In a Maturing Smartphone Market, Apple Will Be Fine. It’s Suppliers? Not So Much.
Investors may not like it, but the smartphone market is maturing. For a while there, the idea of upgrading every single year in order to get the latest and greatest features available was a no brainer. But in 2018, with a more cost-conscious consumer base, and a smartphone segment that’s all but tapped out from a technological innovation standpoint, we’re more willing to hold onto the device for longer stretches at a time.
Apple recognizes that, and that’s exactly why they’ve been making moves to position themselves to survive in such a world. You can see that in their decisions to create pricier phones, knowing that they’ll capture a greater average selling price upfront while consumers hold onto the device for longer. And they’re placing greater emphasis on turning the smartphone it a recurring revenue generator through things like Apple Music and other add-on services. And if that wasn’t enough, their lack of concern over the maturing smartphone market became abundantly clear in their decision to stop reporting the volume of iPhones sold each quarter—a move that analysts have fretted over, but that the company called necessary because of the figure’s increasing lack of relevance.
But it extends beyond that. Apple’s decision to open iOS 12 support up to 28 of its active devices is an unprecedented one. No previous version of the mobile operating system was that far-back reaching. Additionally, the company (albeit under excruciating public pressure) offered cheap battery replacements for older devices after it admitted to throttling them in order to extend their life.