When Apple released its very first iPhone ten years ago, the device was described as sleek, but painfully expensive.
After all, an 8GB iPhone 2G retailed at nearly $600 when it was released on June 29, 2007—a big premium above the popular Motorola Razr2, which sold for $250 at the time. Though many customers paid that $600 over time, through contracts with their cell-phone providers, it was still a potential budget-buster.
But had a customer been unable to resist the allure of a device that could play music, scan emails, and make phone calls all at once, they could have bought the iPhone—and then more than made up for the outlay by buying a stake in Apple, the company.
Since the advent of the iPhone a decade ago, investors lured by the technology’s potential and its runaway popularity have pushed shares of the company up 744%. So if our theoretical customer had invested $100 in Apple back then, their stake would be worth $844 now, not including reinvested dividends—completely covering the price of that iPhone purchase from a decade ago.
And had they invested the value of a first generation iPhone in Apple back in 2007—that is, had they bought $600 worth of stock—their stake would now be worth $5,065. That would give them enough to buy five iPhone 8’s, at the $1,000 price point where some prognosticators have estimated they’ll sell at their October release date.
A bigger swing would have meant a bigger payoff. An investment in 2007 of $135,000, about the price of a condo in a middle-American city, would have turned into $1.1 million today. Add the value of dividends, which Apple began paying again in 2012 after a long hiatus, and that stake turns into $1.3 million, on a total return of 833%. Meanwhile, the S&P 500 rose a mere 62% in that same 10-year span.
While it’s highly unlikely an investor would have bought Apple stock for the express purpose of paying for their iPhone, those numbers are a testament to how much Apple has grown thanks to its flagship smartphone.
Of course, investors today are hoping for something as big as the original iPhone that can keep propelling Apple’s stock higher. In 2016, iPhone sales declined for the very first time on an annual basis—fanning worries that the iPhone was losing its allure. Apple has pointed toward its growing services segment, which includes Apple Music, though that expansion has hardly been as explosive as that of the iPhone’s in its first few years. Shareholders will be watching anxiously to see what happens next.
