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The iPhone X launch, and what Tim Cook didn’t tell you last night

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iPhones are not the real focus anymore

So the iPhone X is official, and we have bezel-free iPhones, the demise of the home button et al. Yet, in the midst of all the hype of what this 10th year offering means for the smartphone segment, there is one absolute truth that is largely being shielded away.

iPhones are not the real focus anymore

So the iPhone X is official, and we have bezel-free iPhones, the demise of the home button et al. Yet, in the midst of all the hype of what this 10th year offering means for the smartphone segment, there is one absolute truth that is largely being shielded away.

iPhones can’t be the bedrock of Apple for much longer.

To validate that, look back at Apple’s declared 2017 Quarter 3 results, and you realise that iPhone sales have mostly remained flat from the same time the year prior.  Ditto for iPads and Macs, while the Apple Watch and Apple TV, while growing, are too minor in numbers to matter. In other words, the hardware manufacturer aspect of the brand is slowing down revenue-wise. Counterpoint’s Market Pulse report for July 2017 mentioned that Huawei has in fact surpassed Apple in global smartphone sales to take the second spot globally.

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What does matter, if one is to again go back to Apple’s fiscal Q3 earnings, is how positive its services business is.  Apple's Services business includes the App Store, iTunes, Apple Music, iCloud, Apple Pay, and more. Revenue across Apple's Services business was $7.3 billion for the last quarter. Given how critical Apple’s ability to generate revenue outside of iPhone sales is to its future bottom line, the company is expanding existing platforms such as its app ecosystem, creating the iMessage App Store for mini apps launched within the iMessage interface, as well as pushing further into areas like healthcare through its ancillary products, such as the Apple Watch.

Take Augmented Reality, for instance. Macquarie Research analysts Benjamin Schachter and Ed Alter said they expect Apple's latest innovations in AR to increase revenues across Apple's Services business. When Apple releases iOS 11 on the 19th of September, the operating system will become the largest AR platform in the world overnight, with many programmers already building AR apps for iOS 11.

Overall, it will be interesting to see how Apple balances investor expectations with the constant innovation needs of being a hardware company. 

Anil George
Avid follower of all things tech. In between his quest for the ultimate gizmo, Anil fiddles with light meters, collects rare books and feeds his fetish for Jap horror movies. As Managing Editor of T3 Middle East for the GCC, Anil oversees content direction across print and digital. He was a CES 2017 Innovation Awards Judge, reprising his role as an Innovation Awards Judge at CES 2015 and 2016. Reach him at: editor@t3me.com.
@anildotgeorge