What will Apple do next and why should you care?


 Tom Hain (aka Mr. Mac), ponders the question of Apple Mac’s $155 billion war chest, and what the company’s next move might be to keep their half a billion active credit card users happy.  Whatever it is, says Hain, you can be sure it will be well thought out.

Whatever Apple does affects everyone in the modern connected world whether you use iPhones or other brands, or whether you use a Mac or a PC. It is so influential not because it has class leading hardware and software integration or the newest features – indeed other platforms often add new features faster than Apple does. But it has a unique influence because its users spend more money on their devices than anyone else’s users. Much more money, almost EIGHT times as much on iOS devices than Android/Windows according to Forbes, the money people.

Which means that it is taken more seriously by commercial interests like software developers than other platforms. Apple leverages this influence into power in its negotiations when making deals and acquisitions with media companies. So what Apple does affects you whether you use their devices or not.

A huge amount of Apple’s profits, currently 76%, come from iPhone sales, but what happens when everyone has them and revenue tails off? Although the iPhone bubble shows no sign of bursting in the short term, global smart-phone sales are declining. They can’t rely on ever increasing iPhone sales without diversifying, or they will go the way of Nokia and Blackberry who rigidly stuck with their existing business models into oblivion.

Apple may not have the largest share of the mobile phone market - but they have the most profitable.

Apple may not have the largest share of the mobile phone market – but they have the most profitable, and where they lead, others follow.

At this point Apple have barely dipped their toe into the Digital Content business apart from gradually building up iTunes into a business generating US$5 billion per quarter. Digital Content being all the different media we consume on our various devices, computers and TV’s, but currently excluding cinemas. If you consider that they have the money to buy outright any number of media conglomerates with a ready portfolio of movies and TV shows you have to agree they are taking it slowly. They aren’t always the first players but when they do act it is with market-changing effect. There were smart-phones before the iPhone became the default standard and started the smart-phone revolution.

With their war chest of US$155 billion Apple can make serious waves. When they do move into a media area a sizeable part of their user base will move with them. They have the largest database of active credit card users in the world, well over half a billion. It’s much simpler to convert those users to a new service than it is to recruit new users, even when that growth is going along quite nicely thank you, with tens of thousands of new users joining iTunes every day.

They could create or buy their own movie studios and begin making feature films and TV shows which would be initially exclusive to Apple users. Could do. What they will do remains a secret that they keep to themselves until the moment they are ready to make the move.

January 24, 1984 - Steve Jobs announced the Apple Macintosh.  He may be gone, but the product - and the blue jeans - live in.

January 24, 1984 – Steve Jobs introduced the new personal Apple Macintosh computer. He may be gone, but the product – and the blue jeans – live on.

Their move when it comes would threaten existing media businesses much like the current Spotify/Pandora versus Apple Radio battle over streaming music which is panning out over the next few months. We can imagine similar battles with Neflix over movies, BlockBuster over video and of course the big one – sport. Apple have the clout to outbid anyone and grab, say, the next World Cup, the next Olympics, the so-called World Series of Baseball and even the biggest sporting weekly global TV event, English Premier League Football. Apple could quickly control that most reliable regular TV income generator much as Fox has done to date, and, of course, you could subscribe via iTunes!

Other digital media companies like Samsung have to keep an eye on what Apple are doing and tailor their offerings accordingly so Apple does actually have a much greater effect than statistics like total handset sales might imply. They lead and others have to follow so whatever device you use Apple has a disproportionate influence upon it whether you like it or not.

Stories about Apple’s research into other areas, like cars, may be premature, but don’t rule out one day driving an Apple car to work listening to your iPhone play through the car’s sound system having spent the previous evening watching your favourite TV show on your Apple TV. Your partner is in the passenger seat watching the rest of the show on the car screen because he/she fell asleep during the last 10 minutes last night and the show has automatically loaded into the car so he can finish it.

This Big Brother is quietly spoken, with immaculate taste and always seems to wear blue jeans…

To contact Tom Hain or find out more about his services go to: https://mrmacintosh.com.au/



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