Enjoy your $3.56M iPhone

TangoWhiskey

TangoWhiskey

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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.

Very interesting article here:
http://www.techpolicydaily.com/communications/much-iphone-cost-1991/
Today’s iPhones have the same capabilities (and more!) than 13 distinct electronics gadgets, worth more than $3,000, found in a 1991 Radio Shack ad. Buffalo writer Steve Cichon was the first to dig up the old ad and make the point about the seemingly miraculous pace of digital advance, noting that an iPhone incorporates the features of the computer, CD player, phone, “phone answerer,” and video camera, among other items in the ad, all at a lower price. The Washington Post‘s tech blog The Switch picked up the analysis, and lots of people then ran with it on Twitter. Yet the comparison was, unintentionally, a huge dis to the digital economy. It massively underestimates the true pace of innovation and, despite its humor and good intentions, actually exposes a shortcoming that plagues much economic and policy analysis.

To see why, let’s do a very rough, back-of-the-envelope estimate of what an iPhone would have cost in 1991.
In 1991, a gigabyte of hard disk storage cost around $10,000, perhaps a touch less. (Today, it costs around four cents ($0.04).) Back 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 ($0.55).)

The mid-level iPhone 5S has 32 GB of flash memory. Thirty-two GB, multiplied by $45,000, equals $1.44 million.

The iPhone 5S uses Apple’s latest A7 processor, a powerful CPU, with an integrated GPU (graphics processing unit), that totals around 1 billion transistors, and runs at a clock speed of 1.3 GHz, producing something like 20,500 MIPS (millions of instructions per second). In 1991, one of Intel’s top microprocessors, the 80486SX, often used in Dell desktop computers, had 1.185 million transistors and ran at 20 MHz, yielding around 16.5 MIPS. (The Tandy computer in the Radio Shack ad used a processor not nearly as powerful.) A PC using the 80486SX processor at the time might have cost $3,000. The Apple A7, by the very rough measure of MIPS, which probably underestimates the true improvement, 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.

But there’s more. The 5S also contains the high-resolution display, the touchscreen, Apple’s own M7 motion processing chip, Qualcomm’s LTE broadband modem and its multimode, multiband broadband transceiver, a Broadcom Wi-Fi processor, the Sony 8 megapixel iSight (video) camera, the fingerprint sensor, power amplifiers, and a host of other chips and motion-sensing MEMS devices, like the gyroscope and accelerometer.

In 1991, a mobile phone used the AMPS analog wireless network to deliver kilobit voice connections. A 1.44 megabit T1 line from the telephone company cost around $1,000 per month. Today’s LTE mobile network is delivering speeds in the 15 Mbps range. Wi-Fi delivers speeds up to 100 Mbps (limited, of course, by its wired connection). Safe to say, the iPhone’s communication capacity is at least 10,000 times that of a 1991 mobile phone. Almost the entire cost of a phone back then was dedicated to merely communicating. Say the 1991 cost of mobile communication (only at the device/component level, not considering the network infrastructure or monthly service) was something like $100 per kilobit per second.

Fifteen thousand Kbps (15 Mbps), multiplied by $100, is $1.5 million.

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.

Tim Lee at The Switch noted the imprecision of the original analysis and correctly asked how typical analyses of inflation can hope to account for such radical price drops. (Harvard economist Larry Summers recently picked up on this point as well.)

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.

Innovation blindness, I’ve long argued, is a key obstacle to sound economic and policy thinking. And this is a perfect example. When we make policy based on today’s technology, we don’t just operate mildly sub-optimally. No, we often close off entire pathways to amazing innovation.

Consider the way education policy has mostly enshrined a 150-year-old model, and in recent decades has thrown more money at the same broken system while blocking experimentation. The other day, the venture capitalist Marc Andreessen (@pmarca) noted in a Twitter missive the huge, but largely unforeseen, impact digital technologies are having on this industry that so desperately needs improvement:
“Four biggest K-12 education breakthroughs in last 20 years: (1) Google, (2) Wikipedia, (3) Khan Academy, (4) Wolfram Alpha.”​
​

Maybe the biggest breakthroughs of the last 50 years. Point made, nonetheless. California is now closing down “coding bootcamps” — courses that teach people how to build apps and other software — because many of them are not state certified. This is crazy.

The importance of understanding the power of innovation applies to health care, energy, education, and fiscal policy, but nowhere is it more applicable than in Internet and technology policy, which is, at the moment, the subject of a much needed rethink by the House Energy and Commerce Committee.
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Utterly meaningless.

iPhones could easily accomplish their functions with far less speed and memory. Because those commodities are very cheap, they don't bother optimizing them. Modern software is VERY wasteful. Yes, that brings the price down, but the phone wouldn't cost anywhere near the millions claimed if it were properly optimized. It might if you wanted to make an iPhone that looked and operated exactly like one today, but the higher cost of some commodities would have made a different iPhone.

It may be hard for people to comprehend, but the Phone Company (there was only one) operated on 64 Kb workspaces in 1970. And you could still make the same types of voice direct-dial phone calls all over the world as you can today.

A breakdown by function is only slightly more meaningful.

The last two sentences expose the real agenda. "Coding bootcamps" are for-profit trade schools and suffer all the quality and financial problems that other for-profit trade schools do. Like alums not getting jobs and defaulting on loans.
 
How much did 64GB of flash memory cost in 1991? I'm sure it only ran $30 back then too. :rolleyes:
MP3s are still x/MB per minute of song length whether 1991 or 2016
 
EdFred said:
How much did 64GB of flash memory cost in 1991? I'm sure it only ran $30 back then too. :rolleyes:
MP3s are still x/MB per minute of song length whether 1991 or 2016
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At the end of 1991, 64 GB of memory I believe would have cost $2,621,440. Cost was $40/ MB at that point.

Got my cost / MB from here: http://www.jcmit.com/memoryprice.htm.

Today the cost per MB is $0.0037
 
MAKG1 said:
Utterly meaningless.

iPhones could easily accomplish their functions with far less speed and memory. Because those commodities are very cheap, they don't bother optimizing them. Modern software is VERY wasteful. Yes, that brings the price down, but the phone wouldn't cost anywhere near the millions claimed if it were properly optimized. It might if you wanted to make an iPhone that looked and operated exactly like one today, but the higher cost of some commodities would have made a different iPhone.

It may be hard for people to comprehend, but the Phone Company (there was only one) operated on 64 Kb workspaces in 1970. And you could still make the same types of voice direct-dial phone calls all over the world as you can today.

A breakdown by function is only slightly more meaningful.

The last two sentences expose the real agenda. "Coding bootcamps" are for-profit trade schools and suffer all the quality and financial problems that other for-profit trade schools do. Like alums not getting jobs and defaulting on loans.
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Truth

About 4 years ago I had a 500ish MHZ IBM laptop, very small and thin, didn't look old and I got it for free, ran a streamlined Linux distributions and used it as my daily laptop, got a kick out of how it would do the same mission as my peers thousand dollar plus machines, they would say, well if you want to do video editing or gaming, I'd ask how many hours they spend doing that a day, conversation ended lol
 
EdFred said:
How much did 64GB of flash memory cost in 1991? I'm sure it only ran $30 back then too. :rolleyes:
MP3s are still x/MB per minute of song length whether 1991 or 2016
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No, there are ways to optimize MPEG and trade quality for size. There are also other formats that have different tradeoffs. In 1991, there were in fact several in use. MP3 won out because memory got cheap.

People have been doing sound work for a long time before there were iThings.

In a world where memory was prohibitively expensive, you would also optimize your device around networking or streaming disk reads. The latter was very common. In fact, in the early 90s, people would have told you you're nuts to load an entire audio file that might be hours long into memory. Even if you did, it wasn't anywhere near as expensive as the article in question leads to believe.
 
Your talking about the amazing advances in technology that have been taking place since the advent of the computer. Since that invention entered our lives as a common tool, our technological advances have surpassed all technological advances man has ever made prior to that point in time, in fact, my guess would be at least a thousandfold.
　

I'm thinking that in all probability we are riding on a technological high speed railway where all of our technological knowledge to date is being more than doubled every few years. We can not even realistically guess where we will be by the turn of this century. I truly believe it is beyond our comprehension.

When computers start building and improving on computers autonomously, I think that what we see taking place in a year now, will be taking place in less than seconds in our not too distant future.

Even with the glaring evidence of what is taking place, things that were claimed to be impossible just a decade ago, but are reality today, there are more than a few "experts" who claim that computers will never write their own programs, nor will they improve on themselves, they will never be completely autonomous. I don't believe I would take bets on that.

-John
　
　
 
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MAKG1 said:
No, there are ways to optimize MPEG and trade quality for size. There are also other formats that have different tradeoffs. In 1991, there were in fact several in use. MP3 won out because memory got cheap.

People have been doing sound work for a long time before there were iThings.

In a world where memory was prohibitively expensive, you would also optimize your device around networking or streaming disk reads. The latter was very common. In fact, in the early 90s, people would have told you you're nuts to load an entire audio file that might be hours long into memory. Even if you did, it wasn't anywhere near as expensive as the article in question leads to believe.
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Go ahead. Lets see you load up 16000 songs with any sort of decent sound quality on your precious 64k of memory you mentioned. I'll wait. Anything below about 128kbps sounds like crap. But you keep talking out of your...

Even if you don't put songs on it. It's still 64GB of memory that's available. That alone would have run millions in 91.
 
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EdFred said:
Go ahead. Lets see you load up 16000 songs with any sort of decent sound quality on your precious 64k of memory you mentioned. I'll wait. Anything below about 128kbps sounds like crap. But you keep talking out of your...

Even if you don't put songs on it. It's still 64GB of memory that's available. That alone would have run millions in 91.
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No. Not millions. Thousands.

I actually did some work in audio and video in the early 90's, so don't talk to me about "talking out of my ..." Just how much have you done?

CDs were around, with decent sound quality. That could have made a very decent device to center streaming around, with higher quality than any MP3 player. And the Sony Discman even existed in 1991, at prices of a few hundred dollars. Not millions. You could even burn CD-Rs then, though the recording devices were expensive and clunky. Still nowhere near millions.
 
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OK, so half a million just for the memory. A 40MB hard drive ran about 300 bucks in 90-91. So I get to lug around 1600 hard drives at 300 bucks a pop to get my 64GB of storage. Of course, that's spinning disk storage, not flash storage. Flash storage still runs higher than spinning disk even today, back then the delta was more. It would have been in the millions.

In 1991 SanDisk Corporation created a 20 MB solid state drive (SSD) [and that's about as close as we'll get for the equivalent of today's consumer available memory cards at that point in time] which sold for $1,000.

64000/20*1000 = $3.2MM
 
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MAKG1 said:
No. Not millions. Thousands.

I actually did some work in audio and video in the early 90's, so don't talk to me about "talking out of my ..." Just how much have you done?

CDs were around, with decent sound quality. That could have made a very decent device to center streaming around, with higher quality than any MP3 player. And the Sony Discman even existed in 1991, at prices of a few hundred dollars. Not millions. You could even burn CD-Rs then, though the recording devices were expensive and clunky. Still nowhere near millions.
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Not to mention DAT in 1987 and Minidisc arrived in 1992. Both were excellent.
 
EdFred said:
OK, so half a million just for the memory. A 40MB hard drive ran about 300 bucks in 90-91. So I get to lug around 1600 hard drives at 300 bucks a pop to get my 64GB of storage. Of course, that's spinning disk storage, not flash storage. Flash storage still runs higher than spinning disk even today, back then the delta was more. It would have been in the millions.

In 1991 SanDisk Corporation created a 20 MB solid state drive (SSD) [and that's about as close as we'll get for the equivalent of today's consumer available memory cards at that point in time] which sold for $1,000.

64000/20*1000 = $3.2MM
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A competent engineer does not let implementation drive design. Flash memory is not necessary for this capability.

The capability existed, MUCH cheaper than that. A touch screen with rounded corners, one big button (plus a couple of smaller ones) and an Apple logo on the back did not.

The argument that a digital music player would have cost over $3 million in 1991 is utterly, fantastically false, because they existed at the time for a few hundred.
 
I never said digital music player, that was your strawman. I was only pointing out the storage component of it and used the MP3 as a storage example of something to store on it. If you want we can talk about storing multi megabyte picture files instead. Or data files, or anything that you are going read/write multiple times with swapping out discs.

I would love to see your completely portable, battery operated, stand alone 1991 storage device/digital camera/sectioal chart holder/GPS/music player/phone/gyroscope/everything else is has that had 64GB of quick access persistent read/write memory that could be had for a few thousand.

Ricardo Montalban welcomes you.
 
EdFred said:
I never said digital music player, that was your strawman. I was only pointing out the storage component of it and used the MP3 as a storage example of something to store on it. If you want we can talk about storing multi megabyte picture files instead. Or data files, or anything that you are going read/write multiple times with swapping out discs.

I would love to see your completely portable, battery operated, stand alone 1991 storage device/digital camera/sectioal chart holder/GPS/music player/phone/gyroscope/everything else is has that had 64GB of quick access persistent read/write memory that could be had for a few thousand.

Ricardo Montalban welcomes you.
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The rather silly point of the article was that the separate devices were merged. You could make every last one of those devices separately, with spinning media or networks, for thousands, not millions.

You forgot to add "with an Apple logo" to that.

Your "completely portable" spec could not be met for any price in 1991. Have you thought about the space and power your unnecessary 64GB of 1991 memory would take? Solid state drives were "half height" for 20 MB. You'll need a wheelbarrow, not counting power.
 
MAKG1 said:
The rather silly point of the article was that the separate devices were merged. You could make every last one of those devices separately, with spinning media or networks, for thousands, not millions.

You forgot to add "with an Apple logo" to that.

Your "completely portable" spec could not be met for any price in 1991. Have you thought about the space and power your unnecessary 64GB of 1991 memory would take? Solid state drives were "half height" for 20 MB. You'll need a wheelbarrow, not counting power.
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I didn't forget anything. You've stretched so far from the point of the article it's absurd.

"Well, you could store 64GB worth of 1's and 0's on stone tablets, and stone is free!"
We're talking the most similar media here, not ANY media.
 
EdFred said:
I didn't forget anything. You've stretched so far from the point of the article it's absurd.

"Well, you could store 64GB worth of 1's and 0's on stone tablets, and stone is free!"
We're talking the most similar media here, not ANY media.
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No stretching is necessary to make this type of argument absurd.

Media adequate for every function you mentioned existed in 1991. It just wasn't flash memory. Don't get stuck on the details of this magic phone. People did listen to digital music in 1991, and several practical formats existed.

If you made this argument for 1971, you might have a point. But only because digital technology was much more limited at the time, and some of the capabilities hadn't been invented yet.
 
You're still stuck on digital music. Forget the digital music. I'm only talking the closest/most similar type of storage and price. That's SSD at $1000/MB. But it kills your argument, so I get why you are conveniently ignoring it and saying te equivalent of, "Well, you can carry around 200 CD-Rs so it's pretty much the same thing"

No. It's not the same.

Next thing, you'll be saying the 2016 Bugatti is the same thing a Model T because they are both cars.

Whatever man, it's not even close.
 
MAKG1 said:
The rather silly point of the article was that the separate devices were merged...
You forgot to add "with an Apple logo" to that.
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It's fascinating to look back 9 short years, at Steve Jobs mastery:


Watch the first four minutes or so if you don't remember it.

Sure, Android and Windows phones now equal or even surpass the iPhone in certain areas, but it's not often in our lifetimes we see a whole new class of devices, filling a need we didn't even know was there.
 
FastEddieB said:
It's fascinating to look back 9 short years, at Steve Jobs mastery:


Watch the first four minutes or so if you don't remember it.

Sure, Android and Windows phones now equal or even surpass the iPhone in certain areas, but it's not often in our lifetimes we see a whole new class of devices, filling a need we didn't even know was there.
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Won't see them ever again under Cook, either.
 
FastEddieB said:
Still remains to be seen.
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Multiple product releases already under him that have not shown an ounce of visionary innovation. iPencil isn't going to change the world.

It's gone and it isn't coming back under Cook.

Doesn't mean they won't be profitable and useful, but someone else will be making the really interesting stuff now.

Watched the engineering geeks at the office playing with the Samsung VR headset thing attached to one of the new phones the other day.

Surface already kicked their butt in hardware before that.

El Cap is incremental updates and a dated UI.

Phones and Pads have just barely kept up with the competition by getting bigger and slightly faster processors. They haven't kept up on cellular chipsets nor storage space.

Apple isn't even keeping up, let alone jumping ahead.

Losing ground on media distribution stuff too. And they were the first to really get music sellers to even allow it without DRM. They're totally lost in the woods as far as strategy there goes. Beats Radio? Laughable.

Dead ducks. Cook doesn't have the vision, the drive, nor the clout, to herd all the cats at the Infinite Loop.
 
We'll see.

As a shareholder with very nice gains over the years, of course I want them to succeed.

A large number of users, myself included, are quite happy with their products and ecosystem and it would take a lot to prompt a change to another platform. I appreciate the generally seamless integration of our iPhones, iPads, Macs and AppleTV, all connected via iCloud. Not to say it's perfect, nor that other platforms can't do the same things as well or better, just that most of the time it "it just works".

The proverbial "Death of Apple" has been presaged since at least the early '90's. Maybe it really is different this time around.

Time will tell.
 
I wonder what the cost would have been in 1783.
 
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