Happy Anniversary, iPhone: Inside The Five-Year Transformation -- And What To Expect Next

All Grown Up

Five years ago, Apple then-CEO Steve Jobs unveiled a half-smartphone, half-iPod device in San Francisco he called "magical." That device was the first-generation iPhone, a smartphone that -- despite those who doubted it -- quickly positioned itself as one of the most influential gadgets to hit the tech market to date.

Since that original iPhone was launched in 2007, a lot has changed, both in terms of the device itself and where it stands against the competition. So, in recognition of the five-year anniversary of one of Apple fans' most cherished possessions, here's a brief history of the iPhone, starting from the original launch to the introduction of Siri to the upcoming iPhone 5.

The First iPhone: A 'Magical Product'

When Steve Jobs first unveiled the iPhone on Jan. 9, 2007, the little 4.5-inch device immediately stood in a class of its own. Unlike its top competitors at the time -- now-fallen giants Research In Motion and Nokia -- Apple’s phone sported a unique, button-less display that Jobs referred to as the "most revolutionary user interface since the mouse."

In addition to being a mobile phone and full-fledged web-browsing device, the iPhone was also a multimedia hub, granting users hand-held access to their favorite music, movies and TV shows. As Apple put it, it was three devices in one.

Spec-wise, the first iPhone boasted a 2-megapixel camera, ran on a 412MHz ARM CPU, had a screen resolution of 320-by-480 and weighed 4.76 ounces.

Apple sold 1 million iPhones within its first 74 days on the market -- a figure that took the iPod almost two years to reach. The 4GB model cost $499 and the 8GB model cost $599.

Against All Odds

Despite being "magical," the first iPhone was competing against RIM, Nokia and Microsoft. But industry analysts Canalys published stats in Feb. 2008, proving apple Apple was making more of a mark than anticipated.

Not even six months on the market, the iPhone held a whopping 28 percent of the U.S. converged-device market. RIM’s BlackBerry still led the pack with 41 percent, but Apple had officially surpassed Microsoft’s Windows Mobile phones, which held 21 percent.

"When you consider that it launched part way through the year, with limited operator and country coverage, and essentially just one product, Apple has shown very clearly that it can make a difference and has sent a wakeup call to the market leaders," said senior Canalys analyst Pete Cunningham.

One such market leader was Microsoft CEO Steve Ballmer (left), who underestimated the impact of the iPhone early on, famously saying in 2007 there was "no chance that the iPhone is going to get any significant market share."

The iPhone 3G: Arrival Of The App Store

Despite the original iPhone’s booming success, Apple decided to give its flagship smartphone a makeover in June 2008 by introducing the second-generation iPhone 3G.

Said to be twice as fast as its older sibling, the new iPhone 3G also delivered for the first time Apple’s App Store as part of the iPhone software 2.0 update. The phone boasted fairly similar specs to the first-generation version, with a 3.5-inch display and 320-by-480 resolution, but was slightly lighter, weighing in at 4.69 ounces.

This time, Apple hit the 1 million sales mark in just three days, a staggering jump compared to the nearly three months it took to reach this milestone with the first-gen iPhone. It came in an 8GB and 16GB model, starting at $199 and $399, respectively.

Stealing BlackBerry's Spotlight

In the release of its fourth-quarter fiscal earnings in October 2008, Apple shared its newest milestone in the smartphone market: It had outsold enterprise staple Research In Motion.

Though RIM still held more U.S. market share than Apple, iPhone sales topped BlackBerry sales for the first time ever, signifying a growing interest from business users in Apple’s primarily consumer-focused device.

"Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone -- we sold more phones than RIM," said Steve Jobs, Apple’s CEO, in the earnings statement.

Apple reported selling 6.9 million iPhones during the three-month period, while RIM reported selling 4.4 million BlackBerrys.

The iPhone 3GS: Faster, Better Camera

On June 8, 2009 Apple released a souped-up version of the iPhone 3G, called the iPhone 3GS.

Unlike the 3G version, which touted the same processor and camera as the original iPhone, the iPhone 3GS had a faster 600MHz CPU and a higher-resolution, 3-megapixel camera.

It also boasted the latest iPhone software, version 3.0, which delivered a number of new features such as a built-in digital compass app and the landscape keyboard option.

The iPhone 3GS also sported an early iteration of hands-free voice control, paving the way for Siri, the personal voice assistant that officially debuted with the iPhone 4S.

The iPhone 3GS was available in a $199 16GB model and a $299 32GB model. Similar to its predecessor the iPhone 3G, 1 million units of the new phone were sold within the first three days it became available.

The iPhone 4: FaceTime, Retina Display

After the iPhone 3GS, the iPhone 4 launched on June 7, 2010. Steve Jobs referred to this fourth-generation phone as being the "biggest leap since the original iPhone." And it was. With the introduction of those new features, it became representative of today's quintessential Apple user experience.

One of those features is FaceTime, a video calling app that lets users not only hold conversations with other iPhone users, but see them in real-time on their screen. Apple said in the iPhone 4 press release that FaceTime "makes the dream of video calling a reality."

Retina display, a term that has risen to fame with the most recent iteration of the iPad, also made its debut on the iPhone 4. As a result, the display on the phone seemed crisper and clearer than ever, with a 960-by-640 resolution that touted four times the number of pixels used for the iPhone 3GS.

The iPhone 4 sold as a 16GB model for $199 and as a 32GB model for $299.

Can You Hear Me Now?

Like its predecessors, the iPhone 4 flew off U.S. shelves as soon as it became available. But, it wasn’t all smooth sailing for Apple, as users started to complain almost instantly about weak or nonexistent Wi-Fi signals when trying to place a call on the new device.

"It will connect but then disconnects randomly. My 3GS, iPad and MacBook all stay connected no problem," one user wrote in the Apple support forum. "I tried resetting the router, renewing the lease, resetting the network settings, nothing works."

As the problem escalated, Apple issued a statement on July 2, 2010 explaining that the iPhone 4 had a not-so-strategically placed Wi-Fi antenna that users were inadvertently blocking when talking on the phone. To offset the issue, Apple issued free "bumpers" to iPhone 4 users that strengthened the reception.

The iPhone 4S: Siri Says Hello

Launched on October 14, 2011, Apple’s most recent smartphone, the iPhone 4S, boasts the same 960-by-640 display as the iPhone 4, but ups the ante with other specs, including an 8-megapixel camera and a "blazing" dual-core A5 chip that doubles its speed and performance.

Most notably, iPhone 4S is the first iPhone to feature Siri, a voice-activated "assistant" that can verbally answer user inquiries regarding weather, directions, traffic and really any other random questions they can muster up. Siri can also send emails and texts, schedule meetings, and make calls when prompted by the sound of a user’s voice.

The iPhone 4S comes in a $199 16GB model, a $299 32GB model and a $399 64GB model. Nearly 4 million units of the 4S were sold during the first weekend it hit the market, making it the fastest-selling iPhone yet.

iPhone Invasion

Apple’s iOS today is the second most adopted smartphone platform in the U.S., accounting for 31.4 percent of the market. It’s second only to the sprawling lineup of Android devices, which are churned out by a number of handset makers including HTC and Samsung and account for 50 percent of the subscriber base.

That said, the iPhone has certainly made its mark worldwide. After Apple announced its stellar first-quarter earnings this year and reported selling 37.04 million iPhones over the course of 98 days, digital design guru Luke Wroblewski crunched some numbers.

According to his calculations, 37.04 million iPhones sold in one quarter means 377,000 were sold each day. To put some context around that number, it surpasses the global daily birth rate, which is approximately 371,000 babies every 24 hours.

Distilled even further, this means about 6,000 more iPhones are sold each day than babies are born around the world.

What's Next?

The momentum gained by the iPhone over the past five years has yet to show any sign of slowing down. And, Apple is gearing up to ensure that it doesn’t, by reportedly launching the fifth iteration of the popular device this fall.

Rumors regarding the new iPhone’s specs, form factor and software have been penetrating every inch of the web for weeks. Among the speculation is talk of a new unibody design, the use of liquid metal technology and a larger screen size.

It’s also widely believed to run iOS 6, Apple’s revamped mobile operating system poised to deliver new capabilities for email, FaceTime and photo sharing.

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