Apple is getting ready for Peak iPhone

The always interesting Neil Cybart says the new peak-iPhone “can best be characterized as status quo”. By measuring the iPhone units sold as a TTM one can clearly see the new normal for the iPhone. Although he remains upbeat, he seems some risks. Go read it.

But more importantly he remarks some points, two of which I find interesting.

(1) India isn't the next China. Which is obvious to anyone watching the market.

(2) Apple is running out of Android switchers.

  • I argue this trend can even be reversed. There has never been a better time to be on Android if you can afford a ~$1000 phone.

  • The Google Pixel 2 XL and the Galaxy Note 8 have been gathering praise that normally was reserved for the iPhone, and making people doubt themselves. The iPhone is no longer the “hands down best smartphone” (for the OS agnostic-people).

  • The Galaxy S9 will leap ahead the iPhone X in camera quality most probably with variable aperture.

So Apple is enlarging their moat:

  • By releasing more and more iPhone-only accesories (AirPods, HomePod, Apple Watch) and services (Photos, iCloud) you hinder some existing customers willingness to jump ship.

  • After ten years and with a mature OS, people are more reluctant to change.

  • So Services revenue will keep growing steadily, iPhone average selling price will keep getting fatter and stockholders will be happy. Specially this guy: “Buffett's Apple stake, which he began building in 2016, was valued at roughly $27.7 billion”.


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