A typical iPhone would have cost $3.6 million two decades ago

Summary:The technology power available today in a typical smartphone was way out of reach just 20 years ago.

Today's typical smartphone replaces a wide range of equipment one would have purchased back in the early 1990s -- from computers to stereo equipment to cameras to clock radios. And, oh yeah, telephones. 
iPhone in use-photo by Joe McKendrick.jpeg
Photo: Joe McKendrick
 

Now, Bret Swanson of TechPolicyDaily.com has crunched some of the pricing behind these replaced items and more, coming up with an estimate as to what it would have cost to put together a high-functioning smartphone in 1991, comparable to today's iPhone: $3.6 million, versus the $100-$300 price tag (depending on deals) incurred when purchased with one of today's mobile plans.

This reflects the incredible advances in the availability and relative costs of technology in just two decades.

Here is Swanson's breakdown of costs, if one were to attempt to build a smartphone back in 1991:

Memory:  Up to $1.44 million for the typical 32 gigabytes of memory an iPhone holds. "In 1991, a gigabyte of hard disk storage cost around $10,000," Swanson points out. "Today, it costs around four cents." Plus, in 1991, "a gigabyte of flash memory, which is what the iPhone uses, would have cost something like $45,000, or more. Today, it’s around 55 cents. The mid-level iPhone 5S has 32 GB of flash memory. Thirty-two GB, multiplied by $45,000, equals $1.44 million."

Processor: A decent in-phone processor comparable to today's power would have cost $620,000. In 1991, a PC using the 80486SX processor at the time (yielding about 16.5 millions of instructions per second, or MIPS) might have cost $3,000, Swanson says. "The Apple A7... outpaces that leading edge desktop PC processor by a factor of 1,242. In 1991, the price per MIPS was something like $30. So 20,500 MIPS in 1991 would have cost around $620,000."

Network connectivity and bandwidth: At least $1.5 million. In 1991, a mobile phone connection (for basic communications) was about $100 per kilobit per second. The iPhone communications capacity is at least 10,000 times what it was for a mobile phone in 1991.

Swanson also had an interesting follow-up observation to his calculations: you can't make policy based on technology that quickly gets outmoded, or accelerates to new heights of adoption. By doing so, "we close off entire pathways to amazing innovation."

(HT: Mark Perry.)

This post was originally published on Smartplanet.com

Topics: Innovation

About

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. Joe is co-author, along with 16 leading industry leaders and thinkers, of the SOA Manifesto, which outlines the values and guiding principles of service orientation. He speaks frequently on cloud, SOA, data, and... Full Bio

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