Why own a Mobile Phone? – the future of Apple

The Apple inc stock market valuation hitting a new all time high of 122 and record capitalization of $700 Billion suggests investors see nothing but positive growth for the poster child of the new digital economy. Apple CEO Tim Cook also thinks its unstoppable, quoting they could overcome the law of large numbers” and keep growing rapidly.

With iPhone 6 driving huge sales and in particular China’s explosive growth of 70% demand the question is what else can this product category do? The reported troubles of Samsung own mobile segments becoming too cluttered and Microsoft yet to make headway in their mobile offering, then new innovation such as China’s Vivo x5 thinnest 4.75mm to Amazon’s fire phone seem to struggle to with mixed success. The truth is that the hardware is key but not the critical factor, it’s the “platform” that drives the business model. A platform of software and controlled hardware architectures that integrate and control every aspect of the product and service. Its digital “barbed wire” that is technology protectionism that operates in its perfectly legal commercial strategy of controlling the content and delivery completely.

Music, apps, cloud storage and now music streaming with their Beat box acquisition and a new category of the iWatch, all have been based on controlled dominance of the consumer experience and high quality premium pricing and user interface design. Other platforms such as Android or the open source Ubuntu have grown but none have converted this into the massive profits that Apple have.

The issue is iPhone 6 was an uncharacteristic “mean too” strategy for Apple, emulating the Samsung phablet and size factor. But arguably beyond touch sensitive haptic feedback, Holograms and 4K screens the hardware form factor of the mobile phone is plateauing. The iWatch is a signal of new growth areas and rumours continue of a Apple TV and Home system. The Asia market will continue to grow and I prediction Apple will continue for the next decade expanding existing product lines to saturation point in these markets. But with Jobs gone and Apple product releases looking more “Same again” in innovation compared to the past, I think the stock market is just looking out for the next 1 to 5 years maximum.

Apple has huge cash mountain of reserves , $164.4 billion, a figure often cited as greater than many sovereign country own reserves, its ability to invest and drive innovation will not be limited by finance but the lack of leadership and technology miss-timing.

History lessons tell up that technology disrupts and new directions will emerge. Mobile phones may be replaced altogether with crowd models such as we see in the self-driving cars and the question of “why own a car when you can subscribe to it”? Likewise with Uber taxis and AirBnB and new Payment services, the digital game never stops. Why speak and search when machine learning and Article Intelligence attached to every day objects in the “Internet of things” may be able to do many things automatically for you ?

My view is the mobile phone could be dead in 10 years as every object and device could be a phone. Its not in the hardware anymore.

So why own a mobile phone? what experiences do wearables enable? will be the new value models that the people inside Apple will be worrying about and thinking hard how to position as the mobile phone has to content with the Internet of things shift and new services.

We don’t know as the Apple remains a notoriously secret organization, but the odds are good but the magic of Steve Jobs will be a long memory in ten years and a new generation of connected people with new ideas and new demands.

• http://www.apple.com/pr/library/2015/01/27Apple-Reports-Record-First-Quarter-Results.html

• https://uk.finance.yahoo.com/q?s=AAPL

• http://androidadvices.com/vivo-x5-max-smart-phone-all-info/

• Dr Carsten Sørensen, Associate Professor, Digital Innovation, London School Economics

• http://www.theguardian.com/technology/2014/sep/07/apple-iphone-6-cash-pile-tax-avoidance-us

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