Jason Snell, writing for Six Colors:
Even if iPhones do get replaced at a much faster pace than Macs and iPads, it’s undeniable that most iPhone users don’t have a Mac. Your average Apple customer is an iPhone user.
For the last two years, the iPhone has provided more than half of Apple’s corporate revenue, and in the most recent quarter it was more than two-thirds of the revenue. Apple is rapidly becoming iPhone Inc., maker of smartphones and… various other devices.
And:
For the Apple Watch to become a hit product, it just needs to please a bunch of iPhone users. The iPhone market is large enough that the Apple Watch doesn’t need to stake out new ground for Apple, at least not yet. (I don’t think the Apple Watch will ever connect to Android devices, but it’s possible that one day the Watch might be such a device unto itself that it simply won’t care if you have a phone nearby, or what’s on it.) It’s going to be years, if ever, before the Apple Watch becomes a product that isn’t made for iPhone users.
It’s become an iPhone world, true, but it’s all about the ecosystem. Apple is too smart not to recognize that all the (profitable) elements in the ecosystem are supportive timbers that each do their part to keep the ecosystem upright and working.
But I still have to lament the lack of progress in a product like the Apple TV. This is a product that’s seen very little hardware improvement in ages, with software that’s in desperate need of a rethink. It’s been passed by in every way by its competitors.
To me, this is the center of Jason’s argument. Is Apple TV an important part of the ecosystem? It should be. The migration of eyeballs from traditional television to net-based programming is incredibly important, from a strategic standpoint. Apple ignores this part of the ecosystem at its peril.
It’s an iPhone world. For now.
Is this a question deserving a question mark? It should be 🙂
As for the Apple TV being passed in every way by its competitors, I’m not so sure. What value add does the fire stick have? The chrome cast? The fire can play Amazon content, which honestly doesn’t thrill me, but at the cost of being unable to play iTunes content, which I use all the time. Apple TV could use an App Store so I could run things like plex, but not all its competitors do this yet either.
All too often we hear that Apple must not rush things – and maintain the value of the mantra ‘it just works’. Because whatever it is anyone else might be doing, it won’t be a patch on what Apple brings out – when it’s ready. Patience required.
Agreed. My Apple TV is used most frequently for Netflix on the native app, AirPlay from my iPhone, and watching locally stored movies. Everyone else is ignoring local content because they only care about cloud storage.
The problem is the ecosystem currently leans more heavily toward supporting the iPhone than expanding the line. Apple Watch, arguably, can be viewed as a means to sell more iPhones. iPad is acting like a feeder product to the iPhone, as the depleted iPod line previously did. Mac is the only platform developers can use to create iPhone apps. Apple TV is how I AirPlay content to the big screen. Apple seems to nurture their support aspects more than their own functions.
At the same time, some of these products would benefit greatly if they were more closely tied to iPhone support. I’ve previously argued the iPod shuffle could get a boost by being repurposed as an iPhone remote. Similarly, a lot of Apple Watch functionality would fit well in an iPod nano. Apple TV could be retooled as a HomeKit command center. The iPhone ecosystem should be more balanced in how it feeds the other parts.
The biggest issue with the AppleTV is that sometimes it just stops working, and will then start working again. A percentage of AppleTV owners will attest to this. It will suddenly stop seeing the network, while every other wireless device in the house still sees the network fine. For me it’s annoying. For older non-techie folks, it’s a very bad thing. The second biggest issue is that using the AppleTV with the remote that comes with it is a horrible experience for any type of text input. Yes, you can use your iPad if you have one. But doing a search in Netflix or YouTube with that thing is inexcusable in 2015. There has to be a better way – in this case, it’s like Apple didn’t even try, and instead just did the same crap everyone else has done. I feel like I’m using an 8 bit Nintendo, putting in my save code.
Thanks for the ? catch. Fixed.
I don’t think Apple needs to do anything to sell more iPhones. They’re “supply constrained” for months after release, even after quarterly results show they’re pumping them out in vast quantities.
“Is Apple TV an important part of the ecosystem? It should be. The migration of eyeballs from traditional television to net-based programming is incredibly important, from a strategic standpoint.”
Whose strategy? I’m pretty sure the MBAs in Cupertino can read a spreadsheet. I’m not saying everything they do is motivated by profit (e.g. “the bloody ROI!”), but if Apple can’t do it beautifully in millions of units/quarter at a 30%+ Gross margin they’re not going to bother.
I get it, Jason wants Apple to make lots of products as “insanely great” as the iPhone, but the fact is that the iPhone is a unicorn. As was the iPod, and to a certain extent the iPad. They’re are only so many things that millions of consumers will pay a premium for, and high-style highly miniaturized portable computers are about it.
Jason is a smart guy, but I think he’s forgetting that Apple is a profit-making organization. ” With two-and-a-half times the sales, who can argue?” Well, him. ” Not that Apple’s doing anything wrong, but that the iPhone’s success is so massive that it’s got to be coloring the decisions Apple makes.” So what?
I’ve never had that problem, but I have had the HDMI blank screen issue. Of course, this is a problem with any HDMI connected device because HDMI copy protection protocol is the worst. The lay person doesn’t realize this, however, and will blame the AppleTV.
If we ever get a connector other than HDMI, I will leap for joy! (Or roll in my grave. I may be gone by then.)
Around March 12th, people will stop saying the Apple Watch is an accessory and start seeing it the other way around – the iPhone6 is an accessory to the Apple Watch.
Around March 12th, people will stop saying the Apple Watch is an accessory and start seeing it the other way around – the iPhone6 is an accessory to the Apple Watch.
I guess Jason’s “little birdies” don’t know that a lot of engineering talent within Apple has moved to TV? Soon, Jason, soon.
As for the iPhone…when you’ve spent over a decade carefully building this massive wave, you’ve gotta ride it for all it’s worth. There’s still huge opportunities for Apple with the iPhone. They’d be irresponsible to not wholeheartedly pursue those.
I’m not so sure of that. I don’t think we’ll see iPhone gross margins or upgrade cycles on the Apple Watch, so iPhone will always be the cash cow. The iPhone is the center of the Apple ecosystem, and probably will be for the foreseeable future.
The seasonal surge does not mean sustained growth. It’s that continual, year-over-year growth the ecosystem feeds. It’s effective, but I think they could do more to pay it back.
That “seasonal surge” is starting to become the rule, rather than the exception. Like I said the other day, let’s see what happens this quarter in China. Apple could very well be looking at “bumps” from release in September, Holiday it the West in December, and then Holiday in the East in February. That’s 3 out of 4. Give the summer, which is generally a slow time in retail, over to ramp-up for new model release and Apple can look at a very profitable and/or busy quarter every quarter every year. There’s your sustained growth.
For awhile, I agree but i think a much shorter time than presently expected. Watch is a better vision. iPhone is a thing I have to carry, not forget, constantly cling to. Soon it will be easy to leave behind as my house, my car, my Beats headphones, iPay, all coordinate with my Watch. The Watch will drive iPhone and all of the ecosystem.
The seasonal surge is already the rule, but it alone is not an indicator of sustained growth, which you’ll notice I already said was fed effectively by the ecosystem.