Does Apple innovate anymore? With each reveal of a new iPhone there’s always one big question from the tech world: is that it? There’s a feeling that Apple has reached its zenith when it comes to phones. It might be the most valuable company in the world, but the speed of change in tech is unfathomably fast, and share prices can shrink.
The tech world is littered with super-hot brands that gradually faded away and in the world of phones, there’s no bigger example than Nokia. Once the number one handset maker globally, the Finnish company became a department within Microsoft before being sold on this month to iPhone maker Foxconn.
But can Apple, a company with an estimated $200 billion (around £150 billion, AU$270 billion) in the bank, ever be challenged? Here are our fanciful theories, complete with a reality check.
Fanciful theory: Fast forward a few years to an era where hardware is abandoned in favour of ‘mixed reality’, where headsets, head-mounted units or even ‘retinal displays’ allow us all to interact with computers without using phones, tablets and laptops.
That’s what Magic Leap – which is backed by both Google and Alibaba – is promising with tech that projects the illusion of a hologram into the user’s eyes, creating realistic images that fit over the physical world. If a new era of computing beckons, can Apple keep up? Some think not.
Hard truth: Apple must either think it’s a crazy idea, or be working on something similar, otherwise Magic Leap would already have been acquired by Cupertino. “It would be a threat to Apple, if Apple didn’t take these things on board,” says Richard Holway, Chairman and analyst at TechmarketView.
Fanciful theory: The future is all about connected cars. So much so, that if Apple doesn’t become a leader in it, as a company it is finished. “The connected, autonomous, self-driving electric car will be the biggest next big thing in the tech scene in terms of revenue,” says Holway, adding: “It will surpass the smartphone in terms of importance to many tech companies … the connected car market could be 10-20 times bigger than the phone market.”
Is Apple Car a thing, or is Cupertino working only on the connected gubbins and iOS for existing car manufacturers? If only the latter, Apple could regret it, and leave itself open to buffeting from a very rapidly growing market. If Apple doesn’t reinvent itself in the direction of connected cars, it could lead to some serious regrets in the future.
Hard truth: One thing is for sure – Apple is going to have a crack at the connected car. Even Tesla Motors CEO Elon Musk thinks so. What if Cupertino gets it wrong and another company, such as Tesla Motors, trumps it? Well, it could buy that company. “Apple could buy Tesla for the same price that Microsoft paid for LinkedIn, and I know which company I would prefer to own,” says Holway.
Fanciful theory: Okay, nobody mention Apple’s Ping social media experiment, the game has changed. Zuckerberg and co are firmly focused on VR via the acquisition of Oculus Rift. Apple has plans for VR according to rumours, but with the hardware and a massive platform – 1.65 billion users and counting – it’s Facebook that’s in pole position. Facebook is also expanding its Messenger platform to challenge WeChat in third-party apps and bots, and Apple’s iMessage is beginning to feel a little old hat.
“Everyone said they wouldn’t be able to get into mobile or monetise it, and now they make obscene sums of money … Facebook is the most awesome company around at the moment in terms of what they’ve achieved, but it will have to reinvent itself to continue that success,” says Holway. After all, it wasn’t long ago that we thought that Twitter and LinkedIn were the future of social media.
Hard truth: Apple will expand its iMessage platform in a similar way to how Facebook is expanding Messenger, and as we’ve mentioned there are plenty of rumours about Apple’s plans for VR.
Fanciful theory: The Internet of Things is coming, and Apple could get left behind. Cisco predicts 11.6 billion mobile devices and machine-to-machine connections by 2020, while Gartner forecasts IoT adoption to grow 50% this year alone. Will Apple dominate it?
No, but Cambridge-based UK firm ARM could. “ARM has been able to look to future trends and has reduced its dependence on producing semiconductors for smartphones to less than 50% of its patent royalty turnover,” says Holway, “and it really has moved over to the IoT, with its very tiny transmitters and semiconductors that you can embed in anything.”
Hard truth: Although ARM is perhaps one of the more serious contenders to Apple in terms of future earnings potential, all iPhones use ARM-based processors. Apple’s status as the world’s most valuable company means that an acquisition of ARM is a real possibility, and has been rumoured before.
Fanciful theory: Taiwanese company Foxconn Technology Group makes the iPhone in China as well as some of the bits that go in it. The firm wants to make all of it – upcoming OLED displays included – as shown by its acquisition of iPhone display maker Sharp Electronics earlier this year for $3.5 billion (around £2.7 billion, AU$4.7 billion).
However, as its recent acquisition of the Nokia brand from Microsoft demonstrates, the company has ambitions beyond mere assembly. If a faltering Apple iPhone brand were ever for sale, Foxconn would surely be in the running.
Hard truth: Foxconn may have just bought the ailing Nokia brand, but the idea of Apple selling its brand to anyone – even if its smartphone business collapsed and the company moved on to other areas – is far-fetched. After all, it’s not like it sold off the iPod brand; Cupertino just let it die.
Fanciful theory: Apple’s tagline is ‘Designed in California’, but everyone knows the iPhone is made in China. All electronics now come from Shenzhen, China, which just happens to be the base for Huawei, now the world’s third biggest smartphone brand behind Apple and Samsung.
Now working with Leica and issuing top-end phones at least as good as the iPhone, Huawei spent $9.2 billion (around £7.1 billion, AU$12.3 billion) on research and development last year, a cool billion more than Apple, and its smartphone sales in Europe doubled over the course of 2015.
Hard truth: “Huawei has huge backing from the Chinese state and economy, it’s a huge player, and its latest smartphones are clearly up there with the best,” says Holway. “They are extremely powerful.” However, since Apple is almost certainly thinking far beyond the slowly declining smartphone market, Huawei’s rise probably isn’t causing sleepless nights in California.