In 2015, the entire mobile industry is the iPhone and nothing else

The title of this article may sound a bit extreme, but it is something I have been thinking about for some time and the more I think about it, the more convinced I am that the iPhone is the only ‘thing’ in the mobile industry that is heading in the right direction. 

We shall start by looking at the minor players in the industry-

PHONES

BlackBerry

It is no secret that the company has been floundering and that it has not produced hardware or software that has captured any significant proportion of the population for a long, long time. The rumours that it may be looking to Android make a lot of sense, but if you read on you will see why that path will only continue the demise of what was once the biggest mobile phone company in the world.

Windows Phone

Where to start? It has been in existence for a long time and has somehow found its way heading down to the budget market further every year. It has a passionate following and some of the hardware is brilliant, but low single digit market share has stuck to it like a rash that will not go away. The fact that Microsoft now appears to be concentrating on services, especially those for more popular platforms, only emphasises that the phone is a small proportion of the gigantic company.

Windows Phone, as a platform, deserves to do well, but it never has and doesn’t look likely to either in the near or distant future.

Android

This has to be broken down because there are so many players in the Android ecosystem that it can be difficult to know who is doing well and who is languishing.

Google

With the resources and employees to continually push Android forward, Google (Alphabet or whatever) can continue to spend money and time on the platform, and it really does not have a choice. Mobile is where it is at and while the internet and phones exist, Android and Google will remain and will continue to do just fine.

Samsung

The story here seems to be getting worse as each quarter passes. Dwindling sales, overpriced hardware and a sense that the company is always following does not help, but the irony of the biggest mobile company of all failing should not be ignored. Samsung makes some great hardware and is heading in the right direction by simplifying the software, but for whatever reason it is not working. It is hard to know what the company should do next.

HTC

I think it would be fair to say that we are close to the end for HTC. Like Samsung and BlackBerry, the company cannot get a break and cannot seem to climb out of an ever deeper financial hole.

LG

Great phones, good prices, but low sales and the fact that this is an insignificant part of its portfolio suggests a withdrawal from the market until the landscape changes.

Sony

The company has never really succeeded in mobile despite some excellent hardware going all the way back to the glory days of the Clie PDAs. However, with so many areas of the business struggling, it could be worth hanging in there and waiting for the tide to turn.

The fact is that not one Android manufacturer is growing within the market it is serving and this must surely be a concern. Google will continue and could come to dominate with licensed hardware, but the overall picture for Android looks fragmented and unclear at this time. Then again, it is a huge platform and just maybe this is how it should be.

iPhone

Apple sold 47.5 million iPhones in quarter 2 of 2015. It is a phenomenon that is unprecedented in any industry and in particular in mobile tech, and one which is growing as each quarter passes. The numbers are not the biggest, but the profits are (by far) and there seems to be no stopping it. The more you look at the financial and cultural history of the iPhone, the more apparent it becomes that it is unique and this could actually be a bad thing for Apple.

SMART WATCHES

It’s no secret that the smart watch industry has not taken off yet and that even Apple is not selling gazillions of its latest product. The Apple Watch feels like the Palm Treo 650 in the early days of smartphones as we wait for that breakthrough product to capture the imagination of the industry and kickstart the genre. For the life of me, I still cannot see where smart watches are heading and remain convinced that they are not the right form for any time, let alone 2015.

TABLETS

iPad sales are dropping extremely fast and so is the rest of the market, as described perfectly at Above Avalon

The tablet market is in complete disarray. Only five short years ago, the iPad helped jumpstart the category, ushering in multi-touch computing and the modern-day app revolution to large-screen devices. Today, there has never been a time when the tablet market faces so much unknown.

A quick look at iPad and tablet shipment data would show that things have gotten bad in recent quarters. However, in reality, things are much worse than quarterly shipment data would suggest. The seasonality found in the tablet segment makes it difficult to see these long-term problems. A much better way at understanding what has been taking place is to look at the year-over-year change in shipments on a trailing 12-month (TTM) basis, highlighted in Exhibit 1. This smoothing effect highlights that the iPad and tablet have been on the decline for years and things continue to worsen with the overall tablet market hitting negative territory for the first time. All momentum has been lost.

I remember someone once saying that tablets are a fad and that they will drop away within a few years in deference to more portable devices (that was me by the way) and many people laughed at him (me). The argument that tablets are not like phones and that people keep them for longer is valid to a point, but from people I know and from the prevailing financials, much more than that it happening. Tablets are being eaten by bigger phones running apps that are getting better at doing tablet-like things in smaller spaces.

CONCLUSION

The mobile industry is huge, absolutely huge, and millions of us have realised that we do not need full-sized computers to get things done, but we are in a time where the so called Post-PC era is dominated by just one device. As I said before, the iPhone is a phenomenon and it stands alone which should be a concern for all of the other companies who are struggling in this market and even for Apple itself. If iPad sales are sliding and Apple Watch sales are not gaining traction, and Mac sales are only increasing marginally, where does Apple go next?

It is arguable that the iPhone is Apple’s only huge and continually growing success in the last decade when judged over a period of time and that the rest of the industry is struggling to get close to the revenues it produces. Indeed, we probably need the iPhone to start failing for the rest of the industry to grow because it is so dominant in the areas that really matter.

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