Does the iPhone show us which industries AI will destroy?

The iPhone disrupted the compact camera market not due to its superior camera quality, but because it was already in people's pockets. A dedicated camera could capture better photos, while a GPS unit could navigate more effectively, and an iPod could serve as a superior music player. However, owning a specialized device meant purchasing it, charging it, carrying it, and remembering to bring it.

The smartphone consolidated all these functions into a device consumers already owned and used, altering the competitive landscape. Rather than asking which product performed a function best, consumers began questioning whether the specialist product was sufficiently better to justify buying and managing an additional item. For most consumers, most of the time, the answer was no. This resulted in a significant decline in camera shipments, from 108.6 million in 2010 to just 1.72 million in 2023.

While professional photography did not vanish, high-end cameras retained customers who valued the quality advantage enough to justify the extra cost and inconvenience. AI is poised to create a similar economic structure for services. Declining AI costs allow more capability to be embedded within products that consumers already utilize.

Tasks like translation, transcription, drafting, research, summaries, and data analysis are becoming incorporated features within existing software, eliminating the need for separate purchases. Consider a routine translation—customers once had to locate a translator, ensure their credibility, send documents, discuss requirements, agree on pricing, wait for delivery, and review the outcome.

With AI-enabled translation within software, two costs are eliminated: human labor expenses and service purchasing friction. The economic implications suggest that AI will first eliminate small, routine jobs, with larger businesses facing reduced demand for more complex, high-value assignments. A study by Teutloff and coauthors found that demand for freelance jobs in categories like writing and translation declined by 20-50% relative to previous trends, with the strongest decline occurring in short-term jobs lasting one to three weeks.

This phenomenon demonstrates that AI is gradually displacing ordinary transactions rather than abruptly replacing experts. The iPhone analogy is particularly relevant when AI capabilities become embedded within existing software. Google's decision to incorporate AI features into its core Workspace plans, rather than selling them separately, exemplifies this trend.

Basic functionalities like meeting summaries and transcription are now included in eligible Zoom Workplace plans, while more advanced agentic functionality is sold separately. As AI becomes cheaper and more capable, the boundary between bundled features and standalone products will continue to shift upward. While not every profession will be eliminated, the market will undergo a significant transformation.

Routine translation will be exposed before high-stakes legal translation, signaling the gradual disappearance of certain industries.