iPhone Tipping Points

Benedict Evans:

There are fewer and fewer new high-end buyers coming into the market and the ones you sold to in the past may increasingly be tempted by ever improving cheaper phones. So a high-end phone maker risks losing sales if it stays at the high-end, or losing margin if it makes cheaper phones, or both.

In case it isn’ t obvious, this is the essence of the bear story for Apple. There’s lots of froth and nonsense swirling around as well, but this is a perfectly coherent and intelligent story. It isn’t that Apple is losing sales to Android (it isn’t, at least not yet) - it’s that the high-end market itself may be close to tapped out.

Smart analysis. One thing Evans neglects to address, though, is that the above is not really the bear story for Apple, it’s the bear story for the iPhone. The bear story for Apple is that they’ll never have another hit to take the iPhone’s place. Go back a decade, and it was the same with the iPod.

But Apple already has the next big iPhone-sized hit: iPad. That’s where the crazy year-over-year growth remains.

★ Thursday, 25 April 2013