The Future of the iPhone

Posted by Stephen Petrey on Saturday, November 11, 2017

I came across an interesting piece from Owen Williams. It was written on just after Apple’s 2017 Keynote announcing the iPhone X and the Apple Watch Series 3 with LTE capability:

But while I was watching the event, all I could think about was that this phone might be the last smartphone to matter at all. That it marks the beginning of the end of phones as we know it, and we’re at the precipice of them just becoming tools.


What triggered this response wasn’t so much that the iPhone X was amazing — it’s that Apple figured out how to put cellular into a Watch.


Smartphones, as a category, are racing to the bottom. Each other year a trend sets the stage for what phone makers will try to cram in to help market yet another phone in various different ways.

Williams (@ow on Twitter) is a fantastic writer, developer and entrepreneur. He really got me thinking about the future of the iOS ecosystem.

Under the current paradigm, Apple’s ecosystem has three components. The Mac, iOS device(s) and (to public dismay) Entertainment Services (iTunes, Apple Music, iCloud). They mesh together well, and others have certainly taken notice. The ecosystem isn’t unique to Apple, but it laid the foundation of Apple’s stellar success as far back as the introduction of the iPod back in 2001.

Anyone who says Apple’s ecosystem isn’t working is a fool. The Services category alone brought in $7.2B dollars in revenue. The Macintosh line brings in about $5B per quarter.

That being said, iPhone revenue is insane. On average, Apple nets somewhere between $35B–$55B per quarter in the iPhone category. The real question is, is Apple willing to nose-dive their revenue pipeline and the product ecosystem by retiring their most successful product?

Probably not. It’s unclear how many Apple Watches are being sold each quarter, and furthermore we know demand is much higher for the iPhone.

What we do know is that iPad sales have cannibalized some of the Mac sales each quarter (albeit a small figure), which is a figure Apple watches closely. The iPad and Mac product relationship is undergoing a transformation. Which is probably why we will never see LTE in a Mac (a huge fucking bummer). Keeping them on separate hemispheres of innovation is critical to shifting users around.

Shifting users from iOS Power Users to Apple Watch Power Users is no easy task. So surely, there will be iPhones in the longterm foreseeable future. Make no mistake, Apple is clearly making serious moves into wearables. But I don’t think retiring iPhones will make sense. I’d love to ditch the iPhone for an Apple Watch, Mac and a pair of Air Pods. Because let’s face it — communication has changed. People make calls less now. Between texting, messaging and emails, I place maybe less than 20 calls per month.

If Apple continues to move innovations from the iPhone to the Apple Watch — one can expect the iPhone to go the way of the iPod. But I don’t that is the case. It’s more probable to say that the iPhone X may just be the last iPhone that matters.


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