January turned out to be a pretty big month for consumer tech in 2007. The media was buzzing about last week's 10th anniversary of Apple's (NASDAQ:AAPL) Steve Jobs taking the stage to peel back the curtain on the iPhone. Yesterday was the seemingly less buzzworthy 10th anniversary of Netflix (NASDAQ:NFLX) announcing that its DVD-by-mail renters would soon be able to stream video content.
The announcements were just eight days apart, but they would go on to change the world. The smartphone has arguably become the most important consumer tech innovation ever. Apple may not have been the creator of the smartphone, but the iPhone made it aspirational to the masses. Netflix wasn't the first upstart to serve up video streams, but the built-in base of millions of couch potatoes and its aggressive pricing made it the niche's undisputed early leader.
Two pretty big ideas
The iPhone and Netflix streaming announcements had a couple of things in common. They were made in January, but both pointed to products that would be available in June. The iPhone hit the market in late June. Netflix would begin rolling out streaming in beta in the weeks following the original announcement, but it had also pointed to June for nationwide availability.
Another thing that the iPhone and Netflix streaming have in common is that they weren't hits out of the gate. The original iPhone was so expensive that Apple had to institute a $200 price cut less than three months into retail availability. There was no App Store, and the camera only took photos. It was only available through a single wireless carrier. Netflix streaming was initially limited to just 1,000 films and TV shows, and it could only be viewed on Windows-based PCs.
Things would go on to change quickly for both offerings. The App Store launched a year later, boosting the iPhone's functionality the way that iTunes fortified the iPod. Netflix became available through internet-tethered Xbox game systems and Blu-ray players, making it more seamless for subscribers to stream content through their home theaters.
Toasting the next decade
The iPhone and Netflix streaming are still going strong. The former may be going through a slump in sales growth, but it continues to be the driving earnings force for the world's most valuable consumer tech company. The latter went from offering streaming a decade ago to its 5.7 million DVD-based subscribers at no additional cost to an audience of 86.7 million accounts that are willing to pay for the streaming platform on its own.
Apple and Netflix have been just as game-changing for its investors. Apple stock has soared 800% since its iPhone announcement. Netflix stock has soared 4,014% since its niche-defining news. The next 10 years are unlikely to be as financially rewarding for investors, but even in a competitive field, the brand and momentum advantages of Apple and Netflix should continue to serve shareholders well.
Rick Munarriz owns shares of Apple and Netflix. The Motley Fool owns shares of and recommends Apple and Netflix. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool has a disclosure policy.