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  • I would argue that in fact this is going to be the last big smartphone launch.

  • If you look at the smartphone market over the last few years and Apple's smartphone sales,

  • it's very clear that the smartphone market is maturing,

  • and each additional iPhone is a smaller incremental upgrade than the prior one.

  • The iPhone X, the flagship $1000 phone that was launched this week

  • it's beautiful, it does have some new features associated with it,

  • but a lot of folks are saying,

  • "Hey, it doesn't seem that much better, I'm happy with the 8, and we'll wait on it."

  • So, there is, I think, within smartphones, a maturing.

  • We certainly see that in sales, but there is hope for Apple and other smartphone vendors.

  • What Apple has managed to do is remarkably create lock-in for its ecosystem.

  • Not just its devices, it's not just competing on the features of the devices,

  • it has locked Apple users into the iPhone and iOS ecosystem.

  • This gives Apple enormous power.

  • And if you look at where Apple's growth is coming from,

  • it is actually the services business now.

  • Services business has grown steadily the last many years, in terms of quarters.

  • That is expected to continue,

  • and in fact, one Wall Street analyst, Katy Huberty at Morgan Stanley,

  • thinks that Apple is on the verge of launching the next big thing

  • which is, in her view, augmented reality.

  • There has been huge hype around virtual reality and other technologies over the last few years,

  • but in terms of where the rubber meets the road,

  • what's actually happening, it looks like the excitement has moved to augmented reality.

  • Morgan Stanley has a big note that we'll explore in a future Bottom Line segment,

  • talking about what this could be.

  • But Morgan Stanley believes that

  • augmented reality and the services and apps associated with it

  • could ultimately drive Apple to $250 a share.

  • So, what normally happens in consumer electronics is that

  • you have relentless downward price pressure on whatever the gadget happens to be.

  • Apple has miraculously managed to avoid that thus far,

  • they have now created a very wide range of iPhones, priced from $350 all the way up to $1000.

  • So there is a price point for almost everybody within that,

  • and they have managed to tie a services business that is growing steadily and rapidly to that.

  • So even though, I would argue, this is the last big iPhone launch,

  • there is (are) many good times ahead for the iPhone ecosystem, smartphones in general,

  • and it comes down to this services line.

  • So, well done, Apple.

I would argue that in fact this is going to be the last big smartphone launch.

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B1 US apple iphone smartphone stanley augmented reality augmented

That was the last big iPhone launch — but for Apple, there’s a new hope …

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    Jerry posted on 2017/09/27
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