Apple and the Future

If you’ve kept up on the latest Apple rumors, you have a good idea of what to expect today at the latest Apple iPhone event. We’ll have new phones: the iPhone 6s + 6s Plus, which are iteratively better than last years model with improved cameras and force touch. The Apple Watch will get a nice software upgrade: watchOS 2, which will support native third-party apps, allowing these to be as fast as the native Apple apps. For new products, it’s widely expected that Apple will release an iPad Pro – a much larger model that supports a styles and is aimed at the professional market. The other looming product is the long (long) awaited Apple TV. This is not a television, but a replacement set top box that’s expected to run apps and put a strong focus on games, potentially supporting a dedicated controller. While they’ve profited wildly from iOS gaming, Apple has a long history of lackluster support for games, so this would be a big shift, if true. As the “unbundling” of cable moves forward, expect this device to support apps that enable unbundling, and though it hasn’t been easy for Apple, they’re pushing hard to change the video landscape like they did with iTunes and music.

As we head into this event, there are a few other things happening that are worth examining. We know that Apple sells about 20% of the smartphones in the world, while taking the vast majority of the profits in this space. Business Insider has a chart that compares the iPhone business to some companies, to illustrate how big this business is:

iphone-market-size

The scale of the smartphone market worldwide is unprecedented. We’re moving towards a place where everyone on earth will have a smartphone, and they’ll be replaced regularly. Many will be low-cost devices, but there is huge money to be made doing what Apple is doing at the high end of the market.

The question for Apple is this: what’s next? Because the market for smartphones is so huge (everyone on earth), it’s an obvious thing to ask: what’s next, and what can be bigger than the iPhone business?

There is a lot of smoke around the Apple Car rumors, and it’s clear they are doing something in this space, we just don’t know what yet. Benedict Evans tweeted this about the potential Apple Car business:

It’s clear that we are going through some changes in transportation, and things may look radically different in 10 years, but this does show the relative size of the higher end of the auto market compared to the iPhone.

The new Apple TV puts a spotlight on content and gaming, but as we increasingly move to our phones as the primary interface to our world, it’s clear that these can be great businesses to be in, but they won’t compare to the size and scale of the smartphone market.

Today we’ll learn more about what Apple has in store for the short term – at space150, we’ll be looking for hints to what’s coming in the longer term.

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