone1Whispers of Apple venturing into the mobile phone market emerged in 2004, thus creating a buzz among the cellular community. Ultimately splitting the mobile phone into two different categories, first are the Apple loyalists whom believe that it will be the best phone on the market, and the side of the skeptics you hear talk of the new Apple phone will just be an iPod that can make a call.

On January 9th, 2007 in San Francisco, CA before an audience of journalists, analysts, Apple employees and customers Apple CEO Steve Jobs announced the release of the newest Apple product, the iPhone. During this two hour presentation Jobs disclosed the exclusive partnership with the United States largest cellular phone carrier Cingular (bought out by AT&T).

The Apple and Cingular relationship materialized when Stanley T. Sigman, Cingular’s CEO and Jobs had the initial meeting in February 2005 in a New York hotel. The Apple – Cingular relationship was made prior to the cellular carrier even seeing an early prototype (Markoff, 2007).

With a sleek design featuring a single mechanical button on the face of the phone, the iPhone will be powered by the same operating system as the Macintosh computers, the OS X. The Apple Safari internet program is the same as on your Mac. The lithium ion battery supported five hours of operating time and 16 hours of audio playback (iTunes 7.5). The iPhone included Bluetooth network and Wi-Fi network compatibilities, however no 3G. The current Cingular data package was a 2G data plan on their EDGE network.

Figure 1 – iphone 1

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Equipped with 3.5” 480 x 320 pixel widescreen Multi-Touch display and a 2.0 megapixel camera located on the back of phone next to the iconic Apple logo. The Multi-Touch display technology is shared by the iPod which is extremely precise and user friendly. The onscreen keyboard for typing e-mails and text messages (Apple Inc., 2010).

Despite the hefty price tag of the $499 4GB iPhone and the $599 8GB iPhone models, there was a great demand for Apple’s latest invention.

Jobs said that Apple had set a goal of taking 1 percent of the world’s market for cell phones, or 10 million phones per year, by the end of 2008. Apple’s announce of the iPhone alone created a wave in stock market as we watched Apple’s stock (AAPL) rise, while shares of competitor companies such as Palm Inc. and Research in Motion (Blackberry), fell more than 5 percent (Markoff, 2007).

Less than 24 hours after the release of the iPhone on June 29th 2007, Apple sold 270,000 iPhones, then on the 74th day the Apple reached a milestone of selling one million iPhones. Apple sold 6.1 million of the iPhone 1 over the lifetime of the product (Cheng).

iPhone 3GThe iPhone 3G hit the market in 2008, and was the next big accomplishment of Apple. To everyone’s surprise, it took only one week to sell over one million iPhone 3Gs (Richie). By 2009, over 20 million units had been sold. Many improvements had been made from the previous iPhone; software had been improved to IOS version 2.0, 36 percent faster web browsing, as well as being offered in more than just the traditional black, but in white as well. Unfortunately, the iPhone was still only offered through one phone service, AT&T. The price was the major difference. Priced at $199/$299, a year later the phone’s price dropped to $99, making it the first cheap iPhone (Richie).

Figure 2 – iphone 3G (Richie)

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iPhone 3GSNot too long after the release of the iPhone 3G, the 3GS was released and hit 80 countries. It, same as the 3G, sold one million units within the first week and was now considered the “next big thing” at Apple. The way the 3GS was said to be described was, “Same great design, all new insides” (Richie). Although there were not many physical changes to the phone itself, there were multiple internal advancements to the iPhone 3GS. The one main physical difference was a coating that was added to the screen, an improved "oleophobic" oil repellent coating over the 3.5" 320x480 display, to wear better with finger prints and other oils. Yet another upgrade to the processor, now IOS version 3.0, made this the fastest iPhone to date. Coming in at 2 to 4 times faster than the others, the iPhone 3GS was definitely the latest and greatest. As well as the faster processor, the 3GS also offered voice control, controlling calls and music playback, and other things (Richie). It came with a new 3.0 megapixel camera and a digital compass.

Figure 3 – iPhone 3GS (Richie)

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iPhone 4Figure 4 – iPhone4 (imore.com)

The iPhone 4 was introduced alongside iOS 4 in 2010, two years after the 3GS. Available through 185 carriers in 88 countries, it contained many new features and upgrades from the 3GS (Ritchie). “FaceTime video calling sets a new standard for mobile communication and our new Retina display is the highest resolution display ever in a phone; with text looking like it does on a fine printed page. We have been dreaming about both of these breakthroughs for decades” (Ritchie). A front camera made it easier than ever before to take popular ‘selfies’ shots and to use FaceTime video chat. Also, the rear-facing camera was improved to 5 megapixels from 3 megapixels in the 3GS and for the first time, the camera has a flash for taking low-light photos. Optical lamination, light-emitting diode (LED) backlighting, and a doubled pixel count allowed this iPhone to provide the best cell phone picture yet. Increases in processing power, RAM, and battery life helped the iPhone 4 support these new features. Next, the iPhone 4 had a new 24% thinner body design with aluminosilicate (chemically-hardened glass) front and back available in black or white. “Storage options stayed the same at 16GB and 32GB… In addition, Apple added a 3-axis gyroscope to the iPhone 4, with pitch, roll, yaw, as well as rotation around gravity.

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Working together they provided 6-axis motion detection. It was a huge leap forward when it came to precision control, especially for gaming” (Ritchie).

During its first weekend on the shelves, 1.7 million units were sold at $199/299, despite some unanticipated problems. The new antenna design, although quite beneficial in an area with strong signal, malfunctioned in poor reception. Apparently, if the antenna was touched in the wrong spot, “you could detune the signal and kill the network connection dead” (Ritchie). By February 10, 2011, the phone included a newly designed antenna without this problem (Ritchie). Also, the release of the white version of the iPhone 4 was delayed. Apple finally resolved problems with yellowing and opacity interfering with internal sensors and released the while iPhone by April 28, 2011. Finally, Apple experienced its largest product leak ever during this time and it caused changes and repercussions for the company (Ritchie). Nonetheless, the iPhone 4 was very successful. 4 million units of iPhone 4 were sold during its first quarter after release (Rogowsky).

iPhone 4SFigure 5 – iPhone4S (imore.com)

Released October 14, 2011, iPhone 4s was called “the most amazing iphone yet” (Ritche). Taking 16 months to develop, the release of the iPhone 4s occurred after the largest time gap in

History of Apple: The iPhone Page 5

Apple’s product history. The new phone kept the same basic body design as its predecessor, instead focusing on internal developments. The previously problematic antenna was greatly improved; eliminating detuning and signal attenuation. Also, this new antenna “could work on GSM internationally, making the iPhone 4s Apple’s first ‘world phone’” (Ritchie). Apple included its new A5 processor in the iPhone 4s, boosting processing general speed by 2x and graphics speed by 7x (Ritchie). This improved processor helped support new software features like the new iOS 5, AirPlay, iCloud, and, Siri. First, Airplay allowed iPhone 4s owners to wirelessly project phone content to their Apple TV. Second, iCloud creates a backup of phone content wirelessly. Third, Siri, “which replaced the previous Voice Control feature with a full-on virtual digital assistant feature powered by natural language, and a Pixar-like personality”, allows iPhone users to operate their cell hands free with voice-recognition software (Ritchie). Also, an improved battery increased 3G talk time to 8 hours from 7 hours on the iPhone 4 (Colon). “Improvements have also been made to the phone’s camera, which can now take 8-megapixel photos and record video at 1080p” (Colon).

The iPhone 4s was priced similarly as previous models, $199-399 depending on memory capacity. During its opening weekend, 4 million iPhones were sold and 37 million in its first quarter of sales (Rogowsky). This is in spite of the blatant copycat actions of Samsung, who Apple sued for patent and trade-dress infringement in April 2011 (Ritchie). “At the time of this writing, Samsung has lost a $1 billion verdict to Apple in the U.S. but appeals and other suits continue to rage globally. Samsung has since developed far more distinct, differentiated products” (Ritchie). To further complicate Apple’s situation during these challenging times, Steve Jobs, the former CEO and Apple mastermind, passed away on October 5, 2011.

Figure 6 – Samsung (imore.com)

iPhone 5The iPhone 5 was introduced to the public in 2012. Many improvements were made from the iPhone 4S to the iPhone 5. The screen was increased to four inches and the reflection was reduced. The iPhone 5 was the first iPhone with a custom processor (Richie). Improvements

History of Apple: The iPhone Page 6

were made to the weight, making the iPhone5 a full ounce lighter than the iPhone 4S. Apple also changed the brushed aluminum back to glass. The camera was also improved from 0.3 megapixels to 0.9 megapixels (Hill). The biggest change made was that the iPhone5 also introduced a new docking system. Apple introduced a smaller docking system for all iPhone products, making the larger docking system obsolete (Richie).

Figure 7 - iPhone 5 (Richie)

The iPhone5 ended up doing really well in the marketplace despite skeptical reviews, selling 5 million units the first week. The iPhone5 was available in 100 countries, and 240 carriers.

Despite the high costs of the iPhone5, prices set at $199, $299 and $399, the iPhone5 did better than expected (Richie).

iPhone 5C & 5SIntroduced in the Fall of 2013, the iPhone 5C and 5S were supposed to change and improve the iPhone phenomenon once again. After the introduction of the iPhone 5 Apple had been continually losing market share to lower cost smartphones (Tsukayama). With Apple’s revenue growth slowing, Apple realized the need for a cheaper iPhone. The iPhone 5C was introduced at a new lower cost at $99 for a two year contract and retails at $549, much different than the

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traditional iPhone pricing for the last six years set at $200 with a two year contract, and retail of $650. The iPhone 5C was introduced in multiple colors, with a plastic backing instead of the traditional aluminum or glass (Bradshaw). The iPhone 5C is made for a market that are not able to buy the higher priced iPhones. Apple hopes with introducing a cheaper iPhone that it will appeal to a larger market (Tsukayama).

Figure 8 - iPhone 5C (Bradshaw)

Releasing the iPhone 5C and 5S at the same time was a first for Apple. The second phone to be released was the iPhone 5S. The iPhone 5S was designed to appeal to the typical iPhone market. Pricing starting at $199 with a two year contract. The iPhone 5S came with a few new upgrades from the iPhone 5. Apple added a new feature that measures motion and environmental information, which can be used with a fitness app (Tsukayama). As well as, adding a new finger print sensor which is more secure than the typical four digit pin (Rogowsky).

With the release of both phones at the same time, Apple has not succeeded as they thought they would. The iPhone 5C phone is nearly identical to the iPhone 5, but with a plastic backing. The public was hoping for a cheaper phone at retail value, to make it more affordable for the lower income customers. Although, 9 million units were sold during the first week, the iPhone 5C has not done as well as planned. Critics claim that the phone is still too expensive for lower income households, and that Apple is still appealing to their iPhone enthusiasts. With the release of the iPhone 5S at the same time, the iPhone enthusiasts wanted the better phone and therefore bought the iPhone 5S over the iPhone 5C. It is still too early to tell exactly if the releasing of two iPhones at the same time will be a success or failure for Apple (Popper).

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Conclusions and Recommendations Apple Inc. needs to continue to develop and improve their technology to be able to stay ahead of other smartphone providers. Apple Inc. has done well by making sure to stay ahead of the technology, while also continuing to grow their market share. Apple Inc. has not only developed their technology in their iPhones, but also made the iPhone more appealing. With the introduction of the colored iPhones in the iPhone 5C and the new gold and silver colors in the iPhone 5S, Apple Inc. is able to compete with other colored smartphones.

Apple Inc. needs to develop new, less expensive iPhones with the same level of technology as the more expensive models to appeal to the younger generation. Although, iPhone enthusiasts continue to buy the expensive models, lower income and the young generation cannot afford them.

With the introduction of cheaper models, Apple Inc. can continue to appeal to new markets. Appealing to newer markets will allow for Apple Inc. to take over more of the smartphone market.

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ReferencesApple Inc. (2010, February 19). iphone - technical specifications. Retrieved from

http://support.apple.com/kb/sp2

Bradshaw, T. (2013, August 26). Apple Looks to Build Market Share with the Cheaper iPhone 5C. In CNBC. Retrieved September 28, 2013, from http://www.cnbc.com/id/100988164

Cheng, J. (2008, October 21). Apple officially surpasses 10 million iphones sold in 2008. ARS Technica, Retrieved from http://arstechnica.com/apple/2008/10/apple-officially-surpasses-10-million-iphones-sold-in-2008/

Colon, A. (2011, October 4). Battle of the iPhones: iPhone 4S vs. 4 vs. 3GS. Retrieved September 26, 2013 from http://www.pcmag.com/article2/0,2817,2394115,00.asp

Hill, S. (2012, October 19). iPhone5 vs. iPhone 4S: Our In-depth Comparison. RetrievedSeptember 26, 2013, from http://www.digitaltrends.com/mobile/apple-iphone-5-vs-iphone-4s-spec-showdown/

Markoff, J. (2007, January 10). Apple introduces innovative cellphone. The New York Times. Retrieved fromhttp://www.nytimes.com/2007/01/10/technology/10apple.html?_r=1oref=slogin&

Popper, B. (2013, October 23). Is the iPhone 5C a sucess?. In The Verge. Retrieved October 24, 2013, from http://www.theverge.com/2013/10/23/4844698/is-the-apple-iphone-5c-a-success

Ritchie, R. (2013, August 28). History of the iPhone 3G: Twice as Fast, Half the Price. In iMore. Retrieved September 25, 2013, from http://www.imore.com/history-iphone-3g

Ritchie, R. (2013, August 30). History of the iPhone 3GS: Faster and More Powerful. In iMore. Retrieved September 25, 2013, from http://www.imore.com/history- iphone-3gs

Ritchie, R. (2013, September 1). History of the iPhone 4: Changing Everything-Again. In iMore. Retrieved September 25, 2013, from http://www.imore.com/history- iphone-4

Ritchie, R. (2013, September 2). History of the iPhone 4S: The Most Amazing iPhone Yet. In iMore. Retrieved September 25, 2013, from http://www.imore.com/history-iphone-4s

Ritchie, R. (2013, September 3). History of the iPhone 5: The Biggest Thing to Happen to iPhone. In iMore. Retrieved September 25, 2013, from http://www.imore.com/history-iphone-5

Rogowsky, M. (2013, September 25). Apple Can’t Win. In Forbes. Retrieved September 25, 2013, from http://www.forbes.com/sites/markrogowsky/2013/09/25/apple-cant-win/

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Tsukayama, H. (2013, September 10). Apple Unveils Cheaper iPhone 5C and iPhone 5S with Fingerprint Sensor. In The Washington Post. Retrieved September 25, 2013, from http://www.washingtonpost.com/business/technology/apple-likely-to-unveil-2-new-smartphones/2013/09/10/fe107898-1a1d-11e3-a628-7e6dde8f889d_story.html

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