Apple, the tech giant known for innovation and delivering stellar products, finds itself down in the dumps as the company did not just face one but two-quarters of declining iPhone sales. The stock price of the company has, however, went in the opposite direction, outperforming Apple’s own expectation. The traders definitely understand that Apple is currently faced with a phenomenon of smartphone saturation.
This could be easily understood by looking at the Pokémon Go phenomenon that has gripped the world currently. The wide-ranging availability of smartphone whether Android or iOS doesn’t come off as a surprise anymore. Presently, it’s neither weird nor surprising to look at kids walking around in parks and streets on Pokémon hunts bearing their own smartphones. The game could never have reached the heights that it reached if it was released in a year when smartphones were a valuable asset.
Not a long time ago, smartphones were the primary target of muggings. However, things have changed since then. True, phones are still one of the most personal and valuable assets belonging to people. However, it is safe to say that they have lost their value and become mere commodities, like a pair of clothes and evidently, iPhone has not remained immune to this situation anymore.
This is also true that Apple would be questioned about its growth strategies as investors definitely require incentives and every public company offers their vision of profit growths. However, such growth directives will no longer be focused on the iPhone. This entire saturation can be attributed to the finite human population of which only a fraction of the population earns enough money to buy Apple’s premium smartphone. This saturation point in the sales was inevitable and Apple’s sales were bound to hit the ceiling one day or the other. The unfortunate part for Apple, however, is that as time progresses, the ceiling is coming down as new smartphone companies step in to provide devices which are more than capable of performing tasks and running games. If we keep Pokémon Go as a reference, the game might drive the buying of portable batteries, however, it won’t result in smartphone upgrades, as existing smartphones are more than capable of running the game. Speculations have suggested that nothing short of a full-fledged VR application will stimulate growth in the smartphone industry.
Apple’s future is uncertain at the moment, as it was completely understandable to keep iPhone as the centerpiece for revenue generation (60% of Apple’s revenue was generated through iPhone) when it was the most sought-after gadget. However, as times have changed, Apple’s need for devising the next profit driver is more pressing.