When the late Steve Jobs unveiled the iPhone in 2007 he led by saying, “Every once in a while, a revolutionary product comes along that changes everything.” And so it did.
For Apple, the iPhone’s inception marked a turning point for both its business and the mobile phone industry as we know it. Describing the device as an iPod combined with a phone and an “internet communicator,” Jobs stood on stage explaining how users would be able to access their music, make phone calls, send text messages and surf the web all on one pocket-sized device.
READ MORE: Apple turns 40 – Moments that defined Silicon Valley’s golden apple
It was, by no means, the first smartphone on the market. Brands including BlackBerry, Nokia and Motorola were already competing to provide the most high-tech internet-connected phone. In fact, competitors dismissed the iPhone as nothing more than a niche product at first. Mike Lazaridis, BlackBerry’s CEO at the time, said Apple’s “design-centric approach” would limit its appeal, especially to business customers.
A year later, Apple announced the addition of the App store, a feature other smartphone makers were lacking, increasing its competitiveness. The second iteration of the phone gained 3G connectivity; the third, iPhone 3GS, earned a camera capable of recording video. By the time the redesigned glass and steel bodied iPhone 4 was released, people were willing to line up outside Apple retail stores overnight to get their hands on one.
Over the last 10 years, the iPhone has become Apple’s flagship device, representing its most purchased product and making up a large portion of its revenue.
READ MORE: Is Apple guilty of using ‘planned obsolescence’ to force iPhone users into upgrading?
To date, Apple has sold over $650 billion worth of iPhones and has sold over one billion units. According to CNBC, over half of those iPhones were sold in the past three years.
However, in 2016 Apple recorded its first-ever decline in iPhone sales and its first revenue drop in over 15 years. Analysts were quick to point out a highly competitive smartphone market, driven by increasing sales of Android devices, and Apple’s high price point might be to blame for the iPhone’s lacklustre results.
But many have also pointed the finger at Apple CEO Tim Cook’s teams for failing to come up with more innovative and ahead-of-the-curve features for the device.
“It doesn’t look like there is anything that would drive significant growth for Apple from here as they’ve been behaving,” Forrester analyst Frank Gillett told Reuters in April.
“If they came out with a breakthrough product or price, then you might see a change, particularly if it’s different than the other smartphone makers in this market.”
READ MORE: What an iPhone with no headphone jack means for consumers
In September, Apple unveiled the iPhone 7 and 7 Plus, both of which feature waterproof bodies and ditch the traditional headphone jack in favour of Bluetooth connectivity. While the physical changes to the phone may have seemed big to some fans, many pointed out Android products already had the same capabilities.
In other words, some are worried Apple is falling behind.
“The technology edge Apple had in 2007 has vanished and that’s why sales aren’t continuing to grow,” said Srinivasan Keshav, professor of computer science at the University of Waterloo.
“The smartphone market has become quite mature. Companies that weren’t even present 10 years ago are now significant players.”
So, what does Apple need to do over the next 10 years to stay competitive in the smartphone market?
While smartphone technology will change drastically over the next decade, Neil Bearse, marketing expert at Queen’s School of Business, said Apple should focus on developing its artificial intelligence (AI) capabilities over the next few years.
Artificial intelligence and virtual assistant devices, like Amazon Alexa, were the biggest trend at this month’s Consumer Electronics Show (CES) in Las Vegas. Facebook, Google, Amazon and Apple are all said to be developing more internet-connected smart devices, aimed at tackling everyday tasks for consumers.
READ MORE: Google plans to compete with Amazon Echo with new ‘Home’ device
However, Bearse pointed out that Apple could sell itself short in this department thanks to its investment in user privacy.
Apple’s dedication to data privacy became national news in early 2016 during Apple’s very public fight against the FBI, which filed a court order asking the company to hack an iPhone that belonged to one of the San Bernardino, Calif., shooters. Apple opposed the court order in a public letter citing concerns for user privacy.
READ MORE: What Apple’s opposition to phone hacking says about its dedication to privacy
Apple has also strayed from running extensive advertising programs on its software like Google, which makes the Android operating system, so it doesn’t collect as much user data by default.
As Bearse pointed out, this means Apple’s AI technology may be limited compared to Google or Amazon.
“How quickly a machine can learn is based on the information that it has access to,” he said. “The iPhone currently uses information that it can find on the phone, keeping everything private locally on their device.”
Though some might suggest Apple break up its hardware and software development to foster more innovation, Bearse said he highly doubts a company that prides itself on the total package would attempt such a move.
“Their entire company and this rise to dominance has been this almost religion of software and hardware and user experience – right down to the packing – has been such a stitched together part of their brand,” he said.
Comments