The iPhone turns ten

NO PRODUCT in recent history has changed people’s lives more. Without the iPhone, ride-hailing, photo-sharing, instant messaging and other essentials of modern life would be less widespread. Shorn of cumulative sales of 1.2bn devices and revenues of $1trn, Apple would not hold the crown of the world’s largest listed company. Thousands of software developers would be poorer, too: the apps they have written for the smartphone make them more than $20bn annually.

By any measure, the iPhone, which hit the shelves in America ten years ago this week, has been an extraordinary success. But it is also exceptional for a less obvious reason: it has allowed Apple to become the only consumer-oriented technology giant whose business model does not rely on collecting reams of personal data, usually in order to target advertising to users. Tim Cook, Apple’s chief executive, has made the company’s stance part of his sales pitch, calling privacy a fundamental human right. That distinctive approach may not be sustainable, however. Indeed, how Apple deals with data will be more important in determining its success over the next ten years than the endless questions over the firm’s ambitions for TV sets or cars.

Founded more than 40 years ago, Apple started out as a maker of computers that tightly integrate software and hardware. That history continues to define its products. Instead of hoovering up all kinds of user data into its computing cloud for analysis, for instance, Apple leaves them on the iPhone. Its new speakers, launched earlier this month, will only retain speech data for a few months; competing products, such as Amazon’s Echo, keep them forever. Apple’s mobile web-browser, Safari, even comes with software that blocks unwanted advertisements.

But the era of stand-alone electronic devices, however slick, is coming to an end. They will increasingly become a vehicle for—and be subsidised by—services based on machine learning and other artificial-intelligence techniques. The quality of these offerings will in turn largely depend on how much data developers have access to. The more questions a digital assistant hears, for example, the better its answers will be. Although Apple’s Siri was one of the first digital assistants, Google’s and Amazon’s offerings are now much smarter.

To stay competitive, particularly as rival devices powered by Google’s Android operating system have become almost as good as Apple’s, the firm will come under increasing pressure to collect more data and make greater use of them. The opportunity for Mr Cook is to make Apple a model for how to balance the benefits of data and the right to privacy. That means being transparent about what type of data it collects and how it will use them. It means leaving users in charge of their data as much as possible, as it already does with health and fitness data on iPhones. It might also mean experimenting with new data-sharing models—for instance, paying consumers if they contribute valuable types of health information.

Sprawled garden

None of this will give Apple a run to match the extraordinary one it has had in the past ten years—if only because no product is likely to match the iPhone’s combination of premium prices and insatiable customer demand. But as other firms come under pressure to rein in their usage of data—Google was fined by European trustbusters this week for abusing its dominance in online search—Apple has a chance to set standards again. A decade from now, the world might be admiring Apple not for another “insanely great” device, but for finding a workable compromise between the promises of AI and the right to privacy.