An innovator, a creator and a leader- Apple Inc., has revolutionized the modern world with its cards by betting a major bluff in 2007 by introducing the world with the new era of a mobile handset, – “iPhone.” It wouldn’t be wrong to say that from the past 10 years, it is not any other segment but iPhone that has single-handedly driven the path for Apple Inc. so as to become the leader in this sphere. But its shadow has more or less faded making everyone concerned about the next big move by the company?
The question that sets in would definitely be that would it still be worth to invest in iPhone so to monetize its popularity by continuing with its further variants or is there a need to re-engineer the tech space to blow the world with its research and development?
Commenced its operations in 1976 by introducing Apple I, then Macintosh – the first personal computer – in 1984, realized the potential of Graphic User Interface in the computer system. It went with series of acquisition in multimedia and digital sphere and finally in 2007, and tricked everyone with its ultimate ace card. Though the company has witnessed sizable growth until 2007, it was after 2007 only, the other stakeholders could able to relate themselves with this brand because of the popularity of the iPhone. iPhone for the customers has become a status symbol coupled with smart touch inclusive of the most advanced security system. In this period (that is 2007-2018), the company’s net income jumped to 59.53 billion US dollars from 1.33 billion US dollars, and interestingly iPhone’s share constitutes almost 3/4th of the total revenue segment of the company.
But the success story of Apple Inc. has started to show a declining trend in emerging nations like India, China and even in other Asian countries due to its tendency to charge a higher price for their mobile handsets. Even though they have a debatably better technology, other smart mobiles with somewhat similar features are available at a cheaper price in the market. In addition to that, the frictions that the company has faced due to the entrance of Chinese brand (like Vivo, Oppo, and Xiaomi) in the smartphone segment with cheap labels leading to a turn in the behavioral nature of the consumers towards them, have significantly resulted in the loss of trillion-dollar status of the company. Consequently, though the iPhone segment continues to constitute almost 92% of the industry profit, it has experienced the worst decline in its sales from the past 8 quarters. In addition to that, the multiple quality problems coupled with a lack of innovation in recent years have also contributed to this cause. It has enabled the company to emphasize the statement – “this saturated global smartphone market is forcing Apple to seek reinvention” – and certainly, it makes some sense and logic in this complex environment.
The question is that if not iPhone then what would be the next trillion-dollar thing for the company. Is it an iPad or Mac or iTunes or what? Undoubtedly Apple Inc. is great at reinventing itself, and by introducing Apple Watches, it has already started to replace the usage of iPhone for some. The efforts of the company to reintroduce affordable iPad Mini and then its comeback with the iPad have suggested Apple’s intention to shift from its main revenue segment. Critically, the company has the ability to capitalize on the growing market potential in the service segment including iTunes and software which currently has approximately 90% gross margin in it. So in general, it will not be wrong to say that it is these services that will shape the next decade of Apple Inc. As far as iPhone is concerned, which was once proven to be impervious to every attempt and made almost every company like Nokia, Blackberry and even Microsoft to be its victim of innovation has suffered quite a bit itself . But being a premium product with the exceptional brand value, the company can continue to unlock its potential by slightly reducing its price in the range starting from 50,000 to 60,000 and upgrading its features like Siri Assistance and iOS software. Resizing the price segment would once again give it a competitive advantage over other Premium products like Samsung S Series or Google Pixel series and many more.
But the level of scope it can generate for Apple Inc. is still uncertain as it has already reached its saturation level and from here, the only thing is certain is the fall unless some extravaganza is done. The same happened with Intex mobile handsets, which had done exceptionally well during 2007-11, but thereafter company started showing a deep decline in their revenue as their main revenue segment (i.e. mobile handset) was not as impressive as the company thought off due to lack of innovation. And finally, it is being reported in 2019 that Intex may exit handset businesses. Apple Inc., unfortunately, is experiencing a similar problem but with a slight difference that as far as the current scenario is concerned, iPhone is a bigger brand.
Lastly, the bets that these tech companies will make or not in the field of artificial intelligence, chatbox or in augmented virtual reality shall definitely shape the technology market in the next decade. And the fact that there is no shortage of rivals which are waiting to fill these gaps which these opportunities are creating certainly creates a hope for faster and efficient outcomes. And certainly, the pace with which everything is changing, betting more on iPhone technology could turn out to be a big risk taken by the company. As far as the long term perspective is concerned, the days are numbered for the iPhone. Thereby it will be interesting to see the strategy of Apple Inc. to shape its future vision and long term policies to compete with its rivals.