Invest Different. Top Returning Apple Memorabilia

Think different.

That’s what Apple implored us to do in the late 90s and early 2000s. And that’s exactly what you would have been doing if you came home from the Apple Store with the very first iPhone in 2007 and did nothing. Didn’t open it. Didn’t download any apps. Didn’t take any pictures and capture any memories. No, if you just kept that iPhone sealed in its box, frozen in time, you wouldn’t have been using a tech product at all.

As it turns out, you would’ve been investing.

It might not have looked the same, but just as Apple stock would’ve been ticking up in value in your Schwab account, so too was the value of that sealed treasure. Most recently, at an August RR Auction event, a sealed first generation iPhone sold for $35,413.75 (with buyer’s premium). Now, we know that iPhone did not come directly from a shrewd collector who bought on release day and kept it ever since - rather, it came from fractional investing platform, Otis, where it was offered at an IPO market cap of $13,100.

But let’s just pretend the owner was an Apple diehard that stood in line in 2007 and paid a retail price of $499. Gross of fees and taxes, that individual would’ve overseen annualized appreciation in the asset of 32% over the course of 15 years (the total appreciation would be 6,997%). Of course, factoring in the ultimate net proceeds to the seller, the return would be lower, but significant nonetheless. In fact, the trailing 15 year return of Apple stock is 28.06% per Morningstar.

While Apple memorabilia is not new to the company’s biggest fans, the explosion of that market really only took place in earnest over the past two years. It got us thinking: what Apple product, if bought at release and simply held, would have provided the largest financial gains? Fortunately, RR Auction has sold a number of these products over the last year, including a sealed first generation iPod at the same event as the iPhone. The company has also sold countless Apple I computers, though our selection is the most recent sale that does not materially distinguish it from one that would’ve been bought at retail (for instance, the prototype sold in this month’s event is disqualified). As the Apple I and the Lisa are older products, the expectation that they would be sealed is somewhat unreasonable, so we’ll settle for the data points we have.

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Here’s the underlying data.

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First Generation Apple iPhone

Release Date: 6/29/2007

Retail Price: $499

Sold for: $35,413.75

Sale Date: 8/18/2022

Total Appreciation: 6,997%

Gross Annual Appreciation: 32%

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First Generation Apple iPod

Release Date: 11/10/2001

Retail Price: $399

Sold for: $25,000

Sale Date: 8/18/2022

Total Appreciation: 6,166%

Gross Annual Appreciation: 22%

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Apple I Computer

Release Date: 4/11/1976

Retail Price: $666.66

Sold for: $468,750

Sale Date: 6/23/2022

Total Appreciation: 70,213%

Gross Annual Appreciation: 15%

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Apple Lisa Computer

Release Date: 1/19/1983

Retail Price: $9,995

Sold for: $94,949

Sale Date: 8/19/2021

Total Appreciation: 850%

Gross Annual Appreciation: 6%

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A few takeaways:

• While the iPhone and (perhaps to a lesser extent) the iPod are indeed transformational innovations, it might be fair to say that some future appreciation has been pulled forward into a moment of collectible frenzy. These are highly nascent markets, where considerable comfort around the volume of available supply and authenticity is lacking. Consider that only approximately 200 Apple I Computers were produced, and contrast that to the fact that 6.1 million units of the first generation iPhone were sold. Of those ~200, the present existence of 66 has been painstakingly verified, with another 20 likely identified. Now, iPhone supply is constrained by the burden of being sealed and in pristine condition in order to fetch top dollar, but still, it wouldn’t be unreasonable to have concerns around quantity. That being said, despite the memorabilia boom, they do not surface for sale often. In fact, this is the very first that RR Auction has sold.

• Just as was the case when it debuted in 1983, the Lisa suffers from an astronomically high retail price near $10k. For fun: if it was priced at the same level as the commercially successful Apple II ($1,298), recognizing the components were different and had different costs, the annualized appreciation would be 12%.

• There is, of course, some selection bias at play here. The returns on products like any of the infinite iPod variations, later-gen iPhones, the - gulp - Newton, and countless others would not show well.

• The winners seem incredibly obvious in hindsight. Of course! The iPhone transformed our lives. But that’s said with the benefit of hindsight. While surely cool, the iPhone was one of many entrants into a crowded and evolving mobile phone landscape. At the time, it wasn’t clear that Apple had effectively invented our future, and so keeping a device sealed was not exactly a no-brainer. For every sealed iPhone out there, there’s probably a sealed T-Mobile Sidekick or Blackberry. This type of collectible success would be immensely difficult to replicate in the present. First, physical product innovation - introductions of products that physically and irreversibly change our lives - are fewer and far between as sights turn instead towards digital innovation; NFT projects pulled forward future appreciation and then some. We don’t suspect that sealed Oculus products will deliver 32% annual appreciation. And if there were a seemingly clear bet to be made on a physical product, it would be made in an era of greater collectible enthusiasm and understanding than any prior historical era - that’s a crowded trade waiting to happen.

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