The article is about the iPhone and iPhone sales represent more than 50% of Apple revenue. Can you please tell me the innovations in the iPhones for the last 5 years ? If Apple decided to stop giving the iPhones unit sales, it was for a reason : iPhone sales (by units) are plateauing and the only way to increase revenue was increasing prices.
The innovation is basically the Apple ecosystem that Tim Cook has been building out ever since he took over the reins at Apple. When you buy an iPhone, you are not just buying any one product in itself. You are buying into the ability for all your apple products to play well with one another.
For example, say I currently own an iPhone, Apple Watch, iPad, MBA and iMac. I can share my iPhone app purchases with my iPad (and there are numerous apps which aren't available on Android and windows, like Tweetbot, overcast, lumafusion, fantastical, notability and 1password). My files and data all sync via iCloud (eg: reading list, photos, iCloud Keychain, safari tabs, just to name a few). I can sling files around using airdrop. I can turn my iPad into an extension of my Mac via universal control. I can call people from my iPad or Mac via continuity. And my iPhone now doubles as a webcam for my Mac. I also have Apple TVs in the house for the integration.
You either don't get the same integration with non-Apple products, or it's harder to put together. And the iPhone is the glue that holds it all together. That's the value that people tend to overlook when they insist on comparing the iPhone with other android phones in a vacuum.
I saw it coming a mile away. The iPhone is Apple's most popular product by far, more so than any other product they sell. That's why Apple sells so many iPhones at so many different price points, to grow their install base, which they can then sell additional Apple hardware, accessories, services and apps. I believe Apple even earns when you make an Apple Pay transaction.
That the iPhone makes up a smaller portion of Apple's overall earnings means that this strategy is working. It's not that they are selling fewer iPhones every year, but that Apple is succeeding in getting iPhone users to consequently spend more on other complementary Apple products. The end result is a formidable moat where engaged Apple users are far less likely to leave the ecosystem and seek out products of other brands.
This stickiness in turn allows Apple to buy time in the event of any threat arising in order to find an answer, which then brings me to my next point.
True about the time horizon, but what if Apple starts losing their dominance in the industry? Others have said it, they don’t seem to be as innovative as they once were. I see things like the Apple car being pushed back to 2026 and they still don’t have a real prototype to show, not even an artist concept. All their current products are really incremental upgrades. I usually get a new iPhone every year, but I’m not trading up my iPhone 13 mini this year. Everything else they’re making is just not compelling enough for people to plunk their money down today, with inflation as it is. I know it’s blasphemous, but Google Pixel 7 is starting to look good to me.
I am very curious to know who or what you think Apple will lose their dominance to, seeing as to how the competition doesn't seem to be doing so well themselves. It may well be that Apple just needs to sit back and watch the other companies crash and burn without needing to do anything extra themselves.