On August 2, 2018, Apple became the first publicly traded US company to hit a $1 trillion market cap. After 2 years, on August 19, 2020, Apple became the first company to hit a $2 trillion market cap. After 1.5 years, on Jan 3, 2022, Apple only became the first company to hit a $3 trillion market cap. As of today, Apple is sitting with a mindblowing market cap of $2.3 trillion. It also generated revenue of more than $394 ($394.3) billion in 2022. But while on one side Apple is hitting these milestones on the other side it’s facing many challenges. The biggest challenge for Apple is the decline in the sales of its most valuable product iPhone. Second, Apple is being sued by antitrust cases in the European Union. And then Apple is being criticized by other big companies like- Spotify, Meta, and Twitter due to its policies.
Now the question is why is the world’s most innovative company’s iconic product “iPhone” not revolutionary now? Where has all the innovation gone after Steve Jobs? And in the world of collaboration, how is Apple going to sustain after the rivalry with other big corporations? Many people are comparing Apple with Nokia, is Apple really going on the same route? Is the downfall of Apple started? Or if Tim Cook has any plans to handle this crisis? In this article, we’ll talk about the story of Apple and the iPhone business while answering all these questions and most importantly the future plans of Apple. So stick around.
iPhone Beginning
The story starts in 2007 when the world was tired of using the same keypad and small screen phones by Nokia, Motorola & Blackberry, then Steve Jobs announced Apple’s revolutionary product the “iPhone”. He also announced that Apple is shifting its focus from Computers to Consumer Electronics. He renamed Apple Computers Inc. to Apple Inc. The world went crazy over the iPhone due to its high-resolution display and touchscreen features. And the iPhone became a hit. Apple sold 270,000 iPhone units within the first 30 hours. Then in the next year 2008, Apple came up with iPhone 3G with additional features for push email and turn-by-turn navigation along with the App Store to sell third-party applications.
iPhone Revolution
Then in 2010, Apple came up with another successful revolution with the thinnest smartphone in the world at the time. And launched the “iPhone 4” with a high-resolution retina display and front camera that gave us the selfie revolution. And iPhone also introduced Facetime Video chat. IPhone 4 got 600K pre-orders within the first 24 hours. Apple sold 1.7 million iPhone 4 models within the first 3 days of availability. And with the launch of the iPhone 4, the markets of Nokia, Motorola, and blackberry were finished. These companies were almost shut down. After all these iPhone successes, Apple didn’t stop. Then in 2011, Apple launched iCloud with iPhone 4S, which helped users to sync their emails, contacts, calendars, photos, and files to the cloud and navigate between apple devices as well.
Then in 2012, iPhone 5 was launched and iPhone broke its own records. IPhone received over 2 million pre-orders within 24 hours. The iPhone 5 was thinner & lighter with an aluminum body and had a fingerprint and fully functional features of Siri. iPhone 5 was also the first iPhone developed under Tim Cook. And the last to be overseen by Steve Jobs. Then in 2014, came the most successful iPhone with a faster processor, upgraded camera, better battery life, and large display. IPhone 6 received more than 4 million pre-orders within 24 hours. As of today, more than 224 million iPhone 6 units are sold. And it’s in the top 3 of the highest-selling mobile phones behind the Nokia 1100 and 1110.
iPhone Decline
2015 was the ceiling for iPhone and after this innovation was almost lost with iPhone. All the subsequent iPhones have almost negligible changes in camera, display, and battery. With tech becoming more available many new phone companies have emerged and come with the same features of fingerprint, face recognition, better camera quality, and battery life. In fact, Android has evolved so much in the last few years with better battery life and many apps available on its play store. Google Assistant is also competing with Siri. The recent iPhone 14 hit the record but on the other side. Apple has to cut production due to much less demand from Suppliers.
Although in the last few years the revenue from the iPhone has increased, it’s due to the increased price of the iPhone despite fewer sales. In 2015 the highest model of the iPhone was $949 and today it is $1599. So now Apple knows that it won’t be able to raise more prices, otherwise it’ll lose its existing user base. If Apple decreases the price it either has to compromise with quality or the profits will decline. So now the question comes: what’s next?
Entry into new domains
Apple appeared as a top tech company of 2015 in the list of Fortune 500 companies. Now after hitting its top, Apple knew that the world was going with technological advancements and they wouldn’t be able to compete with one product in their hands. So Apple started capturing new users with its multiple product ranges. In Jan 2017, Tim Cook announced that it’ll double its software services revenue by 2020. Apple changed its focus from a phone company to becoming a tech company with multiple consumer electronics products and software services.
Apple’s software services revenue has grown from $24.1 billion in 2016 to $78 billion in 2022. Not only in software services, but Apple has also continuously increased its revenue from Macbook, iPad, iPod, Apple TV & Apple Pay. In fact, the Apple Watch that was launched in 2015 has captured more than 50% of the market share. The total revenue of wearable accessories has grown from $9.8 billion in 2015 to $41.1 billion in 2022. You see, Apple has created an ecosystem with all its products. If you are using an iPhone, you will use iCloud, AppStore, Apple Music, and AirPods, and then due to better connectivity and sync, you will buy Macbook and then wear Apple Watch to pair with your iPhone. Due to the same connectivity and better sync you might set up Apple Home as well. And pair it with Home Pod, Apple TV, and other smart home accessories like lights, cameras, and locks. Once you enter this ecosystem, it’s hard to break.
Future Plans
Now you will ask that Apple has captured and in fact, dominated the consumer electronics market, especially in the US and it will become saturated in the next few years, so is it done now? Is nothing new for Apple? Well, A big No. In fact, it’s just the beginning of another era for Apple. As Apple is already working on products for the next decade both in consumer electronics and software services.
Hardware
- I am sure many of you have heard about Apple Glasses that will synchronize with your iPhone and will bring information from your phone’s messages, emails, games & maps to your face. These smart glasses will also have adjustments for people with poor eyesight, so you don’t need separate glasses with numbers.
- Apple is also working on its AR/VR headsets that will offer body tracking and incorporate real-world environments in a virtual space. It might include the on-air virtual keyboard as well.
- To provide these AR/VR features, Apple needs more powerful and advanced chips, so it’s working on the M2 chip as well.
- Apple is also working on Apple Ring and Apple Pencil to support the hand and body moments with headsets and glasses.
- Apart from this, Apple is also working on a foldable iPhone and introducing a home pod with the screen as a mini TV.
- Apple is also working on Apple Car which will be a fully featured self-driving EV
Software
- Building a new Operating System which will be more efficient to support AR/VR and gaming apps.
- It is also working on building a new App Store and new applications for the users of its AR/VR headset and glasses.
- Apple is also working on Iris ID recognition for its AR/VR headsets, instead of fingerprint and face recognition. If you don’t know, Iris ID recognition is a much faster-automated method of biometric identification that uses mathematical pattern-recognition techniques on video images of the irises of our eyes.
- Apart from this, Apple recently launched more advanced end-to-end encryption for data protection on iCloud in the US and is working on launching it to the rest of the world in early 2023.
- Apple is also working on Gaming apps. If you don’t know, Apple has the third highest gaming revenue and it’s behind Sony and Tencent only. Apple has already beaten big players like Microsoft, Google, and Nintendo in gaming.
Healthcare
Apart from all these hardware and software solutions, Apple is becoming more & more involved in the US healthcare system. With all the health-related data Apple has been archiving from its apps over the years, Apple is not only helping users but can provide healthcare providers insights about users’ habits and health-related data over the years. This will help to transform complete healthcare where healthcare providers can remotely monitor the patients and do the testing with apps and also provide personalized healthcare solutions.
Financial Services
Apple is also working on expanding in financial services. It is developing its own payment processing technology, risk assessment for lending, fraud analysis, credit checks, and additional customer-service functions such as the handling of disputes. Apple is also working on its Buy Now Pay Later feature which will be integrated with existing Apple Pay.
So after all these points, we can see that though iPhone sales are declining in the last few years, Apple is building a solid foundation and an entire ecosystem for its user base. And also working on bringing the technological revolution to many other domains. Well, That’s about the Apple business. Let me know what you think about it in the comments below.