iPhone X, and The Future of Marketing

How the iPhone transformed global commerce

This year will mark the first decade of the iPhone era, ushered in with Steve Jobs’ landmark 2007 keynote that brought the smartphone market to life in an explosive birth.

As Apple prepares to release the iPhone X to commemorate the occasion, the product and company have both been targets of criticism, and praise. The X has been lauded for its aesthetic appeal, although a new ‘lip’ in the screen to accommodate cameras has baffled even ardent fans. Nevertheless, new features on board the X anticipate developing industries, including 3D cameras for VR, Augmented Reality, “Face ID” facial recognition and wireless charging.

Although it turns out that the most heavily advertised features of the X are not new or original, the product — which may or may not reasonably fetch $1,000 out of pocket — has still come a tremendous way from its inception, along with the rest of the mobile industry.

It’s worth pausing to reflect on the way this industry — and the iPhone in particular — has managed to transform global commerce in only ten years, and how it will continue to do so.

Rise of The Post-PC Era

A term not often heard in common parlance anymore is “Post-PC Era,” a buzzword once used to describe the fading importance of personal computers during the age of tablets and smart-devices. But before understanding what life was like after PCs, it’s important to appreciate what computers accomplished.

During the 1990s and through the 2000s, PCs were the frontier not only of computing, but of a brand new market: brick-and-Mortar businesses sought out an online presence in droves, and thousands of fledgling businesses developed with computers as a core element in their marketing strategy during the Dot-com bubble.

By 2006, e-commerce alone — from websites like Amazon, Overstock, and smaller retailers — broke a $100 billion profit record for the entire year. Brand new industries boomed, including

• Digital media downloads
• Ad-supported content
• User-generated auctions
• Virtual currency exchanges
• Web-based affiliate sales programs

The way that advertisers interacted with consumers experienced radical changes as well: prior to mass adoption of the Internet, television, billboards, newspaper spreads and radio spots were some of the best ways to send a message to the public.

Everything changed with PCs:

• Google’s central place on the Internet bestowed the gift of AdWords to businesses, enabling them to finally target consumers directly on the basis of personal interests; the profitability of hosting these ads ensured their ubiquity across the web.
• Content marketing became a viable way to build a presence in any industry. Simply by producing and distributing valuable information from a company site, blog, or whitepaper, businesses could target anyone looking for authoritative information online.
• Businesses could also interact with consumers directly by building email lists to keep subscribers constantly updated with information, discounts, sales, and more.

But one revolution was quickly supplanted by another. If PCs were a step forward for advertising and marketers, the rise of mobile devices was a jump into lightspeed.

It doesn’t seem like much by today’s standards.

It’s small. It has limited screen real estate. Its battery life is unimpressive, and its user interface is laced with the skeuomorphist tendencies of younger Jony Ive.

But the 1st generation iPhone has one important ingredient that will forever cement its legacy: Internet access and a web browser.

With these two features, online marketers instantly had a brand new playing field for the same game they’d been perfecting since the turn of the millenium.

PCs pushed commerce into offices, living rooms, and libraries — the iPhone took it directly to the consumer’s pocket.

All of this could have been a flop, if Apple hadn’t sold 270,000 iPhones in the first 30 hours after its introduction. And if that number had simply represented a fad, it still could have been a flop: but by 2011, 108 million adults in the United States owned a product that had not existed four years earlier.

By 2011, 108 million adults in the United States owned a product that had not existed four years earlier.

“There’s an app for that”

Although endowed with Internet connectivity, the original iPhone’s native Safari browser was slow and cumbersome. On top of that, Apple was so obsessed with maintaining a closed operating system that 3rd party browsers were not allowed into the app store until 2009.

This made accessing mobile websites — and therefore mobile advertisements or e-commerce stores— inconvenient at best. Early on, mobile marketing therefore took a trajectory focused around the app ecosystem.

By submitting applications to the iOS App Store, retailers could skip the cumbersome process of optimizing a web page for the Safari browser, and provide a custom-made, mobile experience to consumers that was convenient and fast. Early adopters included Amazon, eBay, banking services and PayPal.

Mobile Advertising

Mobile apps have been extremely useful to businesses in a direct way, but they have also been useful by providing a launching pad for targeted advertising. Immediately after the launch of the iPhone, app developers experimented with frameworks for displaying ads to users; the quality of these solutions varied from developer to developer.

One particular solution called AdMob gained and retained popularity by allowing the developers of free applications to embed advertisements that would display during use; if you have ever used a smartphone in your life, you have almost certainly been exposed to AdMob affiliates, or to the competing network launched by Apple in 2010, iAds.

The ubiquity of mobile devices in the Post-PC era, and the countless ways that they can be used to target consumers have made them more potent tools for generating revenue than ever before.

As ownership of smartphones continues to rise, so does the number of hours consumers spend on them every month.

This fact leads to trends, both surprising and unsurprising:

• This year, mobile AdSpend will hit $141.2 billion
• One in every three online sales comes from a mobile device
• Nearly 60% of all online searches originate from mobile devices
• The sale of gum and other conveniences at checkout lines in retail stores has plunged due to the cumulative effect of consumers engaged with mobile devices

The Future

It is demonstrably true — and absolutely no exaggeration to say — that the launch of the original iPhone changed the world in dramatic ways. For marketers too, that effect has been powerful. Shifting consumer paradigms require different strategies, and an eye to spot opportunities where none existed before.

But how does the iPhone X stack up against its predecessors? Does it open any exciting, new doors that could revolutionize marketing the way the first iPhone did?

The answer is: maybe.

Let’s look at a few trends that the iPhone X plugs into. A recent article by Kent Lewis spells out dozens of emerging technologies that promise tremendous revenue down the road. These include,

• Voice search with digital assistants such as Siri, Cortana, Amazon Alexa and Google Home. Not only are searches from these platforms growing exponentially, but they allow unprecedented opportunities for targeted advertising of online/traditional businesses, restaurants, and more.
• Location Based Marketing (LBM) in the form of beacon messaging, which combines near field communications (NFC), radio frequency identification (RFID), WiFi, geo-fencing, and local listings. In 2016, this technology generated $44 billion in retail sales.
• Augmented Reality (AR) and Virtual Reality (VR) devices are projected to become billion dollar industries by 2021. Enabling unique forms of brand messaging in immersive worlds, there may not be a more compelling way to reach prospects.
• Mobile Wallets may very well become a replacement for credit cards within the next few decades, and provide businesses a unique way to partner with payment providers to offer promotions, discounts and coupons that will attract customers to businesses they never would have frequented before.

The iPhone X impressively manages to integrate all of these technologies. It goes without saying that iOS 11 will contain Apple’s digital voice assistant Siri; on top of that, it has finally caught up with Android devices in the adoption of NFC and RFID. Apple Pay will allow adopters of the X to use their phone as a mobile wallet.

But one feature in particular has caught the eye of most commentators: the iPhone X’s 3D camera, and VR capabilities.

3D cameras are not new, and neither is augmented reality. But iterations we’ve seen on mobile devices until now have been lacking in many respects. So when Apple’s Phil Schiller says that the device is “specially tuned” for AR, we have a gleam of hope that Apple has done for AR what it always does for new technologies.

Nothing in the iPhone X is new. Nothing in the original iPhone was new either — Apple did not invent the touch screen, mobile operating systems, WiFi, or accelerometers. The company’s role in changing the world has rarely been innovation, but the refinment of existing ideas.

By combining many different emergent technologies with marketing applications in elegant and sophisticated ways, the iPhone X just might revolutionize marketing again.

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Brandon Shutt, Editor at OMI