Since releasing the first iPhone back in 2007 Apple has risen not only to the top of the tech industry, but to become the biggest listed company on the planet.
In doing so, it has faced down the challenges of many new pretenders to its crown, retaining its place as the critical, market and consumer leader for smartphone technology. Now, Apple looks like it will have a whole new set of manufacturers vying for its crown, as the mobile industry shifts and changes from the current status quo.
The Incredible Rise That Paved the Way Ahead
In order to examine where it might be headed, it’s useful to take a look at where Apple has come from. When Apple released its first iteration of the iPhone in June 2007, it was already something of a phenomenon in the global market. A remarkable three years had seen the company report growth of over 600%, capitalising on the success of the iPod and general economic boom time.
Despite suffering in the next few years thanks to the onset of the global economic crash and overall slowdown of growth, Apple has once again been on the rise since 2009, and is currently valued over 700% higher than it was five and a half years ago. That period has seen it overtake and then pull away from Exxon Mobile as the most valuable listed company in the world, break into the top 5 of the Fortune 500, and take the spot of most valuable global brand according to InterBrand.
Recently, the growth has shown no signs of slowing, and 2014 has been a remarkable year for Apple. Which is more than can be said for its traditional competitors.
The Closest Competitor Has Fallen Through
Like Apple, Samsung has been a strong market performer since 2009, going on a four year run that peaked with gains of over 200% at the beginning of 2013. That was driven largely by the success of the Galaxy and Note series of flagship, high end smartphones that dominated the increasingly ubiquitous Android market.
Since then though, Samsung has hit harder times. In 2013, its share price dropped 15%. From January 1 to October 28 this year it fell a further 20%. That nadir came after Samsung revealed that its Q3 profit was likely to come in around 60% lower than last year, the culmination of months of declining interest in Samsung’s handsets.
Others are On Fast Decline
And it’s not just Samsung that’s feeling the heat. Other major manufacturers are also suffering: HTC’s revenues and share price are both down for the year, Sony’s mobile division has seen a write down and a new chief after losing over £1 billion, LG are worth around 6% less than in January.
The problem is a lack of real innovation in top line smartphones, combined with an influx of cheaper manufacturers that can deliver the same technology as the market leaders at far less cost. The much-marketed One plus One opened pre-orders last month, offering similar specs to a Samsung Galaxy S5 but at less than half the cost.
Cheaper Stuffs Are Not Necessarily the Best Ones
In Asia, Huawei and Xiaomi are on the march. Xiaomi sells handsets that appeal to iPhone enthusiasts, but at a lower cost. They are able to do this by keeping one model in circulation for longer than other companies, relying on cheaper manufacturing over time to offset the lack of margin on handsets at release.
This, then, may well be the toughest period that the smartphone industry has faced in quite some time. So far, the huge popularity of the iPhone 6 and 6+ has allowed Apple to maintain growth even as its long-standing rivals falter. Apple Pay has also given a measure of hope for the future. Other innovations, though, are more of a mixed bag: iPad sales are disappointing and wearable tech is so far yet to capture public imagination.
Innovation Is the only Way Forward
Apple has faced down many competitors over many years, and demonstrated an ability to innovate ahead of technology trends time and time again. Over the next few years, it seems, it may have to repeat the feat one more time.
To lead the imagination of ever-demanding people, you have to innovate -and not simply steal. By showing the rest that unique creation is passionately liked by people from all walks of life even though it may be far more costly than any other similar ones, Apple has proved time and again that “Innovation is the only Way Forward“.
Unless and until others bite this bullet called cutting-edge technology, they will continue to struggle for revival.
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