Apple, A Giant That Must Evolve
Apple announced early January the poor sales of iPhone in the last quarter of 2018. Immediate consequence: a stock market loss of 10% of title value. If Apple has been quick to point the finger at the slowdown in the emerging and Asian economies as the source of this poor performance, the mainly reasons are elsewhere. Indeed, in addition to the exorbitant prices charged by the brand, the smartphone market seems to reach saturation. To survive, Apple will have to diversify and end the iPhone dependency.
The IPhone Dependency
The dependence of the Cupertino firm on its sales of smartphones has worried analysts for some years now. In a saturate smartphone market, Apple is relying on phone sales to fulfill its coffers. But, besides the saturation of the market and the global slowdown in the global economy, Apple sells excessively expensive phones. In addition, innovations on the latest models remain minimal, making consumers reluctant about spending more. This cocktail inevitably led to these poor performances. The need for Apple is now to reinvent itself and for that several projects have been advanced.
A Necessary Turn
To curb the drop in sales of its iPhone, Apple would now turn to the delivery of services. This is what the forward-thinking Wall Street Journal pronounced: cooperation between Apple and the Banking Giant Goldman Sachs. This collaboration plans to realize the launch of a physical bank card. The purpose of this collaboration will allow Apple to benefit from its own payment service. Of course this card will be compatible with Wallet and Apple Pay services and users will earn cash back for certain purchases. A first phase of testing is planned before the end of the year and will concern the employees of the brand.
Another innovation pronounced this time by Bloomberg, the creation of a video streaming service like Netflix, Hulu or Prime Video. In a market utterly dominated by Netflix, Apple has used great means to upset the hierarchy, including the services of two former Sony employees at the development of its platform. Bloomberg already announces nearly a dozen of original content (series and movies) already produced for the launch of the service. Apple can also count on 50 million users of its Apple Music audio streaming offer. It would be interesting to see how the company combines its two streaming audio and video offers to benefit the community on the first.
Bloomberg also states that Apple is preparing a paid subscription service for its Apple News. Scheduled to come into service in 2020, this service would be a logical conclusion to the purchase last March of “Texture” application that offered the same service in return of a monthly subscription.
Apple now seems determined to make a change in its offers. This turn will be followed with particular attention in the field of video streaming where competitors are already legion. Beyond this, it demonstrates the desire for the brand to enrich its already dense ecosystem but especially to definitely secure their leadership position, more than ever undermined.