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Your Million-Dollar Smartphone

July 2012

Think about it. If you have an iPhone or other smartphone in your pocket, think about all the things you can do in addition to making calls: take photos, shoot video, listen to music, and more. And think about how much each of these technologies originally cost as separate devices. If you add up the original costs, as Peter Diamandis has done, your phone is worth a million dollars. Let's take a look.

Start with the video player. Most every smartphone lets you watch videos on its screen, including full movies. When the Toshiba V-8000 video player was introduced in 1981 it cost $1,245. In today's dollars, adjusting for inflation, that would translate to $3,103.

Your smartphone is not only a video player, it's typically also a video recorder. A video camera back in 1981, the RCA CC010, would have cost you $2,617 in today's dollars. Also, a digital voice recorder feature on many phones would have cost a solid chunk of change back in 1978, with the Sony PCM coming in at $8,687 in today's dollars.

Add in the lowly 5-megapixel digital camera on your smartphone. In 1986 the Canon RC-701 would have set you back $6,201 in today's dollars.

Or consider the encyclopedia of information available to you via your phone, including many Wikipedia apps. Compton's 1989 CD Encyclopedia cost $1,370 in today's dollars.

That all adds up to $21, 528. Not bad, considering that you probably paid in the neighborhood of $100–200 for your smartphone. But that's still far away from a million. Two additional technologies available on your phone are the biggies: videoconferencing and GPS.

We pretty much take Skype videoconferencing for granted these days. Most phones are capable of videoconferencing using Skype or some other app such as FaceTime on the iPhone. And it's free! How much would this have cost you back in 1982, with the introduction of Compression Labs VDC? That would be $586,904 in today's dollars.

And GPS, wonderful GPS. It's so much harder to get lost these days, and so much easier to navigate in an unfamiliar city with the GPS and maps features of your smartphone. Back in 1982, around the time when the Navstar satellites were first being launched, a TI Navstar GPS system would have cost you $279,366 in today's dollars.

That all totals nearly $900,000 in today's dollars, and it doesn't include many additional functions that could have been added. Diamandis points out that services once available only to the wealthy are now pretty much free — your main expense is the small cost of your smartphone and your cell phone plan.

This comes from his recently published book titled Abundance. He argues that "dematerialization" is one of the drivers of a future of abundance, when all the needs of every person are met. All of these functions of your smartphone at one time required separate, and expensive, devices. But they're all now in one small, inexpensive phone.

An interesting tidbit: the Osborne Executive computer was state of the art in mobile computing back in 1982, with its 7-inch CRT screen,124K memory, and 4 MHz processor. It cost $2,495 and weighed 28 pounds. Today, an iPhone weighs 1/100th as much, and costs just 1/10th the price, but it has 150 times the processing power and 100,000 times more memory. That's dematerialization.

Part of the import of dematerialization is that this powerful technology is becoming so widely available. Diamandis says that the online community will grow from 2 billion users in 2010 to 5 billion by 2020. Even in Africa, mobile penetration is expected to grow to 70% by next year. All those connected brains worldwide are also part of the transformation we're seeing. "Their collective economic and creative boost should unleash the most powerful abundance force of all," he says.

In the new book The Mobile Wave, Michael Saylor says that smartphones and tablet computers are becoming "the universal computing platform for the world. In the hands of billions of people and accessible anywhere and anytime, mobile computers are poised to become an appendage of the human being and an essential tool for modern life."

More important than the functions listed above, Saylor says that ubiquitous mobile technology gives everyone the opportunity to have a world-class education. Riches of knowledge are available to every connected person that were at one time available only to the elite.

And the networking that mobile technology affords is a driving force behind a leveling of entrenched power and a rise of democratization in the face of authoritarian regimes.

All this, and more, thanks to the million-dollar smartphone in your pocket.

This month's hot tips:

Find free classic movies at www.bigfiveglories.com. Google's driverless car now has a driver's license.

© 2012 by Jim Karpen, Ph.D.

E-mail Jim Karpen