Apple needs to create a totally new product? If so, what’s going to be your choice?
Apple, the master of the world’s smartphones and awesome gadgets like tablets has broken nearly every company sales record last quarter but for long it will going to stay at that bizarre pace?
One of the best newspapers, The New York Times recently published an exciting report regarding Apple and its unmatched growth and success over the last 5 years. The article explains that Apple could soon be going up against the law of large numbers:
“Also known as the golden theorem, with a proof attributed to the 17th-century Swiss mathematician Jacob Bernoulli, the law states that a variable will revert to a mean over a large sample of results. In the case of the largest companies, it suggests that high earnings growth and a rapid rise in share price will slow as those companies grow ever larger.”
Several companies have fallen victim to the law, including Cisco and Microsoft — both of which were rated the most valuable companies in the world at some point, and are now down hundreds of billions of dollars from their peaks.
The reason for this? It’s simple. Once companies have do well out their opportunities in their competing markets, they can’t continue to grow unless they enter new ones. Sure, Apple’s smartphone and tablet market penetration is minuscule compared to what Microsoft Windows was at its peak (close to 90%). But what about in 5 years?
The point is that all of Apple’s recent success has been a direct result of it introducing new products: the iPod, the iPhone, and more recently the iPad. For the company to continue growing at its current rate, it would either have to figure out some way to substantially increase the sales of those devices, and maintain that, or it would have to unveil an entirely new product.
Rumors seem to point to the latter scenario, as there has been a lot of gossip over the past several months indicating that Apple would soon unveil its own TV set. Experts and market analyst alike seem to think that the Cupertino Company is looking to enter the TV market sometime in the near future. But as usual, we’ll believe it when we see it.
Now have a look at Android handsets. While there are high-end Android phones that cost just as much as, if not more than, the iPhone, there are also countless handsets that are quite a bit cheaper. We’re talking two or three hundred dollars at full price. Yikes. Given that information, and the fact that economies around the world are struggling right now, you can see why Android phones are much more popular in countries without carrier subsidies. This also explains why Android handsets make up close to 50% of the overall smartphone market.
Even though Apple doesn’t seem to be in need of any help at the moment, it’s going to want to gain ground in new markets (prepay, etc.) to continue growing its handset business. And it seems like the only way for it to do that (at least in some areas) is to make a less-expensive smartphone. But we don’t see that happening anytime soon. Do you?