Recent reports from Apple, about the slowdown of its key iPhone business, have observers worrying about its underlying strategy. Here’s a recent comment (from RetailWire) on the topic:
To some extent I agree that Apple can learn from the kind of profitable incremental volume that Amazon generates with its cloud services and membership revenue. But at heart Apple is a different kind of company. Its brand promise is based on product development (not just ancillary services like iTunes). And the product development has been lagging for the past few years, especially on the smartphone side.
The perceived saturation of the iPhone business, and the change in pricing strategies by the phone carriers for the past couple of years, are major disincentives for the annual trade-up frenzy that used to drive Apple’s business. The company needs to worry about how to jump-start its smartphone business, but more importantly Apple needs to figure out where the next game-changing product is coming from.