Apple has been on TOP of the Tech Mountain for years now and with more than 230 Billion in cash assets, they’re not closing business anytime soon. However with the recent surprising Microsoft announcements such as the Beautiful Surface Studio or Google’s final push into smartphones with their own Google Pixel phones, it’s clear that the competition isn’t getting easier anytime soon. With these companies and many others emerging everyday, is Apple in Trouble? Well from a financial and short-term perspective, absolutely NOT, but it’s the long-term that’s at stake here. Apple’s iPhone currently accounts for 60% of Apple’s revenues and recently, their marketshare has been on the decline. iPhones are by far light years ahead of any company besides Samsung when it comes to smartphone profits, but as they become more of a commodity and the quality of cheap phones coming out of places like China are improving daily, the iPhone might no longer be THE phone people think of. So how has Apple been preparing for this situation? Well they’ve been steadily working over the years to diversify their revenue streams especially with their MacBook/iPad offerings and more importantly, their services category such as the App Store/ITunes and Apple Care divisions. More and more, it seems their Services and Apple eco-system is where the money is really gonna be at in the future. If you look at companies like Google, Microsoft, Amazon and Facebook, it’s their Software Services that generate the most profits for them.
Products are definitely valuable, but their profit margins and costs are nowhere near what you can get from software. However software is extremely competitive and volatile. What was once HOT can suddenly become OLD and Foregettable…MySpace, AOL and Yahoo come to mind among countless others. But this is Apple, they surely can’t fail especially with their insane amounts of Cash? Well if you look at Apple’s past, you’ll realize that they almost went bankrupt. Apple first pioneered the Personal PC, but when Microsoft came along with their Windows Operating System, profitable software was surely where Tech was heading. And it wasn’t until Apple had blockbusters such as the iPod, iMacs and of course the iPhone, that they would come back and become the Giant that we know today. But as history has shown, things can and will change especially in the Tech industry. So how can Apple avoid repeating a failed history?
Well there are some key areas where I think Apple can remain the most valuable brand in the world. The first and most important place is Price. For the majority of users, Apple is a luxury that most can’t afford especially if you’re thinking globally. And although people will find the means to afford Apple products, their long-term brand value might be eroded as more quality competition arises with value for price. Secondly is the area of Innovation. Not since the original iPhone, would I consider Apple producing something Revolutionary. Even with the introduction of the iPad, which has seen consistent sales declines, does one think of Apple as revolutionary outside of the rabid Apple fans. Finally, Apple is more than just the iPhone. Apple historically has been a company built on creativity and innovation, but nowadays they’re a more consumer-based company making products that appeals to the masses. If Apple wants to be the brand for innovators, then they must change the perception of being the iPhone company. Overall, Technology is more expansive and crowded than it’s ever been, but a world without Apple would be less exciting especially for the Fanboys.
-Geek Outside!
