Apple's (AAPL) revolutionary device highlighted the capabilities of mobile networks and helped inspire the vast array of apps and services that are now common on even the cheapest rival phones. As it did so, the iPhone forever changed mobile broadband, which had been a kind of walled garden under the control of the wireless carriers. Today the iOS and Android operating systems define wireless broadband, and Apple Inc. and Alphabet Inc.'s (GOOGL) Google hold the keys to the garden.
While the Apple and Android app stores are now cutting edge marketplaces that draw talented developers and entrepreneurs, a decade ago the phone interface was a comparably boring and limited ecosystem.
"If you wanted to get anything on there it would have to be approved by the carrier themselves in their own app store," BTIG LLC analyst Walt Piecyk said. "Today that app store is controlled by Apple."
AT&T Inc. and Verizon Communications Inc. are trying to wrestle back control of the customer experience. AT&T launched the DirecTV Now streaming service, while Verizon has developed the go90 video app.
"All of these things are battles for the customer attention," Piecyk said.
The changes to the wireless industry run deeper than the screen on your iPhone or Android device.
"While AT&T and Verizon may have considered their competitors to be Sprint or T-Mobile ten years ago, today AT&T and Verizon look at their competitors as Google and Amazon (AMZN) and [companies] like that," Piecyk said. "A lot of that is enabled by the phone and the app store and how that works."
Editors' pick: Originally published June 29.
The iPhone also helped alter the balance of power among carriers, with AT&T now one of the dominant providers. Back when it struck the deal to become Apple's first exclusive carrier, however, things were different. The telecom was formed by the 2004 merger of Cingular and AT&T Wireless, both of which were weak. AT&T's network struggled to carry the data loads in big cities such as San Francisco and New York. Landing the iPhone gave it a competitive advantage that helped the company grow into an effective rival for Verizon.
In exchange for giving AT&T an exclusive contract, however, Roger Entner of Recon Analytics LLC explained that Apple gained more control over the interface, the app store and the relationship with the customer.
"The monetization of wireless content is now going to the operating system providers instead of going through the walled garden of the operator," Entner said. "From that perspective, the industry has changed completely."
AT&T's exclusive grip on the iPhone ended in 2011, when Verizon and Sprint also got the coveted device. T-Mobile USA Inc. was the last carrier to add the iPhone in 2013.
Today, the iPhone is something the carriers use to bludgeon each other via special offers. When Apple releases the tenth-anniversary edition later this year, another aggressive round of promotions will undoubtedly follow as the carriers attempt to lure new customers to their networks.
Competition for wireless subscribers has already increased with the launch of unlimited plans. AT&T, Verizon, Sprint and T-Mobile will need more than a marketing strategy to change the real balance of power in wireless, however.
"Carriers used to be in the center of the telecom universe. They no longer are," Entner said. "Now it's Apple and Google."
Apple's shares closed down 1.4% to $143.85 on Thursday.