The iPhone could eventually lose its place as our primary digital hub
When Apple released the iPhone in 2007, and the App Store followed in 2008, our lives were quickly transformed to focus on the supercomputers in our pockets. Now, Apple's biggest cash cow may be fading, according to one analyst.
Neil Cybart, the founder of Above Avalon, sat down with Steve Milunovich, an analyst at UBS, for a Q&A after Apple's big iPhone X event earlier this month. Cybart said that one of the biggest announcements at the event was not the newest iPhone, but the cellular data connection in the next generation of Apple Watch. He said the cellular connection is evidence that we are moving away from the iPhone as the most important device in our digital lives.
"I think eventually all smartwatches are going to have some sort of cellular connection. You're going to want the ability to always be connected and not worry if you're connected to an iPhone or a Wi-Fi network. I think eventually you'll get to the point where the Apple Watch is completely independent from the iPhone," Cybart told UBS. "It also starts a trend where the iPhone starts to evolve... I don't see the iPhone remaining as some sort of hub in our digital or tech life."
Cybart said that he sees smartphones going the way of the TV. Most consumers will still own one, but the emphasis will move away from it. Televisions are seen more as accessories these days, a place to watch mobile content on a larger screen when it's convenient. Cybart says that a lot of people are perfectly happy watching content on their phones and iPads, even when they are in the living room with their TVs.
The newest Apple Watch won't have what it takes for people to leave their smartphones at home for good, but it starts that trend. For a quick trip to the grocery store, or a morning run, a watch will be the perfect companion. It will keep you connected enough for emergencies, and allow enough access to your streaming music and audio podcasts to pass the time.
Smart glasses or contact lenses are often touted as the smartphone killers of the future, especially as augmented reality technology starts to develop and become mainstream. Cybart thinks this will happen eventually, but first, the consumer will have to become educated about what AR can do, and how best to use it.
If Cybart is right, the iPhone X is the first move toward an iPhone-less future. Apple has said it wants to increase its services revenue substantially, which shows the company trying to diversify its money-making schemes. If the iPhone does become more of a second (or third) screen for consuming content and communicating, at least Apple will have other methods of making money.
The key differentiator for Apple in the future, regardless of how many iPhones they are selling, is their design, Cybart says. Apple is falling behind its rivals like Google and Facebook when it comes to their technology, but that's perfectly acceptable because it's a design company, not a tech company, Cybart said.
"[Apple's] power is found with the industrial designers. I think they are the ones who control product strategy. Even Apple's PR stresses this design focus because they know that's what sets them apart. They know that that is something very difficult for competitors to match on," Cybart said.
Apple is up 36.67% this year, and has been slipping since it's September 12 iPhone X event.
