Apple has an historic strategy for making hardware that gobbles up the premium segment of the product spectrum in each industry where it competes. That strategy has served the company well for decades; especially so since co-founder Steve Jobs’ second coming in 1997, and what CEO Tim Cook has done to extend the company’s wealth since Jobs died in 2011.
In every hardware product category where the company competes, Apple is the revenue and profit leader. Mac, iPhone, iPad, Beats, Watch, Apple Pay, et al. Remarkably, Apple continues to grow revenue and profits despite sales of most major hardware remaining flat for a few years.
Same old, same old.
Long term, I think Apple’s biggest threat comes from doing more of the same thing over and over again. The company’s last major product was iPad. Since then, Apple bought Beats headphones and music, launched Apple Pay and Apple Music, and seems hell bent on selling more products to the existing customer base than expanding into major new hardware products.
Yes, analysts point to Services as the company’s second largest and fastest growing revenue stream, but don’t forget that Apple is a hardware company. Without hardware sales, Apple won’t make much money with Services.
Same old, same old.
Apple is falling for the same old same old routine. iPhone sales are stagnant. More expensive, yes, but not taking marketshare away from competitors; instead, getting more money from the customer base. iPad sales are less than a few years ago. Mac sales have experienced a dramatic drop and today Microsoft’s Surface has more notebooks than Apple.
Our favorite Cupertino gadget maker seems to be in an iPhone induced funk where the only products that really matter are, well, iPhone.
A few years ago, PC magazines pointed out that the best Windows PC you could get was a Mac (running Windows). Today, most PC notebooks look like Mac notebooks. Most smartphones look like iPhones.
Apple has a history of innovative revolutions– Mac, iPod, iTunes, iPhone, iPad– but today has become a company of iterative innovations– Touch ID, Face ID, Apple Watch, AirPods; with a strong focus on accessories for iPhone vs. creating the next great thing.
Unless, of course, the last great thing was iPhone and there’s nothing else out there.
Therein lies the danger in same old, same old.
Is there hope?
I like what I see in Apple Watch– a fashionable exercise and health device that becomes a gatekeeper for iPhone access. Today’s Watch has a built-in electrocardiogram. Next? Maybe blood pressure readings. The year after? Blood oxygen detection. Then? Blood glucose monitoring.
Those innovations would be revolutionary, game-changing events that might catapult Watch into Mac, iPhone, and iPad status; so successful that Apple is willing to share quarterly sales results.
Otherwise, my fear is same old, same old Apple.