Time Magazine says “Apple has to create a new category, or it will sink into normality”.
Apple is doing very well leading one of the biggest transformations in last 20 years. You would have to be a complete idiot to expand out of an extremely large market where you have a strong lead (at least as measured by smartphones actually used by people to connect to the internet).
Apple is making ungodly sums of profit in a highly lucrative market that is still growing very fast. This is a market (smartphones) that grew 46% as a category, according to Gartner.
Let me address some of the ideas raised:
- Big Market: I think you have to be living under a rock to believe that smartphones are not a huge category – and as we all know Apple is going after the non-PC segment tablet market too and leading.
- Growing Market: The phone and tablet markets are growing fast.
- Unsaturated Market with High Replacement Rates: Yes, everyone in the silicon valley seems to have the latest gadget but the numbers tell you clearly that the market is growing very rapidly as a category.
- Televisions: Well, you don’t kill a TV with a better TV. You kill it with a Retina screen iPad Air. And Apple TV. And iTunes.
- Wearables: The only wearable I wear every day and would turn around my car for is — my phone. Samsung and Apple are loading up the phone with sensors. The wearable accessory market is a blip. Go ahead sync your Basis and FitBits with your iPhone.
- Cars: Yes, some very smart analyst has written a letter to Dear Leader that Apple should buy Tesla. Yes, the CEO of one of the most undervalued companies should burn its cash and/or stock on one of the most overvalued companies. I love Tesla but Apple is already doing what it needs to do – own the experience inside the car with relationships with likes of BMW.
- With A7, Apple has essentially taken on Intel and Qualcomm. When you buy Apple phone or tablet, you are essentially also helping it sell more chips.
- With Siri, Apple is breaking new ground in voice.
- With iPhone 5S, Apple is entering identity market.