I’m constantly challenging myself to think differently in my quest for the next great antique. And one of the questions I’ve recently pondered is “What luxury item today will become tomorrow’s investment grade antique?” In many ways, the original Apple iPhone, released in 2007, is an obvious answer to this query. It fulfills most of the five requirements for an investment worthy tangible. The original iPhone is portable, ruggedly constructed from quality materials, fairly durable, and certainly embodies the stylistic zeitgeist of the age.
I know you’re thinking I’m slightly crazy. But the idea really isn’t as unreasonable as it might seem at first. For instance, a working example of a vintage Apple I desktop computer sold at auction for a record $905,000 in 2014. This computer originally retailed in 1976 for $666.66. You could have purchased one of these machines in new condition for the full retail price in 1976 and then simply tossed it into a closet to gather dust. Had you done so, you would have been rewarded with an annualized return of 20.90% per annum over the 38 year period from 1976 to 2014. In contrast, the S&P 500 index, although performing admirably over the same time frame, only managed 11.31% per year.
Alas, I hate to dash your dreams of future iPhone riches, but those sweet returns will not repeat with Apple’s first smartphone. One big reason is rarity. The Apple I computer was the Apple corporation’s very first computing device. It was designed and hand assembled by Steve Wozniak, co-founder of Apple, friend of the late Apple CEO Steve Jobs, and a technology titan in his own right. This strong link to the origins and founders of the company absolutely boosts the desirability of that model.
Only about 200 of the Apple I computer were produced in total. On the other hand, over 6.12 million units of the original Apple iPhone were manufactured via hapless Chinese sweatshop labor. The iPhone is simply not desirable according to this metric. The Apple I computer is truly rare, with only an estimated 15 specimens still functional. There are undoubtedly hundreds of thousands of original iPhones still extant and that will probably still be the case several decades from now, as well.
Another problem for the investment prospects of the original Apple iPhone is that the device is already becoming a complete anachronism. Now, I suppose most antiques are anachronisms to some extent. But a late 19th century, Gorham sterling silver pitcher can still be used to serve lemonade, iced tea or any other cold beverage you wish. A vintage Longines mechanical wristwatch from the 1950s will not only still tell the time, but also help you look stylish while doing so, too.
However, an original Apple iPhone will be a fancy paperweight in the future. The model has already been declared obsolete by both Apple and all major cell service providers. The original iPhone stopped receiving software updates years ago. It is also questionable if you’ll even be able to power one on after a decade or two. An iPhone’s battery is non-user serviceable and, like all lithium-ion batteries, tends to gradually lose its ability to retain a charge over time.
Despite an original Apple iPhone’s case and screen being reasonably durable, its silicon-based circuitry isn’t as robust. This will prove problematic considering replacement parts are no longer being produced. Not that it matters much anyway. Ever since the original iPhone was declared obsolete by Apple in 2013, it can no longer be serviced at the Apple Genius Bar in retail locations. And given how difficult it is to repair an original Apple iPhone today, you can guess that it will be almost impossible to do so in another 50 years.
Finally, I would like to point out that a big reason the Apple I computer can command such high prices is because of how popular Apple devices are at the current time. Few people know this, but Apple was very close to bankruptcy in 1997. If the company had liquidated then, instead of going on to pioneer the modern smartphone, we would not be talking about that record breaking auction for the Apple I computer.
Instead, the Apple I computer would have remained an oddity from the dawn of the personal computing age, primarily of interest to hardcore technology nerds. So acquiring an original Apple iPhone now is actually a huge bet on Apple remaining a dominant technology company for the next half a century. In a business sector as competitive and cutthroat as technology, I would not want to make that wager.
