Apple launched three iPhones and a new smartwatch this year (link) and announced two things to the world –
- Smartphones are now a mature market
- Next big thing in tech is portable healthcare
For people who are unaware of the BCG Matrix, it is a graph between relative market share vs market growth. Any product will lie in either of the four quadrants for a company – Star, Question Mark, Cow or Dog.
Thus, the four quadrants can be defined as follows –
Star – High Market Growth, High Market Share
Question Mark – High Market Growth, Low Market Share
Cow – Low Market Growth, High Market Share
Dog – Low Market Growth, Low Market Share
The philosophy is that you focus on the Star, milk the cow, research on the question mark and ditch the dog.
Smartphones – the cow
Our trusty devices have changed spectacularly in the past 10 years. From the screen size of less than 3 inches in the feature phones pre-2007 to the giant 6.5 inches phone launched by Apple this year, the phones have grown in size and capabilities. Once, they were a communication device; now, communication might be its least used feature.
These devices have now capabilities to start businesses and some people can live all their lives on the phone. A friend of mine even does her artwork on her Galaxy Note.
And the cameras. Smartphones have destroyed the camera market and reformed the photography segment in a new way. Now, the aim of the photographs is not just to create memories. Now, photographs are a way to immediately share your life with others. Now, photographs are a way to share thoughts, ideas, and lives in real-time.
Mind you, these features didn’t get added on day one. They have been improved and iterated upon every day. However, with each passing generation of phones, the number of crazy new upgrades have reduced and stability is being achieved. The same stability that was seen in the PC generation has reached the smartphone generation as well.
Now, the new laptop will have a new processor, more RAM and storage and that’s it. There might be an improved display but nothing revolutionary. The touchscreen was the last big change and since then, laptops have become stable.
But, we have known this for a while. What new did Apple do to indicate this?
Two things –
Increased focus on longevity of the phones
The new iOS 12 has given a new breath to the oldest of iPhones and iPads. It will probably increase the life of these new phones even further. The hardware improvements are being replaced by software improvements in other areas like cameras. This would mean that a lot of these changes would flow in the previous generations as well.
Apple knows that no one who has an iPhone X would upgrade to this year’s phone. Apple also knows that probably even the people on iPhone 7S would be comfortable with their new phones. Heck! Apple is practically ensuring that through iOS 12.
Increase in price of an iPhone
It has not gone unnoticed by anyone that the price of iPhones has been increasing and this year, Apple has increased the price substantially, enough to shift many people from one year cycle to a two or even three year cycle. People who change their phones even less frequently would be comfortable knowing that they are not missing out on any life-changing features.
Make no mistake – the market is not dead. The market is simply stable now. And with these two changes, Apple has accepted that smartphone market is now a cow.
The New Star
The conversion of smartphone market to a cow means that the hunt for a new star is on. There are a few possible choices or rather, question marks –
- Driverless car
- Voice Assistants
However, the one which Apple believes will be the next star is Health.
Apple Watch this year is a truly remarkable leap. It can measure a person’s ECG. There are more than 10 things that a medical grade ECG can measure as compared to Apple’s puny one thing. This means that Apple has immense scope for feature growth.
However, the key reason for Health being the future is that humans as a whole are getting old (link). Almost every developed country is aging and the two biggest developing nations – China and India – are also on the cusp where they will start aging rapidly. This means that over time, health costs would rise for every country.
Any cost rise creates an opportunity and Apple is focusing on this opportunity for the future. While other smartphone companies are making the biggest and best smartphone to compete with Apple, Apple is building products that strengthen the ecosystem through the next big thing – health.
This year, the conversation I hear around me isn’t about buying a new iPhone. It is about gifting the Apple Watch to parents. The world is getting old and Apple is already setting up for it. Let’s see if the other companies catch the drift.