"Why Apple is in trouble: 47% of all revenue comes from the iPhone and it's clear that that market has moved past their sweet spot"
This is not clear at all. Selling tiny computers with mobile broadband is clearly going to be the biggest hardware business for the next 10+ years and 10 years from now the device that generates the bulk of Apple's revenues will probably still be called an iPhone. It may bear little similarity to the current slab/multitouch input phone of today but will serve all the same purposes. And Android based competitors may be 90% of the market then and Apple may still be the most profitable company in the world.
I have a hard time believing the story that 'Apple is in trouble' because they have the highest margins in one the biggest markets which is still rapidly growing.
Steko ask yourself this question. What portion of the smartphone market did they have 3 years ago? What % is that today? What happens when the pie stops growing in 3 years? It's feeling pretty much like PC vs Mac again where they're at less than 10% permanently. Anyway, the point is they need to go find another space now. They shouldn't exit phones they just should acknowledge that the vertical integrated offerings strengths become it's weakness.
"What happens when the pie stops growing in 3 years?"
The whole point is that Apple's pie has a lot more than 3 years of growth left. We are talking about this arbitrary thing called "the smartphone market" but Apple doesn't really compete in "the smartphone market". Apple competes in a tiny corner of "the smartphone market" called "the $450+ smartphone market".
I remember when Apple competed in a space called "the $300+ music player market". And how it "felt pretty much like PC vs Mac again" when cheap mp3 players were taking market share. And then Apple brought out a $250 music player and then a $200 music player and then a $100 music player etc. Now Apple found a bigger market to play in then music players but I'm saying that I doubt there's a bigger market to play in then pocket computers with wireless broadband [1]. And Apple can keep having amazing success in that market by doing both (1) what they did in 2007 (make a much better pocket computer with wireless internet than what was currently in stores), and (2) what they did in the portable music player market (by continually addressing a larger share of that pie).
What's called the iphone in 5-10 years may look radically different, maybe it's Siri on steroids, maybe it's brain control, maybe it's holograms and haptics, maybe it's Kinect, maybe it's aug reality ala Glass, maybe it's smellovision... But what's essential about that product is that it will replace the functions of the current smartphone.
If you're asking me if Apple can keep growing at it's current rate the answer is clearly that they can't long term (law of large numbers). I do think Apple will enter other markets -- luxury watches, tv/console gaming, search and cloud services are the obvious areas. I don't think they will make as much money in all of those put together as they will in the pocket computers with wireless broadband category though.
[1] There are bigger markets of course (cars, houses, health care, education, etc) and there will be bigger new markets (girl robots lol?) but none of them play to Apple's strengths.
>Selling tiny computers with mobile broadband is clearly going to be the biggest hardware business for the next 10+ years and 10 years from now the device that generates the bulk of Apple's revenues will probably still be called an iPhone.
It is completely my opinion, but I also suspect the opinion of others that if that's Apple's strategy, they're in for a very rude awakening. They're taking an increasingly smaller portion of the pie and there is a lot of pie left to take.
If you and me owned a unicycle factory... let's say we're #1 in the world for sales and quality and let's say that China's leaders wake up tomorrow and decide to ban bicycles and push unicycles, turns out the new leader of China's nephew runs China Unicycle. Now the fact that we're rapidly losing global market share to China Unicycle is going to be far less relevant to us than the fact that our sales are going to be going through the roof.
This is not clear at all. Selling tiny computers with mobile broadband is clearly going to be the biggest hardware business for the next 10+ years and 10 years from now the device that generates the bulk of Apple's revenues will probably still be called an iPhone. It may bear little similarity to the current slab/multitouch input phone of today but will serve all the same purposes. And Android based competitors may be 90% of the market then and Apple may still be the most profitable company in the world.
I have a hard time believing the story that 'Apple is in trouble' because they have the highest margins in one the biggest markets which is still rapidly growing.