Apple has peaked. The company has a long and storied history of upending market after market with disruptive innovation that has destroyed stale old companies and dismantled the status quo. Apple II, iMac, iPod, iTunes, iPhone. Perhaps we fan folk have focused so much on the past that we have ignored the present.
More Power, Less Money
Without wanting to be highly critical of Apple’s fame and history, the last product line disruption was the iPhone. Yes, iPad redefined the tablet market, but that product is falling out of favor faster than Zendaya. What about Watch? That’s innovative, right? Yes. And disruptive. But Watch is an accessory, not a product line that matches Mac or iPhone.
Two items caught my eye this week and both combined to tell me that perhaps peak Apple is here and, in fact, may have been here awhile. A number of TV commercials have US cellphone carriers pushing BOGO. Buy one, get one free. Two for one. That’s never a good sign. One of them, T-Mobile has a BOGO deal on the iPhone SE (half off the second).
What does that say about peak Apple?
Here’s what it tells me. The smartphone market in many developed countries is saturated and growth– either at the low end or the premium end where Apple resides– is slow going. That’s a fact. Apple’s holiday quarter of iPhone sales barely topped the year before; so, ipso facto, no growth, which can be translated as peak Apple.
The iPhone SE also tells me that Apple, no longer able to find a massive new stream of customers at the high end where the iPhone 6s and 6s Plus reside, is willing to chew into the mid-range smartphone market with a remarkably powerful new device at an unheard of price point for a new model.
With a few exceptions, the iPhone SE is an iPhone 6s in a smaller, much less expensive package and that means it’s more attractive not only to those who simply want an iPhone with a smaller screen, but a more affordable iPhone. Indeed, the iPhone SE’s price point will make it a very attractive device for those who settle on various mid-range Android smartphones simply because of the price tag.
For much of the past 15 years Apple has been a technology company with one song. Growth. Mac, Apple Stores, iPod, iTunes, iPhone, iPad have pushed the company to revenue and profit levels unheard of in the technology industry. It’s not always true that what goes up must come down, but growth doesn’t go on forever. Ever.
The signs are there. Apple is moving the iPhone line downstream to reach Android customers. The iPad’s sales have gone down for two years, and expensive iPad Pro models are not likely to provide much of a bump, though they may provide– finally– a reason to upgrade. Other than thinner and lighter the Mac itself is much the same old same old and growth has slowed. There’s a measure of promise in future growth with Watch, but the device remains an iPhone accessory, albeit with a fashionable side.
Even if Apple launched an entire Tesla-like line of electric or dust powered cars starting at $30,000 and managed to sell more than a million units in the US within three years, as Honda just did this past year, the company would struggle to match annual revenue from the Mac.
That’s peak Apple.