The success of the iPhone and the success of Apple, Inc. were by no means obvious to everyone in January 2007 when Steve Jobs unveiled Apple’s late entrance into the smartphone market with the iPhone, six months before it went on sale in the summer of 2007. Fifteen years later, when Apple’s stock price (split-adjusted) has gone from $3 a share (December 2006) to $170 or $180 a share (December 2021)—and ignoring the reinvestment of dividends this is still about 60x—it just seems inevitable today that iPhone would be a gigantic, unprecedentedly successful product and steamroll entire industries and change the world. But that is historical revisionism.
Even very smart people and herds of wealthy investors are still quite stubborn and generally will not believe something until they have been bludgeoned over the head with obvious facts for so long that it will be too late to profit from the knowledge. Those of us with eyes to see, in 2007 and 2008 and 2009, could tell that iPhone was the harbinger of the future mobile-first, all-screen-smartphone world. Yet, I will record here a reminder that many contemporary tech pundits, industry experts, and cloudy-ball-gazing analysts were just dead wrong about what was unveiled before them, at the time. In other words, there was a time … when investing in Apple was a contrarian, risky investment. Even after the iPhone was announced on stage in 2007! For many years!
Steve Ballmer, CEO of Microsoft, laughed at iPhone’s price and pitched cheaper Windows Phone models (which paled in terms of ease of use). RIM CEO Jim Balsillie reportedly let himself be convinced, in otherwise serious company meetings, that Jobs’ iPhone demo was faked, and that the iPhone was therefore not a credible threat to BlackBerry. Ed Colligan, head of Palm, said in December 2006, concerning potential threats from Apple, “We’ve struggled for a few years here, figuring out how to make a decent phone. The PC guys are not going to just, you know, knock this out.” And many smart tech pundits (Tim Bray) and analysts made it clear (even in 2009) that they thought people would resist switching from a hardware keyboard on their smartphones to a touchscreen software keyboard.
It is true that hardware keyboards are better for typing on. However, it is also true that an all-screen phone is worth all of the trade-offs. Furthermore, the world is now smartphone-first, in terms of primary computing device, and therefore high-end experiences on these devices could justify a higher price point. (Ask a teenager today in 2022 about Palm or Research In Motion or BlackBerry or Windows Phone or hardware phone keyboards and they will just look at you like you are speaking a foreign language.)
So the point is that many things are obvious in hindsight, and some things are even kind of sort of obvious looking forward, but not everyone will always correctly predict the future, even given all of the same publicly available information.
In that spirit, cryptocurrency is a dangerous con and is in for a wild, unpleasant ride. Check back here in 2037, if not sooner.
(Update June 28, 2022, from a recent news article: “Across the industry, investors have endured staggering losses. Bitcoin, the most prominent cryptocurrency, was trading Monday near $20,700, far below its November peak of roughly $69,000. Meanwhile, the market value for all cryptocurrencies stood just below $1 trillion; seven months ago, that figure approached $3 trillion.” When the emperor has no clothes and everyone realizes it all at once, it’s just really awkward all around. I’m not sure I expected this to turn around this fast but there is still a long way for it to go down. I’m sure by 2037 the bottom will be much lower! If anyone tells you that no one could have seen this coming, send them a link to this article. Groupthink is common, but knowing which received wisdom to question is rare.)