Apple – and the Future of your Phone

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Apple – and the Future of your Phone

Apple has just become the world’s first trillion dollar company, thanks to the continuing success of the iPhone. Will the success last? Or are there some warning signs on the horizon? And what does the future hold for your phone?

By Mark Richards

20 years ago I turned to my wife. “Well, that’s it,” I said. “Even my mother has a mobile phone now so that’s the market just about saturated. I can’t see it expanding any more.”

As far as wrong predictions go it was right up there with some of the best of all time…

  • “This ‘telephone’ has too many shortcomings to be considered as a means of communication. It is of no value.” Western Union decide to stick with the carrier pigeon, 1876.
  • “The horse is here to stay but the motor car is only a fad.” The President of the Michigan Savings Company gives investors some far-sighted advice, 1903.
  • “We don’t like their sound and guitar music is on the way out.” Decca refuse to sign the Beatles in 1962.

Apple becomes first trillion dollar company

As I said, no future for the mobile phone industry, which explains why Apple has just become the first company to be worth a trillion dollars. First things first – what is a trillion dollars? Well, it is around £767bn – which in very round terms makes Apple worth 1,000 times more than Manchester United and six times more than HSBC bank.

The trillion dollar valuation – which saw Apple win the unofficial ‘race’ with Microsoft, Alphabet (Google’s parent company) and Amazon – came when the company shares closed at $207.39 (£158) on the New York stock exchange.

The company’s shares have risen by 50,000% since the company first listed in 1980, and by more than 1,000% since the iPhone was launched in 2007, with the development largely overseen by Tim Cook, who took over as CEO after Steve Jobs died in 2011.

Could Apple go on to be worth more than a trillion dollars? The answer to that is yes, as business analysts do not see the shares as particularly expensive. For example, Apple shares trade at 15 times expected profits compared to 82 times expected profits for Amazon shares. (Remember, figures like that are for illustrative purposes only: they are not investment advice, and you should not take them as such.)

So why have Apple shares done so well?

The answer is simple: the iPhone. Ownership of the iconic phone has now gone past the 1bn point and – according to the most reliable estimates I can find – between 1 in 5 and 1 in 6 people in the world own an iPhone.

But it is at the top end of the market that Apple has been enjoying its recent success. The recent rise in the share price came after Apple reported strong demand for its most expensive phones – which saw revenues rise strongly, despite just a 1% rise in phones shipped.

Apple – and the Future of your Phone

Analysts had expected the average price of an iPhone to be just under $700 – in fact, it came in at $724 (£552), with the $999 iPhone X, launched last year, remaining the most popular model.

Add in 31% growth in Apple’s service business – which includes the app store – and you have the recipe for the world’s first trillion dollar business.

But will it last?

Clearly, Apple’s continuing success is heavily dependent on the iPhone. Could there be some warning lights flashing? In South Korea Samsung has just posted its slowest quarterly profit growth in more than a year due to disappointing sales of its Galaxy S9 smartphones. That said, ‘slow growth’ still translated into a quarterly profit of $10.2bn (£7.78bn) – although that is roughly a fifth of Apple’s profits.

…And then figures from Ofcom in the UK revealed that the number of mobile calls fell for the first time ever in 2017.

But Apple do not need to worry: the same survey revealed that people now see web browsing as far more important making calls, that two in five adults look at their phone within five minutes of waking up (I never realised that three in five adults were still in love) and that 78% of people say they could not live without their phones.

The survey also reports that people check their phones once every 12 minutes – so despite my 20 year old prediction, it looks like our phones are here to stay. The question is, what will the future look like?

The future of your phone

Perhaps the best guide to what the future holds for your phone came from the Mobile World Congress, held in January in Barcelona. Here are five predictions from the Congress – but read this article again in 12 months’ time and they will seem hopelessly outdated…

  1. Your phone will recognise you. That tedious business of typing in 6-9-3-4-2-4 to unlock your phone. In the future your phone will recognise your face, the tone of your voice (“I can sense you are angry today, Mark…) and even the pattern of your typing.
  2. Your phone will shift reality. It will not be able to do anything about the fact that your football team have lost 4-0, but your phone will be able to show you exactly how that new desk would look in your office, or how you would look wearing that new shirt you have just photographed.
  3. Your phone will be more flexible, more durable and may even fold. Presumably so you can leave it in your back pocket and not worry if you sit on it…
  4. You will not need to charge your phone so often. Kinetic energy could be the big breakthrough here, so that your phone charges itself as you walk around.
  5. Finally, your phone will make much more use of virtual buttons and virtual assistants. Whoop! Whoop! Regular readers know of my frustrations with Siri and Alexa but virtual assistants are set to become much smarter and more intuitive. They will also help you navigate your phone, so physical buttons – including the home button – are likely to disappear from your phone.

And to think it took me half a day to show Mum how to make a call…

By | 2018-08-03T09:40:38+00:00 August 3rd, 2018|Business, Technology|0 Comments

About the Author:

A previous financial services business owner, Mark is an experienced Journalist Speaker, Speechwriter and Coach. He has written for a number of websites related to the financial sector and won numerous awards. Mark has also published a number of books.

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