Apple finds itself in uncharted territory

“The more I have reflected on what is happening right now in the consumer technology industry, in particular Apple’s position, the more a key observation hits me. Apple is in uncharted territory,” Ben Bajarin writes for Tech.pinions. ” I don’t mean because sales of iPhones are slowing or because their stock has a more skeptical sentiment around it than in years past. What I mean is Apple has never had a product like the iPhone that has reached such enormous scale, thus increasing their customer base to levels few thought Apple would ever reach.”

“Apple certainly had a mass market hit before the iPhone in the iPod. However, the iPod’s best year of sales was 2008 with 54.83 million units sold. The iPod helped Apple’s core customer base reach somewhere between 125-175 million users,” Bajarin writes. “The iPhone has taken the company to an entirely different level. Last year, Apple sold 231 million iPhones. The iPhone is the greatest hit Apple has ever had and their customer base grew from under 200 million users to now over 600 million. Apple has never had this many customers before. More importantly, they have never had this diverse a customer set.”

“During their main growth period, Apple had been operating under a cycle of rather consistent upgrade patterns for iPhones. Depending on the specific country, the upgrade rate varied between 19 and 24 months. However, as Apple began to attract new customers, particularly those on the later end of the technology adoption spectrum, something interesting happened,” Bajarin writes. “There are significant portions of Apple’s installed base who do not behave like most other iPhone owners and this could prove quite challenging. Particularly as Apple looks to drive replacement rates within their installed base.”

Much more in the full article – highly recommendedhere.

MacDailyNews Take: Ben is right, as usual, that with Apple and the iPhone+iOS ecosystem, “tech history is being made, not repeated.”

Eventually, most Apple “analysts” will come to realize that unit sales aren’t the be-all and end-all.

Apple now makes more money from services than by selling Macs – May 2, 2016
Apple services now reach 124 million U.S. adults as user base expands – April 21, 2016
Apple’s services business saw massive 60% profit margins in 2015, more growth expected – April 20, 2016
75 percent of teens say their next phone will be an iPhone – April 13, 2016
Credit Suisse: Apple’s underappreciated services business could be growth engine – April 4, 2016
Apple highlights services in search of Wall Street’s love – January 26, 2016
Apple reaps $18.4 billion quarterly profit, the largest ever recorded by a single public corporation – January 26, 2016
Apple beats on earnings; sets all-time records for revenue, net income, and EPS – January 26, 2016


  1. Apple needs to invent something magical and revolutionary. It’s not very hard.

    They can invent a surfboard for a dog that has built in cameras like a self-cam but also with a go-pro. Built in Cell phone would allow you to FaceTime your dog to watch live streams of him surfing.

    Or they could make a self-driving car for animals. That way your cat could take itself to get groomed or buy it’self food.

    Apple is short on innovation but big on talent. They could easily make something like that. Animals are a huge untapped market- unlimited upside.

    1. If only Apple could learn from Google and Amazon and invent a bunch of GEE WHIZ products that do something ‘different’, but not very well and with sales that only break even with investment and manufacturing costs. Then AAPL would be FLYING!

      😀 🏆😆👍😃📈😜

      1. @DC

        This. Whenever I look at AMZN vs AAPL, I am reminded of that old saw “the market can stay irrational longer than you can stay solvent”. Amazon is a fine company, but its valuation is ridiculous. A company that’s been public for about 20 years trading at about 550 times earnings?? And this is based on hugely competitive industries like cloud computing infrastructure, while AAPL, which has tremendous upside for service-based revenue, trades at a WORSE multiple than most utility companies. Take the long view, people. If you can stay solvent…

        1. I am reminded of the ancient adage:
          Short-term thinking, long-term disaster. I’ll stick with long-term. Scouring around for instant profit to the detriment of the future makes zero sense or cents to me.

  2. Smartphones are the fastest adapted device in history. Combining phone, computer, camera, music player, gaming device, and TV into a device that fits into your pocket is astounding. Each of these was a big purchase 15 years ago. Most people in the world did not have all six of them, a large portion had none of them. Every one of those industries is completely different today. Smartphones are tools and toys at the same time. Apple, and the rest of the world is in new territory.

  3. Taking out a subsidised phone contract was always an expensive way to buy a phone. Better financing options have been available for a few years now which mean you can own the phone outright in a year or two. The first iphone sold in Australia was the 3G. I bought it on a plan where I owned it outright and unlocked after 12 months. I replaced it only when the 6 came out 2 years ago. I bought the 6 outright also and won’t replace it until it can’t run a version of iOS that does something I feel I must have.

    These are expensive devices, made much more so if you upgrade every year.

    1. This doesn’t get brought up enough, but this has to be another contributing factor to the slowdown. With the old subsidized plans, you were crazy if you didn’t get a new phone every two years. You were paying for it either way. Now that they’ve separated the cost of the phone from the service payment, a “new every two” pattern doesn’t make any sense if your old phone still works fine. I’m holding on to my 5S until it doesn’t do something I want it to, or I drop it in the toilet. I’ll probably keep it until it no longer runs the latest OS.

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