Earlier this week, Apple held its major product announcement event for the year. Although there has been a buzz about the new devices that will be launched, the event highlighted three trends we are likely to see across the wider device manufacture and tech industry.
As has become the practice and around the second week of September, global tech manufacturer, Apple, announced the latest products and upgrades that will be released. This much-anticipated event was held earlier this week, on 10 September to be precise, and did not disappoint. Apple announced the release of new smartphones, the iPhone 11, 11 Pro and 11 Pro Max; new iPads, which now has its own Operating System; and a new Apple Watch (the Series 5).
In addition to the new devices, Apple announced two other releases. First, Apple Arcade, a games subscription service, which will be part of the App Store, and should become available later this month; and second, Apple TV+, a video subscription that will launch on 1 November.
Although, as per usual, pundits might argue that these new devices are marginal improvements from the previous ones, the new products are likely to offer better performance than their predecessors – thanks to more powerful chips, faster processing, even better cameras, along with other new features and capabilities. However, and in my opinion, the bigger news coming out of the Apple event was not the new devices and services, but three occurrences and takeaways during the announcements that could signal a change in the tech manufacturing space, and the wider tech industry, going forward.
1. Diversification into content
To a considerable degree, and as a device manufacturer, Apple has been providing part of the infrastructure consumers need in order to access and use technology – through its laptops, smartphones, and tablet computers, to name a few. In establishing iTunes and the App Store, Apple could better control the ecosystem in which its devices operated. For example, apps that could be used by its devices would be vetted by Apple, and in a similar way, iTunes provided a means for music, movie, podcasts , and other content to be safely accessed in the Apple ecosystem.
In now offering Apple Arcade and Apple TV+, it appears that the company is moving into the content creation space. With regard to Apple Arcade, it is partnering with several developers to provide games for that subscription service. On the other hand, and for Apple TV+, the company has been bank-rolling the creation of original television series and similar content for that new service. Ultimately, and through the launch of those two new services, it appears that Apple is broadening its role from device manufacturer and ecosystem regulator, to now include content creator.
It could be argued that content creation is not a natural progression for a device manufacturer, but the fact of the matter is that in this day and age, content is where much of attention is placed. Once it is in place, the hardware and infrastructure tends to be overlooked, and content – what we are viewing and doing on our devices – comes to the fore.
Further, with consumers holding on to their devices for longer, at least two years, it means that after the initial one-time purchase, Apple is unlikely to see the majority of its customers buying a new device for perhaps three years. Subscription services offer an excellent way for the company to remain connected to its customers, generate a recurrent revenue stream, whilst also fostering continuing brand loyalty.
2. Lower prices
Over the past three or so years, and particularly for Apple devices, prices for its devices had been increasing. For example, last year’s entry-level smartphone, the iPhone XR was priced at around USD 749.00. However, the price for this year’s entry level phone, the iPhone 11, will start at USD 699.00. This trend was evident across most Apple product lines, with either prices for new releases either remaining the same, or lower than those of their predecessors.
In a consumer device market that is becoming increasingly saturated, evidenced by the lower sales across all of the major manufacturers in recent years, industry analysts are suggesting that consumers may not have been able to justify the spend for increasingly expensive Apple devices, in particular, for only marginal improvements in features and performance. As a result, they have been holding on to their devices longer. In Apple lowering their prices, consumers may be incentivised to buy.
3. More options for consumer personalisation
Finally, and for its devices, Apple is offering a bit more variety. For example, and with regard to is iPhone, in addition to the three new lines that will be offered, consumers are being given a range of colours to choose from. The same for the Apple Watch. However, the ability for consumers to better customise the devices to their needs and lifestyle was more evident in some of the features that were highlighted during the product launch event, such as:
- the camera being able to capture ultra-wide angle pictures (iPhone)
- improved water resistance (iPhone)
- compass and fall detection features (Apple Watch)
- electrical heart sensor (Apple Watch).
The range of features and options of the devices will allow them to be better aligned to the needs of their users, rather than users trying to make the features work for them. It is thus likely that users will get even more attached to their devices, as they enjoy features that they needed, and those they never knew they wanted.
Image credit: Gerd Altmann from Pixabay
I couldn’t understand, for the life of me, why there was nothing geared for 5G, though. 5G is already here, but none of Apple’s latest products/services are not ( well … appear not to be ) ready for it. Unless there is something I missed or still miss.
Kamutula,
The lack of provision for 5G, in my opinion, says a few things:
– Apple is not as cutting edge as we think. (Many have argued that they never were. They tend not to be the first out the gate, but eventually try to perfect and put their own spin on features that have been on the market for a while)
– It could be strategic. The US is still in the very early stages of rolling out 5G, so it is unlikely to be a used feature on this year’s phones. By next September (2020), and if 5G roll-out is more advanced, it may be included at that point, and especially for the top of the line phone.
– When Apple eventually comes out with a 5G phone, it may be a big incentive for people to buy it – even if they bought the iPhone 11 this year, but can get a good trade-in price.
Its not really diversification if you are monetizing a captive audience that you control from end to end. Apple is not solely a manufacturer but the are gatekeepers for the app store, software development, innovativation and payment system for the entire apple platform which includes the computers, phones, tablets. Its not diversification – it capitalization. Building a apple car is diversification.
Owen, I don’t think I agree.
If one has been a device manufacturer, and now is focussing on services – which requires a new (or different) set of skills, resources, business models, etc. – it can be seen diversification. I don’t think it has to be as far removed from the business’ core focus – such as an Apple car – to (again) be considered diversification.