Carpe Diem

How much would it have cost to duplicate an iPhone in 1991? Amazingly, more than $3,500,000

radioshackadCD post a few weeks ago featured a comparison of the cost of 13 products advertised by Radio Shack in 1991 ($3,055 in 1991, $5,255 in 2013 dollars) to today’s iPhone (see photo above).

Earlier this week, Bret Swanson expanded the analysis and crunched some numbers to answer the question: “How Much Would an iPhone Have Cost in 1991?” Here’s what he found:

Considering only memory, processing, and broadband communications power, duplicating the iPhone back in 1991 would have (very roughly) cost: $1.44 million + $620,000 + $1.5 million = $3.56 million.

This doesn’t even account for the MEMS motion detectors, the camera, the iOS operating system, the brilliant display, or the endless worlds of the Internet and apps to which the iPhone connects us.

This account also ignores the crucial fact that no matter how much money one spent, it would have been impossible in 1991 to pack that much technological power into a form factor the size of the iPhone, or even a refrigerator.

But the fact that so many were so impressed by an assertion that an iPhone possesses the capabilities of $3,000 worth of 1991 electronics products – when the actual figure exceeds $3 million – reveals how fundamentally difficult it is to think in exponential terms.

HT: Colin Grabow

6 thoughts on “How much would it have cost to duplicate an iPhone in 1991? Amazingly, more than $3,500,000

  1. I’ve posted it before — JFK’s speech at Houston (1962) on why we are going to the Moon, speech given a year and half after he announced it to the nation.
    https://www.youtube.com/watch?v=VaFTVR-hZqg

    I don’t know about the iPhone in 1991; but, if you listen to JFK we are going to the Moon and back in the ’60s even though we don’t have the materials or the technology at this time.

    Anybody who has worked in R&D will tell you it is called pushing the technology. Another word — Leadership!

    • Steve Jobs provided the leadership in bringing the iPhone to market in 2007 — a smartphone for the masses with cheap killer apps that replaced a myriad of devices.

  2. Very good illustration as to why comparing GDP per capita for two (relatively) widely separated years underestimate the real improvement in the standard of living (even if one uses constant, PPP-adjusted dollars). This is especially true if there have been large technological changes in the interim. As noted in The Improving State of the World, Cato Institute, 2007, pp. 45-46:

    …[C]omparing so-called real GDP per capita for any two years separated by even as much as a generation apart can lead to a very misleading picture of the magnitude of changes. This is especially true during periods of rapid technological change. The goods and services which could be purchased in the year 1200, for instance, were probably not all that different from what could be purchased in 1100 or 1300. But if we compare 2000 with 1970, for instance, we can identify several goods and services (for e.g., personal computers, cell phones, VCRs, and instant access to the Library of Congress’s electronic catalogue) which simply were not available or, if they were, it was at prices that exceeded the per capita GDP of the richest nations (at that time). Clearly, you can buy a lot more with $1,000 (in constant dollars) today than you could in the year 1800 or, for that matter, 1900, and the improvements in the level of economic development shown in Figure 2-11 are substantial underestimates.

  3. That means that something that costs $3M to make today, will cost $200 in 2035!!

    It is not quite that simple, of course. Not to mention that the same amount of memory and processing power, in 1991, would also be as large as a refrigerator, in addition to the cost indicated.

  4. These analysises are veryndifficult because there is some technology in the phone that was unavailable at any price. In fact you probably couldn’t go back more than 5 years to not be able to make a current high end phone impossible to manufacture at any price.

  5. Even if the prices are matched, not sure whether the performances are matched though. Guess iPhone still on the top side. Same as this, wonder how the comparison would be after 15 years from now.

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