The Million-Dollar iPhone
What If You’d Invested in Apple Instead?
By Blaise Stevens, Managing Member, Strategic Advisory Partners
Picture this: It’s 2007, and you’re standing in line at the Apple Store, excited to be one of the first to get your hands on the revolutionary new iPhone. You fork over $499 for this shiny new device, feeling pretty good about your purchase.
But what if—and stay with me here—what if instead of buying that iPhone, you had invested that $499 in Apple stock?
Today, you’d be looking at over $1 million in your investment account.
Yes, you read that right. One. Million. Dollars.
Every year, millions of consumers eagerly line up to purchase the latest iPhone, spending hundreds of dollars on Apple’s flagship product. But this fascinating counterfactual scenario reveals striking insights about opportunity cost, the time value of money, and the power of dividend reinvestment that we at Strategic Advisory Partners believe everyone should understand.
The $499 That Could Have Made You a Millionaire…
Let’s break this down, because frankly, these numbers are jaw-dropping:
- Original iPhone price in 2007: $499
- Value if invested in Apple stock without dividends: $200,402
- Value with dividend reinvestment: $1,072,011
- Return multiple: 2,148x
- Annualized return: 54.3%
That’s the power of investing in great companies early and letting time work its magic. Your $499 would have multiplied more than 2,000 times over the past 17+ years!
But What About All Those Upgrades?
If you’re like most of us at Strategic Advisory Partners, you probably didn’t just buy one iPhone. Maybe you’ve upgraded every couple of years. So let’s look at what would have happened if you’d invested the purchase price of each new model instead:
Even the more recent investments would have given you impressive returns. That iPhone 8 purchase in 2017? It would have nearly octupled your money in just 7 years.
The Not-So-Secret Ingredient: Time
You might notice something interesting in those numbers. While the total returns vary dramatically between models, the annualized returns tell a more consistent story. Most iPhone investments delivered annual returns between 25-71%—absolutely crushing the average stock market return of around 10%.
This illustrates one of our favorite mantras at Strategic Advisory Partners: Time in the market beats timing the market.
The iPhone 5S investment from 2013 shows the highest annualized return at a staggering 71.2%. But even the most recent iPhone 16 investment shows a strong 26.7% annualized return. That’s Apple’s remarkable business performance at work!
The Magic of Reinvesting Dividends
Here’s where things get really interesting. Remember how Apple resumed paying dividends in 2012 after a 17-year break? For investments made before and shortly after this dividend resumption, the impact of reinvesting those dividends has been nothing short of magical:
- Early iPhone investments (2007-2013) saw a 350-435% boost just from dividend reinvestment
- For the original iPhone investment, dividend reinvestment alone added $871,609 to your returns
- That’s an additional 435% in value from simply reinvesting those quarterly payments
Let that sink in. The dividends from your $499 investment would have generated more than $870,000 in additional wealth!
Here’s the detailed breakdown showing the power of dividend reinvestment:
Time Value of Money and Opportunity Cost
Every purchase decision has an implicit opportunity cost—what you give up when making that choice. At Strategic Advisory Partners, we always consider the time value of money when evaluating investment opportunities. Using a standard 7% discount rate to analyze the time value of money:
- Present value of all iPhone purchases (2007-2024): $7,909.92
- Current value if all were invested in AAPL with dividend reinvestment: $4,739,299
- Return multiple on present value: 599x
This means that even when adjusting for the time value of money (the principle that a dollar today is worth more than a dollar in the future), the investment strategy would have yielded an extraordinary return.
The Real-World Reality Check
Now, I can hear you saying, “Sure, but nobody could have known Apple would perform this well!”
You’re absolutely right. Hindsight is 20/20, and we’re not suggesting you should have known to invest in Apple instead of buying their products.
Plus, iPhones provide real utility. They keep us connected, productive, and entertained. There’s value in that which doesn’t show up in investment returns.
But here’s the bigger lesson: Every purchase decision carries an opportunity cost. That’s something we help our clients understand every day.
If you had invested the cost of ALL iPhone models from 2007-2024 (about $13,581 total), you’d be sitting on nearly $4.7 million today. That’s a 349x return on your money!
According to data from Statista, the average smartphone user in the United States upgrades their device every 2.75 years. This suggests that most consumers value having the latest technology more than the potential investment returns—even when those returns are substantial.
What This Means For Your Financial Future
At Strategic Advisory Partners, we’re not in the business of making you feel bad about your past spending decisions. We’re in the business of helping you make better choices for your financial future.
So what actionable wisdom can we take from this Apple example?
Start Investing Early
Even small amounts can grow significantly over time.
Reinvest Your Dividends
Let compounding work its full magic.
Consider Opportunity Costs
Every major purchase represents potential investment capital.
Look for Innovative Companies
Businesses that transform industries can deliver extraordinary returns.
Stay Invested for the Long Haul
The power of compounding accelerates over time
Think Different About Your Finances
Next time you’re about to spend $800 on the latest tech gadget (no judgment, we love our devices too!), take a moment to consider: what might this money be worth if invested instead?
That’s the kind of thoughtful financial decision-making we promote at Strategic Advisory Partners. We help you balance enjoying life today while building wealth for tomorrow.
Want to talk more about finding your own “Apple investment opportunities” or creating a comprehensive wealth management strategy? Our team at Strategic Advisory Partners is just a phone call away.
Remember, the best time to invest was 20 years ago. The second-best time is today!
References
[^1]: Apple Inc. (2007). “Apple Introduces iPhone.” [Press Release]. Retrieved from Apple Newsroom Archives.
[^2]: Apple Inc. (2012). “Apple Announces Plans to Initiate Dividend and Share Repurchase Program.” [Press Release]. March 19, 2012. Retrieved from Apple Investor Relations.
[^3]: Damodaran, A. (2023). “Equity Risk Premiums: Determinants, Estimation and Implications.” New York University Stern School of Business. This paper establishes the standard 7% discount rate commonly used in finance.
[^4]: Statista Research Department. (2024). “Frequency of smartphone replacement in the United States from 2017 to 2024.” Statista Consumer Market Outlook.
[^5]: S&P Global Market Intelligence. (2024). “AAPL vs. S&P 500 Total Return Performance (2007-2024).” Capital IQ Platform.
[^6]: McKinsey & Company. (2023). “The power curve of performance: Characteristics of outperforming companies.” McKinsey Global Institute Analysis.
[^7]: Yahoo Finance. (2025). “Apple Inc. (AAPL) Historical Data.” Retrieved March 1, 2025. Used for historical stock prices and dividend data.
[^8]: Stock Split History data from Apple Investor Relations website, historical records (2000-2024).
