7/25/2015

iPhone Has Become The Cornerstone Of Apple, Even Determine The Fate Of Apple

It's easy to forget for Apple in 2007 released the first iPhone, just how great significance, but now it has become the foundation of Apple.

Recently, well-known analyst Neil Cybart outstanding performance of Apple in recent years carried out some evaluation, and from his this analysis, we have seen a number of Apple's development trend in recent years.



From the current situation of view, iPhone to any Apple's new product or service has a great driving force, and this will allow them to get a good driving force turnaround in a short time and has become a hot product.

From the financial and commercial level view, iPhone is one of the most important products and services. iPhone accumulated a lot of development potential in Apple's development process, it is difficult to imagine in the next five years, there will be a product beyond the iPhone appeared. We can predict the future, Apple iPhone will become the company in the future, iPhone will bring new development opportunities and challenges for Apple.



Just last month, Apple's celebrated iPhone advent of the eighth year. It's easy to forget for Apple in 2007 released the first iPhone, just how great significance. Look at the relevant data accumulated since then under the iPhone can help us predict the future of this unique product.

726 million units sold, $443 billion revenue (50% of total revenues), $200 billion gross profit (60% of total gross profit), net income of $ 120 billion (60% of total net revenues).

With the continued development of the iPhone, Apple's iPhone is now an annual sales of up to 250 million, accounting for about one-third of the history of iPhone sales.

The importance of Apple's revenue

Everyone knows that Apple's iPhone business a vital part of the development, but few know exactly in charge of Apple's iPhone to kind of what extent financial. In the first half of 2015 fiscal year, iPhone accounted for 69% of Apple's total revenue, up from 57 percent the same time last year. For the total profit, the trend is even more evident in the two quarters, 81% iPhone total profit, up from 68% last year. Last year, China Mobile began selling iPhone, in addition to this change affected, but to a large extent with iPhone6 ​​and iPhone6Plus sales frenzy in China's relevant. Apple's quarterly earnings report should be renamed the "iPhone sales update," because any of Apple's other business and trade are not like the iPhone so strongly affect the financial position of Apple.



Since iPhone users prefer 2-3 years to replace a new phone, iPhone's strong profitability and shorter upgrade cycles cause it to occupy a significant share of Apple revenue.

Apple iPhone revenue accounted for exactly how important position? We can give an example to illustrate this problem. If Apple's quarterly iPhone sales expected to reduce by 10%, or 500 million units, then Apple's earnings per share will decline by 10%. If we set the iPad or Mac sales expected to reduce by 10%, then the effect on profit per share will only be a rounding error.

People are increasingly aware iPad or Mac in Apple's quarterly earnings report, becoming an asterisk, nothing more than that some of the effects and sales figures. While Apple's return on capital is beginning to control by the iPhone, but the iPhone has a great significance for the United States and provide cash flow to repurchase and dividend funds available to spend on. In the past eight years in the historical process, iPhone Apple earned more than 100 billion in cash, the cash to buy back shares and pay dividends in terms of have played a great role.

The importance of Apple's business

From a managerial point of view, iPhone is important to bring the power of business opportunities and risks. iPhone success to make Apple's market dominance and market positioning foothold. Around the world, iPhone 6 and iPhone 6 Plus help Apple expand its market share, iPhone nearly 500 million total subscribers. This existing environment to attract a lot of developers and third-party companies to invest in iOS ecosystem.



In addition to the return of capital project funds, cash generated by iPhone sales also used to develop new products and programs. While iPod sales funded the development of the iPhone, but iPhone sales will be invested in the development of Apple's vehicles. However, iPhone very strong growth trend does have some risks. From Apple's perspective, vitality and a sense of participation in keeping iPhone users can maximize the benefits for them. This approach prevents debris or stagnant in terms of great help. But accordingly find themselves when huge Apple iPhone user base in more and more users choose not to upgrade to the latest operating system version, iPhone ecosystems will be weakened.

In iOS 9, Apple for the user to set a series of new features, because the user does not have enough memory space, Apple iOS reduced utilization. For example, the user is ready to install iOS 9 时 receive an insufficient space to display popups and prompts in order to make room for updates to temporarily remove the application. iOS after 9 installation is complete, remove applications will be reinstalled. In addition, the application of sparse, applications sliced, flexibility, resources and binary symbols that are designed to keep the iPhone user base of activity, especially those who may continue to use the old model of users.

Another risk arising from strong sales iPhone is designed to promote the hardware or software needs of iPhone while facing increasing resistance from users, those users holding the opposition to change the attitude. We are saying here is the theory, the larger the user base, the more feel difficult to reach. The end result may be the change lead to alienate a part of iPhone users. An example of this is that Apple changed the iPhone mini player connector. An example of software is iOS 7 iPhone interface so that each person has to change its appearance. Unchanged for the competition will provide a broader product development; and change, but faced with potential users from the negative impact of delayed purchase or resentment brought, for some of these effects have caused some technology companies disaster. Evidence that Apple has no intention to follow a similar approach. The latest Apple MacBook also shows that even if change means alienating some users, Apple is not afraid to promote design.

Apple's biggest risk facing the iPhone is the importance of product management neglect led to other opportunities, these opportunities may seem too small and in revenue and profits are unlikely to reach the status of iPhone. But in reality, in order to finally launch a product to go beyond the iPhone, Apple should face different kinds of factors. One day, the user only be worn on the wrist of a well-equipped to meet their own needs in most aspects of the computer, and Apple offered the watch is this attribute, while Apple seems to have realized that for the purposes of this iPhone risk.

Strengthen the value of the iPhone

Over the next five years, Apple might be able to focus on enhancing the value of the new iPhone products and services, rather than develop a new iPhone finally be able to go beyond products. For the period compared with 2005-2010, in a way, it sounds like Apple slowed their pace of development. Indeed, in just a few years in order to develop a product to go beyond the iPhone really too difficult. Apple This dynamic table shows some concern that these issues include whether this is one of Jony Ive was promoted to design director of reasons, this promotion made him free from the daily management duties, to pay attention to Apple Design a more strategic tasks. These tasks include the development of luxury for wearable device away to meet the company's retail infrastructure.



Because "forever" it is a long period of time, so we can not assert that Apple never not produce a like the iPhone and important products and earn money. Every two to three years most consumers are willing to spend 600-700 US dollars to buy the iPhone, which means that Apple has plenty of opportunity to get people to spend more money on Apple's new products and services. However, in the next five years, iPhone will be Apple's most important product, Apple will not have a second choice.

There is a saying in Jobs Quotations: "If you do a number of things and the results are very good, then you should go look at the other wonderful things, do not think too long to find out what's next.." These words have been demonstrated at Apple headquarters, which nicely sums up what kind of strategy that Apple should the future iPhone should take.

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