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Apple has always been a changing business. Although she never really invented categories of products, she always seemed to make these categories of products more efficient and smarter. It also allowed us to want them, even when they were more expensive. Today, the WSJ reports, Apple is trying to make its way to a future without the iPhone being at the center of its revenue model.
This change comes as Apple has seen a drop in its revenue for the first time in years, in a context marked by the growing demand for the iPhone. The Chinese market is changing, but the fact that people simply take longer to refresh their phone is part of the problem. As the price of iPhones rises to more than $ 1,000, sales have decreased.
With iPhone sales down 15%, it was not a typical Apple earnings report, but it was something the company had expected when it announced lower forecasts for the first quarter at the beginning of the year. If the history of the Wall Street Journal is accurate, Apple is already trying to take steps to move the company to the next stage, probably as a service company.
If so, it would be a radical break with the company's history of redesigning various types of computer equipment, contrary to popular design trends. In the 1970s and 1980s, when he called Apple Computer, Steve Jobs and Steve Wozniak were making computers with a graphical interface while most people were working from the DOS prompt.
In the early 2000s, Apple released an MP3 player called iPod and opened a music store called iTunes. In 2006, the year before the introduction of the iPhone, Apple had sold more than 42 million units and 850 million songs. It is a combination of equipment and services that has transformed a flagship company into a power plant.
In 2007, when Apple launched the iPhone, he knew that it would start to lose sales to an iPod, and it finally happened, but it does not matter because it was the next logical step . When introduced on the App Store in 2008, the iPhone has become more than a standalone piece of hardware. It was a new kind of IT service model that would generate incredible wealth for the company.
The iPad arrived in 2009 and the Apple Watch five years later, in 2014. Although everyone has done relatively well, nothing has affected the success of the iPhone. Do not forget that analysts have estimated that Apple had sold 71 million iPhones in the last quarter, which corresponds to a quarter in which the turnover has declined. It is difficult to sell 71 million units over a three-month period and to be behind.
What comes next is probably a combination of entertainment / content and the use of advanced technologies such as RA / VR, driverless cars and artificial intelligence. We do not know what direction Apple will take in these areas, but we know that recent recruitments and acquisitions are moving in this direction.
It has long been speculated that Apple could make a spectacular acquisition in the field of content. When Eddie Cue, Apple's senior vice president of software and Internet services, was interviewed by Dylan, CNN's buyer at South by Southwest, buyers specifically asked Cue to buy a property like Netflix or Disney . He hinted that it was about taking the Apple TV and combining it with a large content production company.
Cue said the two companies were excellent partners for Apple TV, but he was not ready to embark on this path. "In general, in the history of Apple, we have not made huge acquisitions." He then explained, from Apple's point of view, that he wanted to know where the future was and build something to get there, rather than buying something. it works for the current situation.
It is interesting to note that the Apple TV did not match the huge success of its other devices, but that the revenue from the services grew steadily. In the latest earnings report, Apple reported service revenue of $ 10.9 billion, up 19% year-over-year. It's still a small percentage of the total $ 84.3 billion the company reported for the quarter, but it's growing.
Anyway, no one can know if Apple can tackle the success of any product it has had with the iPhone. But she knows that despite her vast wealth, it is dangerous for any business to build on past successes. So he looks to the future and recruits new blood and looks for a future with less dependence on the iPhone because he knows, as the Grateful Dead sang, "You can not go back and you can not stay motionless. If thunder does not succeed, then it will be lightning. Apple hopes to avoid this fate, and it may be a new combination of hardware, content and services that could pave the way.
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