Apple gets dinged because it has yet to create the next great thing after iPhone. For what it’s worth, I’m convinced iPhone is a once in a lifetime product. In a few short years Apple went from being synonymous to the Mac to being the iPhone company. Instead of a few billion Mac customers and a hundred million iPod customers, Apple has well over 1-billion iPhone and iPad customers.
What’s the next great thing? I don’t see anything coming down the pike because technology gadgets have reached a line of saturation. Everybody has a smartphone. Everybody that wants a personal computer, Mac or Windows, has one. Everybody that needs to get on the internet, or subscribe to a social media network like Facebook, is already doing just that.
Digital saturation rules.
That means there are few new markets for manufacturers to sell their gadgets so they have to sell more gadgets to the customers they have already. If they don’t, they won’t grow. If they don’t make profits, they won’t stay in business.
Apple is the perfect example of a smart company working diligently to avoid the coming technology apocalypse. Smartphone sales on an annual basis have been flat for two or three years. Apple’s iPhone sales have been mostly flat over a similar period of time. Yet, Apple makes more money than ever. The average selling price for a new iPhone is up while all the competition in the smartphone industry struggles to find a break-even point.
How does Apple manage to increase profits even while customers use iPhones longer than ever before upgrading to a new model?
With a billion customers Apple has a large pool where new products can be sold. The new iPhone Xs Max can be maxed out to almost $1,500; roughly three times the original iPhone’s retail price. Apple squeezes more money from each customer.
It’s not just iPhone, of course. Apple Watch is the sleeper hit product that nearly every critic howled at when it launched just over three years ago. Watch is not the next great thing. But Apple may sell a few million each month and that means another highly profitable, multi-billion dollar industry segment where Apple rules.
If the average selling price for an iPhone reaches about $750, what is the average sales amount (or, average annual revenue) to an average Apple customer that also buys AirPods, Watch, Beats headphones, cases and accessories, Mac, iPad, etc?
I see nothing more than a coming technology apocalypse for Apple’s customers because they lack the same customer-base sell through that Apple has and glorifies.
Think of it this way. Various studies show Apple maintains more than 80-percent of the entire smartphone industry’s profits, more than 60-percent of all revenue. Samsung gets the lion’s share of what is left. What does that say about competitors? They compete for table scraps and the future cannot look too good, financially speaking.
Apple has a billion customers and a line of products that cover much of their gadget requirements. What other competitor has such a broad line and deep customer base to help shield them from technology gadget saturation?
Apple. Samsung. Microsoft and Google? Amazon? It’s a short list. Once the customer base is fully saturated the apocalypse begins.