The Future of Apple, quite a big topic for my second article. However this has been on my mind since their latest quarter results were released. In case you need reminded, Apple’s 2015 Q1 revenue was $74.6 billion with $18 billion in profit. They sold 74.5 million iPhones. It averages to nine iPhones sold per second. By the time you read these two sentences they sold 27 iPhones. Quite an insane 3 months. They took the record for most profit in a single quarter from ExxonMobil the oil company. Yeah, Apple is beating oil companies at making money. I could go on but I’ll stop with this; Apple lost more money in currency fluctuations due to the strengthening dollar, than google made in profit in the previous quarter ($3.73 billion vs $2.83 billion).
Apple is Doomed. Or so I still here people say.
Heh.
It is true that they could fail, without continuing to push forward Apple will get left behind. I just believe they still are innovating and are on a good path for the next several years. iPhones will continue to sell at high amounts, and while in the US their growth has slowed, in emerging markets they are increasing at incredible rates. In China they grew 157% last quarter! They barely have tapped into China’s market yet as well, with plans to increase their store and site’s reach. So they will continue to grow their iPhone sales. Also their Mac market, while only a fraction of their iPhone sales, continues to steadily increase. the iPads haven’t been showing growth, but it isn’t shrinking. I feel the iPad has transitioned into a similar place the mac market is which will mean small growth and long update cycles. I am confident that Apple will find the ‘iPads story’ again whether that is perfecting a stylus, or an iPad Pro. The iPad may not be the iPhone, but compared to other companies it is still an incredibly well selling device.
Then there is the Apple Watch. There is a lot of Speculation over this device. Some people don’t think it will sell because its more of a fashion piece then a mobile device, others say it’s doomed because it is iPhone dependent, meaning it can’t run by itself having no GPS and limited processing power. Now it is true, if the Apple Watch was independent it could sell to more people, however almost anyone who would want to buy an Apple Watch will already own an iPhone. With the amount of iPhones they have sold, if they can sell to just a fraction of those owners, it will be a success. Also to that point I understand an independent Apple Watch has its uses. I would be able to run without carrying an iPhone, but within 5 years we will have a more independent Apple Watch, and that an overestimate I believe. The iPhone sold without apps; it will just take time for iteration to bring the Apple Watch to that level without having to worry about a two hour battery life it might have if it had GPS in the current model.
So if their current products are selling faster and faster, and their new one has impressed and sells good, or even decently at worst, what else can they do? The most popular idea to throw around is an Apple TV. I am firmly on the side that Apple is not going to make a TV. There is little worth to be gained in trying to make TVs. So many people need different size tvs to fill their different size rooms, and Apple may make two sizes but they are not going to cater to every size from 25 to 70. Now I do believe apple is working on either an improvement or replacement for the current Apple TV (box). Since iOS 7 when they added bluetooth controller support to the OS they could allow games to be played on the apple Tv. I had actually prettied that before now, we would have an app store on the Apple TV. I no longer am predicting a date on that, but I think, we will see before 2020 a big upgrade to the apple tv that makes it more of a cable cutter device then it already is. I think delays are because the TV business is harder to sign deals with than the music business (it stems from the cable companies not hurting like record labels were back in 2000 when Apple came to them). Even as I write this Re-code has a report that apple is trying to talk TV programers into a web tv service. The big unknown is if or how they would integrate a streaming service into their iTunes store where they already hold most content, but in a buy model. It’s the same sort of problem they have with iTunes Music. If they integrate Beats Music into the core part of the music experience, why sell separately anymore.
To try and look further ahead brings in a lot of unknowns. After all if anyone could truly predict what Apple’s future was, other companies would pay through the nose to find out and enter the market first, though history has proved being first isn’t everything. I believe Apple sees the importance of the cloud, and with enough tries will EVENTUALLY get cloud services stable, though this seems to be an area of trouble for them. Apple’s OS’s are still on a good path, as long as they don’t let too many bugs through to lose their reputation which is only slightly tarnished from iOS 7, 8 and Yosemite bugs. We will see the Mac line get simpler. Soon every computer will have retina screens, all that is left is Macbook air and the twenty-one inch iMac. I think the rumors are true and the Macbook air will become a twelve inch laptop, and be the only one given time (Apple loves selling old hardware cheaper), so that there will no longer be two thirteen inch computers, and will have a greater differentiation between the air and pro line.
Apple doesn’t need another ‘iPhone’, no matter how much the analysts cry. Between the Mac, iPad and iPhone, to build another product as revolutionary as an iPhone Apple would have to cannibalize one of these other products, which they aren’t afraid to do, one of their strengths, but I don’t believe we are at that point yet where any device is easily replaced by a new product. Maybe in five years we will be, but five years can make a lot of difference. Five years ago the iPhone was AT&T only, The iPhone still didn’t have multitasking, and Apple was doomed for it. Now you can buy the iPhone for almost anything, and not only do we have multitasking, we have extensibility and custom keyboards! If Apple doesn’t have feature X and you think Apple’s domed for it, have some advice. Just wait five years. ⤫
Cross Road of Interests 