Apple 2019 keynote – more of Apple less of iPhone

Apple has set the blueprint for the smartphone industry, move on from hardware to immersive rich media content.

It was perhaps the first Apple keynote (launch) which was not just about iPhones. Whatever Apple showcased has a global appeal and it should see a stronger Apple including in India. Apple has over the past few years not primarily been focusing on the number of units it sells; rather it values the revenue it clocks the most. That should infact be the guiding philosophy of every Smartphone maker. But, its not like that with everyone. Profitability is a virtue of few.

The flow the Apple Keynote sets it all. It looks like these are data driven backed by analysis. So, this year’s launch event gives us a fair understanding of how Apple is looking at the whole market. Here are some of the key takeaways for all of us:-

• Smartphones in terms of unit sales are going to be flat or even negative globally. We have already hit the saturation point and can’t sell more and more Smartphones with profits. Apple has taken a shift here in terms of product focus and wants users to subscribe to content.
• The hardware sales years are gone. No longer can hardware be the USP for Smartphones. In fact, whatever Apple introduced yesterday for the first time in iPhones has already been in the market via other Smartphone OEMs. Yes, there could be difference in experience and quality which has been the Apple hallmark. So the serious OEMs shall have to think hardware+ and get into rich media content on their own or through strategic exclusive partnerships.
• With Apple Arcade and Apple TV+, Apple has graduated from Hardware – Services – Content. In its initial years, Apple sold hardware followed by services like iTunes, and now its the era of content in Smartphones. This is a major shift in positioning over these 11 years of Apple’s journey.
• Tablets still have a chance. Contrary to what many believe that Tablets are archived as a smart device category, Apple has further imposed faith in this category. Yes, but with the requisite improvements. I have always been a believer of Tablets having a revival chance, but needs to be thought out well in terms of positioning. Apple has this time positioned iPads more of as a content creation devices than consumption. This brings it in direct competition with Laptops. Though MacBook is available there, iPad has been positioned for certain categories which are in ‘content creation on-the-go’ professions. This could be like journalism. Education is an openly expressed focus for the new iPads. The brands which are attempting to see growth in the Tablets business have to understand how Apple revamped its iPad not only keeping it relevant but creating new opportunities for the device. Simply put, there has to be hardware+software reorientation and Apple has just done so with iPadOS.
• Apple has this time taken a very thoughtful call on the pricing of devices especially in sensitive markets like India. Rather than perhaps working on ‘India’ versions of devices, it has maintained the universality of devices. This it has achieved by not increasing the price as per its pricing history. This time in fact, it has introduced a new product in the series at a lower price than the predecessor. For instance, iPhone 11 is priced at Rs 64,990 against iPhone X launch price of Rs 70,990, which is 9.5% less. Similarly, other products including Apple Watch and iPad have been precisely priced for larger audiences globally, including India.

The key message from Apple is that though hardware incremental innovations will continue to happen future is all in content. Apple has enjoyed a long tenure of over a decade earning profitably on hardware, but it cannot be the same. Yes, for other categories like iPad, Apple Watch and AirPods hardware innovation could still be substantial as these are younger products in comparison to iPhones. But the message is loud and clear. Apple wants to stay focused on revenues with profitability and it cannot come from hardware alone.

First published on techRAI on September 11, 2019.