iPhones - The Decline Of Apple's Revenues And An Uncertain Future

57% of Apple's total Q3 2016 earnings was by the iPhone sales. This is followed not so closely the Services wing which accounts for 14% of the total revenue and at third you have Macs which account for 12% and iPads stand at 11%. Without the iPhone, Apple's revenue would stand around at $18.3 Billion instead of the actual $42.3 Billion.

Apple sold its Billionth iPhone and the number is of course rising. Even PCs couldn't reach this figure for more than a decade but the iPhone did it in a matter of 9 years. Technically speaking smartphone sales have always managed to outclass other fields because of a basic reason: Portability. However what I mean to discuss here today is whether Apple's continued reliance on the iPhone as the basic revenue earner a good choice? There was a decline of an eye watering 16% in Apple's overall revenue while iPhone sales went down by a hefty 23%.

It's Getting Too Simple

One of the root causes of Apple's declining revenues is lack of innovation. Jawad who happens to be an iPhone user from the 3GS era, told me that he considers the 3D Touch pointless. He currently owns the iPhone 6S and upgraded from the 6, the difference was better performance and a better camera. That is all you get for spending $700 on a flagship phone and another reason why you should wait at least a whole year before getting another one.

So basically as far well as I can remember, the last event which received actual fan hype even from the Android fans was during the launch of the iPhone 5S. The announcement of the 64-Bit Mobile Processor Chip, the Apple A7 literally gave a wake-up call to other mobile hardware manufacturers to get their game up. After that we have seen dramatic improvements in performance as well as Console quality graphics on mobile being an actual thing.

But other than that, there is nothing worthy to be mentioned here. Perhaps the iPhone 6 changing the design of their signature series ought to be given a shout out too but since then there has been nothing to be excited about.

Don't Get Excited By The iPhone 7

And it's not even the iPhone 7, the upcoming flagship will be called iPhone 6SE and iPhone 6SE Plus. Way to go Apple. We already know that there will be no major design tweaks in the upcoming iPhone as well as no news on any intriguing features as for now.

This lack of innovation and merely rebranding the same product will not bode well on Apple. Despite the fact that launch day sales will break records, year on retailing will matter more especially considering the fact that Samsung Galaxy S series is gaining more and more popularity, thanks to the S6 and S7. All those reasons stated above are slowly contributing to the cause of Apple's falling fanbase. Only the services sector has experienced growth while iPad, Macs also fell in their respective sales.

Explore Emerging Markets

Tim Cook has shown interest in virtual reality and augmented reality(thanks Pokemon GO?). There are details that Apple is coming up with products of their own but release period is a mystery. Aside that you have the Apple Car which has been rumored for sometime now but still no word on a possible release. So the possible markets which could bring Apple a good alternative revenue aside from iPhone are:
  • Apple Watch
  • Virtual Reality
  • Augmented Reality(Portable)
  • Apps
  • Corporate Products
Apple Watch has been extremely successful despite the fact that many people, like me, thought it'll not perform well considering its Square design. Don't blame us though, Apple itself admits that the Apple Watch wasn't up to their standards. They addressed the key software issues in watchOS updates and expect a dramatic change in the upcoming Apple Watch 2 too.

As far as Virtual Reality and Augmented Reality are concerned, we know that Apple has something working under the hood. Portability combined with power and affordable pricing will be the key but the last one doesn't apply for Apple's case I am afraid. Both these are very powerful ecosystems and Apple should exploit them before they reach their saturation point.

Apps require little explanations since Apple already knows their importance and in some areas they are even better than Google at this. Take for example Prisma, a very recent mobile camera app which got extremely popular first on iPhone and then made its way to Android. Pokemon GO will make Apple an expected $3 Billion in revenue.

Corporate Products will include Macs as well as something like the Microsoft PixelSense and more. Microsoft seems to be going really well with their cloud services and aiming solely for the corporate market to expand their revenues. This is something which Apple should target to offer a bit of competition to club.

So Summing up:
Innovation and Sophistication
Or in Apple's case simplification would be a better slogan but they should keep the innovation part.

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