Apple is pulling away from an increasingly outclassed competition

Apple is in a league of its own and the so-called competition is fading into the dust in Apple’s rearview mirror.

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Neil Cybart for Above Avalon:

There is no other company in the same league as Apple when it comes to maintaining and updating such a wide and comprehensive ecosystem of devices and services. The pace of Apple’s new product unveilings has played a role in the company pulling away from the competition.

The following new user estimates are obtained by combining Apple management commentary with my own product unit sales assumptions:

• iPhone new users: 60 million per year (a five-year high)
• Apple Watch new users: 30 million per year (an all-time high)
• iPad new users: 30 million per year (an eight-year high)
• Mac new users: 15 million per year (an all-time high)

We are at the point when tough questions have to be asked about Apple’s competition, or lack thereof. What company can realistically give Apple a run for its money? The number of paid subscriptions across Apple’s platform is increasing by 170 million per year…

Apple is selling both the all-around best smartphone in the market and tools and services designed to live both below and above the smartphone. Android switching rates are increasing while Apple entices hundreds of millions of iPhone-only users to move deeper into the ecosystem.

MacDailyNews Take: Apple’s only real competition is with itself. As long as the drive remains to outod itself, Apple has no real competition.

If you don’t cannibalize yourself, someone else will. — Steve Jobs

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  1. To his list (IBM and Xerox), I’d add Kodak, Sony and Microsoft.

    Any other contenders you can think of? Technology giants who failed to keep creating the type of products that made them giants in the first place??

  2. As cynical as I am about modern Apple, those numbers are compelling, particularly with the Mac given all of the new Windows hullabaloo. I hope they can maintain a shred of integrity in their success. So far that does not appear to be the case.

  3. Apple builds on success. It’s NOT something Apple did well in the early days. But building on past successes seems to be a guiding principle since Steve Jobs returned to Apple. Apple does this by intentionally NOT copying the competitions’ successes (for its key product lines).

    Microsoft Zune is an early example. iPod and iTunes became hugely popular together. By the time MS copied with Zune, Apple had the iTunes Music Store in place; it was the defacto online music download store for Mac and Windows users. iPod started off be being a great music player with iTunes to sync customer’s existing song collection. Later, iTunes Store built on that success to become world’s largest music retailer. Zune (from day one) needed to be a great music player AND have its own “iTunes” with music store. It failed, no matter how much effort and money MS poured into it, because Apple’s existing advantage was too great.

    iPhone succeeded (in large part) because it was initially sold as the best iPod ever (with built-in cell phone). Apple had a HUGE installed base of iTunes on all Macs and most Windows PCs, with happy iPod owners. For the first few years of iPhone, iTunes was required to sync and update iPhone, just like iPod. iTunes allowed Apple to take control of the customer’s mobile phone experience away from the wireless carriers and make it vastly better. A great start for iPhone that others could not match.

    Apple Watch and AirPods (and AR glasses) build on the success of Apple’s ecosystem. Apple intentionally limits the potential market (excludes Android users) to increase overall success of ecosystem. This strategy is why the fragmented competition is not competitive. It’s a strategy that only Apple can effectively implement because Apple is selling the ecosystem, not separate products.

    1. Interesting post, some good points.
      I was a fan of Microsoft Zune’s final model. It was arguably the best MP3 device on the market. The software side still lacked but definitely less so than Zune 1 (they had a music subscription service first). But Microsoft’s attempt at being cool was just sad (you could “squirt” people from Zune to Zune — not kidding that is real). But Microsoft was finally getting a top product in a shrinking market. It would be a big money loser. Once again Microsoft would miss the boat with the modern smartphone. Microsoft eventually had a very good smartphone offering. But again too late and too delayed to get it right (Project Pink is a good read). These are not the only examples of Microsoft having the direction of tech at their fingers, even first, but not seeing what they had, then bungling the eventual roll out. A very serious amount of billions lost due simply to bad initial decisions. Microsoft was fortunate that Windows was an unassailable cash cow stream. Their missteps (that could have easily been huge successes) would have financially sunk other companies. To be fair, Microsoft would hit a huge homerun with X box — seeing that software was the key to success in that market (a lesson they knew from the 90s).

  4. This article is, largely, spot on. And in not insignificant part it is due to Apple’s semiconductor business. Apple is the only one who is building their own chips/SOCs to precisely suit their user experience vision/software for the individual device and for an ecosystem of devices. OTOH the competition is forced to use off the shelf chips/SOCs. Using off the shelf requires you to alter the user experience to suit the chip/SOC, you have to paint by numbers to some extent. There’s no way around it. Apple’s many years in working on their own chips/SOCs, spending mega amounts of money, tech and human time/capital, is currently just not repeatable. The scope of repeating it is too vast. It was funny watching media fall over themselves regarding Google’s custom silicon, “just like Apple Silicon”. The tech media clown themselves when they try to sell clickbait Apple vs (fill in the blank) without telling the actually story. They unwittingly set Apple up to be unable to fail.

    Apple’s other significant part is their ability so far to keep the product offering narrow. This is a legacy of Steve Jobs that Tim Cook has made/continues to make doctrine at Apple. Make a narrow scope of products, do them very well, focus the culture and human capital and engineering silos org chart on that narrow product vision. Give the user experience team the biggest say in product execution. There just is no company is even remotely close to this. The advantage Apple has is a country mile.
    The day we start seeing the Apple toaster, the Apple desk lamp, the low end 99$ computing device? This will be the day that Apple has completely separated from the legacy of Steve Jobs (and to large extent Tim Cook). Fortunately that day is still a long ways away. It is the next CEO after Tim Cook that will significantly determine if that day is just several years away or too far out to even see.

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