iPhones don’t matter anymore

iPhones are the new truck

As the world waits to see if Apple’s business really has stopped growing because the momentum of iPhone sales increases has slowed down a bit, it confounds me yet again how little Wall Street gets “it”.


You’d think those highly-paid captains of that bailed out by the public industry, ensconced in their gold-encrusted ivory towers with their spreadsheets, tax avoidance advisors and bailiffs came from another planet.

You see, while the analysts hop, skip and jump in hope to make a few bucks the easy way by making guesses at AAPL stock, they’re missing the point.

The smartphone industry is transforming.

Think about it.


The entire planet is becoming connected one sensor at a time. As it is, artificial intelligence, proactive intelligence, big data and predictive analytics are becoming woven into every part of human life. We are entering a world defined by machine intelligence. 

Computers are everywhere, and everything with an (electronic) pulse is becoming connected. And that’s changing the meaning of mobile.

Mobile is the network, but when the network itself becomes intelligent the actual devices we use to access that intelligence will also transform.

That’s the kind of future Apple Watch explores. An evolution toward an access all areas computing environment in which the devices you carry become the keys to using other connected devices around you. One day you won’t need a computer, just access to one. Like in the movies.


This kind of future is going to be explored in things like Apple Watch, Apple Car, iCloud services, Siri, Proactive and online services.

For Apple it’s an incremental progression from a risky past during which products drove all its revenue to a new model in which products are only part of the mix.

Apple is already deep into that journey. (It generated around $19.9 billion from iTunes-related services in fiscal 2015.)

This is a transition. Keep that in mind when Apple does or doesn’t announce unexpectedly healthy iPhone sales numbers later on today. We are moving away from the traditional connected device (the phone) toward a plethora of connected devices, in different forms.


So how is Apple doing with its exploration of different kinds of connected device?

Some people claim Apple Watch has not sold as strongly as they had hoped. True or false, it doesn’t matter, Apple is learning its lessons and has sowed the seeds of innovation in that space, but there is one metric that suggests it is having more success than critics claim.

Swiss watch sales are down.

“December exports declined 3.8 percent,” Bloomberg Business reports. Jean-Louis Gassée’s Monday Note looked at this in a little detail.

He estimates 12 million Apple Watch sales so far, giving the company $6 billion income (on watches alone) in comparison to the $20 billion total of the Swiss watch industry.

Those are two key alternative data points the analysts really should consider before they rush off to join the lemmings jumping the cliff over iPhone sales.

iPhones are trucks

The lemmings don’t get that iPhones don’t matter any more. iPhones are going to be trucks. Just like PCs -- they’ll still be around, but the connected intelligence they provide will disappear into the background of our evolving existence within connected environments.

That’s the picture within which we should frame Apple news across the next few years. It is also why the company and its competitors will begin to explore new industries. And that future seems to me a whole lot more interesting than number-crunching AAPL stock prices, but each to their own.

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Copyright © 2016 IDG Communications, Inc.

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