Credit: Digital Trends
Apple’s most famous product, the iPhone, made up less than half of Apple’s total sales for the first time since 2012. Despite this, sales have risen elsewhere.
Few companies have shaped the technological landscape in quite the same way as Apple. A company that brought the world white earphones, the scroll wheel, iTunes and the smartphone as we know it, the brand was renowned for innovation and excellent marketing; a unique sense of style and substance.
The iPhone is perhaps the crowning glory of Apple. A phone and iPod combo that incorporated mobile internet, applications and an almost unending opportunity to improve and evolve, the iPhone defined a generation. Like all iconic Apple products, it wasn’t the first of its kind. It was the best though: at least for a while and at least according to its audience.
This week, it’s been revealed that sales of the device are down by $741m on this period last year. In China, sales dropped 4% to $9.16bn, after they’d already fallen 22% in the second quarter. Poor iPhone sales are thought to be the central reason Apple’s profit between April and June fell 13% from this time last year to about $10 billion.
Experts suggest competition from Chinese companies is a key explanation for the iPhone’s underperformance. Apple is offsetting the consistent decline of the iPhone however by a surge of sales in other areas of the company. Subscriptions, for example, are up 55% in the past year and expected to rise even further with the launch of Apple TV+.
Apple, as a company, is performing well. The iPhone less so. So where does Apple go from here, if its star product continues to fall?
Apple could replace the iPhone with another innovation
Others might have been there and done that before them, but Apple had a reputation for innovation. It was Apple that took the biggest, brightest tech updates to a big audience, often with an all-white makeover and catchy title.
Innovation is a snowball, though. As it gathers speed downhill, growing in expectation. The iPhone began as a revolution before slowly evolving, copying rivals with subtle features to keep in the race. In the last ten years or so, the iPhone has caught less and less imagination. Many argue that Apple is failing to feed its audience’s appetite for the new and exciting.
This leaves the Cupertino-based company at a crossroads. If Apple is to innovate again, is it time for the next revolution?
Apple is hedging its bets on Voice AI with investments in Siri, for a start. Siri was originally slow to take off but its popularity is steadily rising; in December last year, the company promoted John Giannandrea, who was Senior Vice President of Artificial Intelligence and Machine Learning Strategy, to the company’s executive team. This was followed by hiring Ian Goodfellow, a Senior Staff Research Scientist at Google, in a directorial role.
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Goodfellow’s appointment, in particular, is interesting in foretelling the direction Apple could follow in AI. Goodfellow has worked heavily with Generative Adversarial Networks (GANs), which use two networks to challenge each other and produce creative outputs. This is the technology used in deepfake videos, for example, implying that maybe Apple could be about to use AI not just for assistance but for entertainment.
This growing interest in AI makes a lot of sense to the future of the iPhone. Though Apple’s HomePod is not as popular as the smart speakers produced by Amazon and Google, Siri’s presence on the iPhone does at least mean that it’s not a wasted technology and can be implemented elsewhere, should the HomePod continue to perform badly.
The Apple Watch is continuing its slow-burning growth. Apple’s Wearables, Home and Accessories sector has grown nearly 50% in the last year, which is partly down to the success of the Watch 3. As wearable tech continues to innovate, Apple having an established foot in this door is significant.
Rumours rumble on about Apple’s role in augmented reality, too. Patents have been filed by the company for AR technology in December 2016 and January 2017 titled “Displays with Multiple Scanning Modes”, describing how a display’s circuitry could update only some parts of a display. Eye-tracking has also been mentioned in a number of patent filings, including one from May 2019 for determining ocular dominance and earlier ones determining how eye tracking could be made as close to the user’s head as possible.
Apple has also been considering how to create smart glasses that simply use an iPhone in front of a user’s eyes. This will perhaps become the first AR product from the company, should it come to fruition.
For now, Apple has other focuses
Even with augmented reality glasses patents, advanced AI is not in Apple’s short-term vision. The company is about to release a bank card. Apple Arcade launches this autumn with the next iPhone. Then there’s the small matter of 5G: could it factory reset the iPhone’s relevancy in the smartphone market?
Apple is caught between two worlds. On one front, it fights the likes of Samsung and Huawei for the title of best smartphone, smartwatch and associated app stores, streaming services and operating systems. As Voice AI and IoT grows though, the company finds itself in bigger competition with Google and Amazon.
Apple may have lost its innovation mojo forever. It may not ever bring another product to market with the same fanfare as the iPhone, the iPod or even the iPad. It may simply follow other market leaders like Google from now on. Alternatively, it could have the next consumer revolution up its sleeve: just as the first decade of the 2000s was defined by explosive growth and the second by slower development of popular products already out there, the 2020s could be a renaissance for the brand.
Does Apple have it within them to reshape the landscape in the same way they did over a decade ago? Time will tell ultimately, though recent sales prove that the business is not doing badly at all. Maybe the next big Apple revolution is around the corner.