- The Steve Jobs legacy is alive and well
- Tech Titans vs City Sates: introducing a new investment series starting tomorrow
So surprise, surprise, the iPhone 7, revealed this week, has failed to set the Thames alight.
There were no truly great innovations on display. No bendable screens, no scope for augmented reality. In fact, Apple has probably made way for a surge in sales of its lower margin iPhone 6.
With competitors such Samsung, which has had a problem with exploding batteries, and Huawei also struggling with their latest offerings, there is considerable talk about ‘peak smartphone’, and even more dismal analysis about the outlook for Apple.
Is Apple in crisis?
My take: Absolutely not.
As Steve Jobs never ceased to emphasise: Apple is ‘a product company’ and this it will definitely remain.
Indeed I believe that Apple will recover some of its popularity with coming advances in display only devices <the jettisoning of the audio jack in the iPhone 7 is a hint of the shape of things to come>, wearables (such as the Apple watch) and cars (Project Titan is imminent).
These products have the scope to allow Apple to cause serious disruption in healthcare and automotives, for a start.
Apple probably loses out to Amazon, Google, Samsung and LG in the smart home, but this is not to say it still won’t clock up a decent revenue stream from it.
Meanwhile, it can’t be emphasised enough that Apple is NOT morphing into a software services company as some leading commentators insist.
Instead, whether the market approves or not, it sees its $20 billion plus IoS apps and content business, which is growing at 20% a year, as the way to enhance the value of its iOS ecosystem and in the process, most important of all, improving its hardware by making it ever more personal, attractive, engaging and hassle free.
This will make them competitive with offerings from Samsung and Huawei and indeed, by 2020, with the likes of Ford and Tencent.
That’s the Jobs legacy and it’s alive and kicking.
Apple now has over a billion active hardware devices, with 950 million iOS devices out there, and an installed user base of 750 million.
There is hugely customer loyalty in that user base. I was intrigued to see that a recent poll by Technalysis Research among American car owners found that 12% of them would definitely be highly interested in an Apple Car .
- Apple is clearly gearing up to enter the car market — an addressable market of $1.6 trillion by 2020.
- Apple sports the world’s highest brand value by far — $150bn-$170bn, according to which brand analyst you choose vs $80bn-$90 bn for runner up Google and less than $60bn for the premium brand star of yesteryear CocaCola.
- And yet Apple is rated like a clapped out steel company in the market.
It may well tread water until new products work through, and indeed until iPhone and smartphones in general are made extinct by a Cambrian explosion of digital devices.
But by 2020 the next Apple is highly likely to be…Apple.
After the Flood: How to profit from the coming Information Wars
That’s it for today, but look out tomorrow for the first in a series of articles that we at Signum have prepared about investing in technology for the five and ten years ahead.
This is the culmination of our recent research into an industrial transition that is underway — investigating platform companies who are exploiting vast user bases, computing power and machine learning algorithms to invade new industries, including healthcare, automotive, finance, agriculture and cybersecurity.
I want to argue the key to finding excellent investments and negotiating the wild industrial weather is to focus on technologies that produce useful, actionable data.
I also think it’s vital that fund managers start investing in an emerging network of advanced City States that now threaten their dominance.
I’ll send the first in this series over to you in the morning.
PS: If you would like to discuss how I can work with you and/or your company please get in touch here.