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Milking the iPhone doesn't much matter when it comes to what's next

iPhone, Apple Watch, and AirPods
iPhone, Apple Watch, and AirPods (Image credit: Rene Ritchie / iMore)

Neil Cybart provides excellent analysis of Apple and its business. Here's his recent take from Above Avalon:

For Apple to remain relevant in the future, the company will need to attack itself. Management will need to risk its own ecosystem.When it comes to catching the next big wave, an Apple Watch with cellular connectivity may end up representing the single biggest game-changing device Apple has shipped since the original iPhone. It would be that big of a deal. The reason such a product contains so much risk for Apple is that it threatens the iPhone. Why buy a brand new iPhone every year when your Apple Watch (with AirPods) are handling tasks that you used to give your iPhone? In addition, a cellular Apple Watch will more than double the device's addressable market to include all Android users.There is a possibility that Android users may embrace Apple Watch without buying an iPhone, iPad, or other Apple product. Apple would seemingly be giving away the keys to its iPhone sandcastle. However, instead of causing panic within Apple HQ, this would be done by design. Apple would be willing to risk its ecosystem in order to build a new ecosystem around wearables.Apple shouldn't get rid of its functional organizational structure. In addition, there is no evidence of Apple needing a management reshuffle. While there is clearly room for improvement in many parts of Apple's business, management's actions are very rational. Apple is taking lessons learned from the 1990s and using them to not repeat the same mistakes with the iPhone. Milk the iPhone today, and then figure out what comes next.

Mac pivoted to iPod. iPod pivoted to iPhone and iPad and Watch. Let's call them "macOS devices". They're all still doing well. "iOS devices" are also doing well. The point is not to think of them as a collection of single products but as a platform and ecosystem.

On one hand, you have some people thinking Apple is tapped out on products. iPhone was it, much as Mac was it in the early to mid-90s. See what happens without Steve? First Scully, Spindler, and Amelio, and now Tim Cook.

That's the bet some seem intent on making — that Apple was Steve Jobs and without him there's no vision and no direction. Apple is adrift. Apple is lost.

On the other hand you have people who know that when Steve recommended to the board that Tim Cook take over as CEO, he knew exactly what he was doing. And now Tim, surrounded by much of the same leadership team, also knows what he's doing. Maybe that's something we aren't considering?

No one expected iPod. When it was introduced, it was mocked for being overly simple and laughed at for being overpriced. Just wait until Sony gets into MP3 players!

That's what happens when all you look at is the numbers and the charts. I should know, I make some pretty great numbers and charts. But the problem with them is that they only show you what's known.

And with Apple, which continuously rejects the known, all that matters is what's next.

I’ve covered the personal technology beat for more than two decades at places like Gartner, Jupiter Research and Altimeter Group. I’ve also had the fun of contributing my $.02 on the topic at Computerworld, Engadget, Macworld, SlashGear and now iMore. Most recently I spent a few years at Apple as Sr. Director of Worldwide Product Marketing. On Twitter I’m an unverified @gartenberg. I still own some Apple stock.

16 Comments
  • "On the other hand you have people who know that when Steve recommended to the board that Tim Cook take over as CEO, he knew exactly what he was doing. " Right, and Steve Jobs hired Scully too. I know this author spent a cup of coffee at apple, but it's pretty clear that he is whistling past the graveyard. "And with Apple, which continuously rejects the known, all that matters is what's next." Everything that they have been putting out as 'next' anything has been luke warm at best, and definitely not going to carry the company by even the most optimistic of fan boy stretches. So you want us to believe the next big thing is the unknown but cite the referenced article as 'excellent analysis' at the beginning of the article. The article says that the known, Apple Watch with Cellular, will be the next 'ithing' to carry the company. This type of thinking, if shared by Apple, is what has slowly been chipping away at Apple. There are certain things that a watch is great for, would cellular be a good addition, yes... would it make me leave my phone at home, no freaking way.
  • Very well said.
  • "Why buy a brand new iPhone every year when your Apple Watch (with AirPods) are handling tasks that you used to give your iPhone?" Does anyone seriously think people will actually prefer using a smartwtch+airpods combo over an iPhone???
  • Not at all!
  • Maybe but not with the current state of AI assistants with Siri being notably deficient. I use my Apple watch significantly more often than my iPhone but the iPhone gets longer continuous use. Some of the things I use on the phone could work with an AI assistant but not all. The watch already handles notifications, timers, alarms, weather, GPS/location tracking and to a limited extent phone calls and messaging. So all of the phone portions of the iPhone are already ready to be eliminated but browsing the web and applications really need a screen and I use those more than the phone functions.
  • Even with connectivity, you could do so much more with a smartphone than a smartwatch. Unless you want the equivalent of a dumbphone with health tracking abilities... Sent from the iMore App
  • I would consider getting a future generation of Watch if it was enabled for Android. Design needs to be improved to look like a watch, I prefer round. Battery life needs to at least catch up with Samsung's offerings of 3-5 days. Cellular addition would be a benefit but not a deal killer. Handcuffed ecosystem would also be a downside and is very likely should Watch on android ever happen.
    The other big point would be the downside of losing Samsung Pay, at least with the current infrastructure out there, Samsung Pay works at almost any terminal in North America and would be a big loss but the phone is there to step in. Posted via the iMore App for Android
  • 3 to 5 days? On what watch? Certainly not the S2 Classic. Posted via the iMore App for Android
  • S3 Posted via the iMore App for Android
  • The Apple Watch isn't going to be enabled for Android, highly unlikely, this is the Apple ecosystem. It's also unlikely that it will be round either, Apple chose a square screen because the UI elements are much easier to display on a square screen and you can fit more on. Apple Pay isn't a problem for me but I'm in the UK, it's supported in most places here. I would definitely like to see more battery life and cellular support though
  • Apple isn't afraid to poach itself. But when that product is the magic money machine? All bets are off. Did we ever see an LTE ipod touch? And quite honestly, Apple would be foolish to do anything to threaten iphone. That said i'd buy a cellular apple watch day one and probably rely on the iphone a bit less as a result. Perhaps I'd only need an ipad at that point..or just an iphone with no sim. However, even a cellular watch will run nearly 1k. As long as you're financing some idevice (whether a watch or phone) through a carrier or them, that's all Apple cares about. The next big thing should hopefully answer all the creatives' questions about whether Apple is abandoning them. A new MacOS from the ground up? A merger of macOS and iOS? Improving iOS? This should lead to new devices. This is a niche Apple needs to get back.
  • "A merger of macOS and iOS?" This is the only thing I'm asking for the iPad, not better hardware, not MacOS, nor iOS, but hybridOS, an OS for the iPad. If Apple is going to charge a premium to use their $100+ accessories to use with a "Pro" iPad, then also give us an OS that unleashes the iPads true potential hardware wise.
  • I would at least like to see file-system support in iOS and actual Pro apps for the iPad Pro (Logic Pro, Final Cut Pro etc)
  • if the only reason for being a smaller wrist worn cellular device in place of your iphone, then ya, i agree.. An ipad + cellular is still useful as well, and i think has no impact on the iphone at all, probably because they do different things... That's the trade off,,, If Apple starts packing the same phone calls, but now at a smaller directly on the Apple watch with a carrier plan, suddenly the iPhone gets out of the picture. It won't be too bad because an Apple watch will never hold as much capacity as an iPhone, so there is still an need for it, (at least for now. so there is still a way to go with that and keep the same battery life). Unless Apple makes u use iCloud... Until these things happen, iPhone won't be going anywhere. Strange how a change of events happen... i.e u have a 128Gig iPad, but a smaller Apple watch storage).. Weather Apple will get bigger storage out for the Apple watch or maybie they may just think (everyone can just use iCloud as long as prices stay cheap) limited technology probably prevent larger storage 128Gig in the Apple watch for some time, but if Apple chooses ICloud aa an only option here for whatever reason as a foothold, i'll be interesting when u see Tim does a back-flip with large capacity iPhone/tablets
  • iCloud prices are cheap? Huh? Posted via the iMore App for Android
  • $0.99 cents isn't cheap currently ? yes it is..