Why Apple iPhone X growth wave is so weak

The iPhone X growth wave is weak. Apple growth is slowing. All investors care about is growth. So, can Apple recover and start their next growth wave?

iPhone X hypnosis
Apple / Thinkstock

Many users say they have reached the point where they are no longer trading in their iPhone every year just to get the newest version. There are several reasons for this. One was thanks to a marketing and design mistakes Apple made with the iPhone X. Let’s take a closer look at the various issues that keep nagging at Apple and if they can start another growth wave.

I always look at companies to see whether they are on the growth side or the falling side of the growth wave. In the case of Apple, they have been on the growing side for the last decade. They are now one of the largest and most powerful, global companies.

Apple iPhone growth wave slowing down

However, the most important device they sell is the iPhone and it’s growth wave seems to be cresting. Is this going to remain a problem or will Apple snap out of it and back into a new growth cycle?

It’s important to remember that this is not the only time Apple has seen a softening of iPhone sales. They have experienced it a few times over the last decade since the iPhone was first introduced. Each time Apple did something to rev up sales. Remember when Apple redesigned the look of the user interface hoping to have lightning strike and re-ignite sales to previous levels.

This iPhone slowdown is only impacting some Apple customers. Not all of them. Many users continue to buy a new iPhone year after year. Many of them are early adopters. They want to have the newest device, even though it doesn’t really offer much new user technology except maybe a better camera. They just like being on the cutting edge.

Users still love their iPhone, they just are not trading up as quickly

However, a growing segment of the Apple customer base is hanging onto their iPhone longer than ever. The reason is simply because the new devices are not much different than the device they carry today. Without loads of new technology to capture their attention on the iPhone 8, and with the iPhone X at a much higher price tag, many users are sitting out this upgrade.

So, on one hand users still love their iPhone. However, on the other hand this doesn’t do much for Apple, which needs to sell more devices year after years. This is the problem every successful company eventually reaches. No single growth wave lasts forever.

Today, Apple is still a healthy growth company. They just are not growing as fast as they have been. While this is fine for any company, it’s not fine for the investor, which is the owner of Apple.

Apple not growing as quickly as before

Investors are not customers or users. Investors are only interested in one thing, making money. In order for them to make money, Apple has to be worth more this year than last year. And since they are not selling iPhones as fast as they have in the past, this is trouble for Apple since their investor may think about leaving for a faster growing company.

Creating and riding the growth wave for as long as possible is one of the big challenges for any CEO. However, every growth wave has a lifespan. They don’t last forever. So, every company must come up with the next growth wave, over and over again.

Companies that do not, suffer. Think of similar companies like Motorola, Nokia and Blackberry. These companies lead the space until they didn’t come up with the next growth wave and quickly dropped to the bottom of the list. This is the problem every successful company has… creating the next growth wave to stay successful.

Apple has tried, but has not yet successfully created the next growth wave

Apple has tried to create the next growth wave many times over the last decade. Each of these devices have carved out a smaller slice for the company, but the iPhone is still the cash cow. That’s fine as long as they can create the next growth wave. Something they have not really been able to do.

Home Pod is the next try for Apple. Will this be a hit? Everything I read about this device is good, but not great. Nothing transformational. And Siri AI is stumbling in the marketplace. It has a long way to go to catch up to Amazon Alexa and Google Home.

So far, I see nothing on the horizon that will accelerate or replace the iPhone as the key Apple product. And without giving the customer a reason to run out and buy the next iPhone, I am afraid Apple will not accelerate their growth.

Don’t get me wrong, Apple is still a huge company with loads of happy customers. I like the company and the management. And they are not going to disappear overnight. However, if their growth wave continues to slow, it gives competitors, new and old an opportunity to capture the number one spot in the hearts of users. Not something that is on the horizon, but then again, we never thought Motorola, Nokia and Blackberry would tank overnight either.

The writing is on the wall. The clock is ticking. Apple must come up with the next growth wave. Just saying.

Copyright © 2018 IDG Communications, Inc.

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