April 1st 2016 is Apple’s 40th Birthday this week
Apple’s future potential and challenges in the era of Internet of Things IoT
Children of the Post PC era
Apple founded on April 1st 1976 in a home garage in Los Altos, California has survived into its fifth decade through several transformations that have seen it become the world’s most value company of 610 Billion US Dollars. Even compared to its revivals such as Google and its recent transformation into Alphabet reportedly pushing past this, these are the lofty heights of an exclusive club of super companies that have define modern consumer electronics and whole industry categories.
What perhaps are stand out features of Apple’s rise to success apart from the leadership of Steve Jobs has been the ability to convert ideas into designs that have redefined consumer products. It is astonishing that the iPhone only arrive in 2007 but in less than a decade has led to redefine, music, mobile computing and consumer telecommunications devices.
Apple’s origins in the Personal Computer PC market, the famous Apple Mackintosh of 1984 introduced the world’s first Graphical User Interface and mouse. This was followed by the iPod and iTunes in 2003 defining consumer music and the iPhone and Apps Store between 2007 and 2008 a tour de force introducing touch screen modular downloadable subscription software and mobility into everyday lifestyles. The iPad in 2010 and an evolution of the iTunes into Apple music streaming in 2015 has pushed further into these existing new markets and the Apple Watch wearables new category in the same year.
Law of diminishing numbers growth will hit Apple 2016-17 ?
The PC era that transitioned into the new mobile computing market is now seeing a shift to the “Internet of things” in the latter half of this decade and ushering in a new era of connected systems. Looking back this has been a rapid evolution of the internet born in the 1990’s into a global web phenomenon that companies like Apple understood better and faster than others in what it meant to be mobile and connected to services. But what is the future for Apple if the PC era has moved on into the cloud and mobile era and now the IoT ecosystem of “everything connected as a service”? Customer experience and enterprise systems have become increasingly blurred as consumerization of mobile and cloud as seen with the successes of the Amazon cloud has dominated both markets. Apple has built a solid control over the Mobile and personal computing market premium brand but as with the latest releases of the iPhone SE and the iPad Pro these are really just the same categories. The law of diminishing growth will hit when a market matures and runs out of geography and customers and further variations of the same product become just replacement sales. 2015 was the greatest sales growth in Apple’s history but will this continue as the phone and table and PC markets become mature. What next is a constant topic for investors in the market for Apple for continuing the growth of its categories.
Apple in the Internet of things IoT Era?
The technology market is a fickle and fluid world, new devices and solutions can often come from new directions that disrupt products and services. While the PC and mobile market has become a connected cloud of content and apps, this design has now shifted into “connected objects and things” from home appliances, connected cars to connected lifestyles that are working across and up and down across industries. The term Internet of things is growing into a possible definition of “what is coming next” that seeks to connect numbers of 50 billion objects or more into a new era of intelligence context sensitive devices and services.
The term IoT can be traced back to the late 1990’s from companies using RFID tags such as Proctor & Gamble to collect real time data about products and logistics. By 2014 this had become main stream with the realization of movement, temperature, location to human health data and many other types of data points now readily available in smart phones and starting to be used in connected devices, rooms, building, contactless payments to wearables. Adding to this the rise of machine learning and Artificial Intelligence has further created new experiences and capabilities from speech and voice recognition to algorithms for stock trading to online purchasing recommendations and the highly public wins of IBM Watson in Jeopardy and Google AlphaGo recently.
The challenges for Apple and many others are to understand this “flattening out” of multiple connected things. While Apple has been able to build a “walled garden” of connected mobile devices, is this pattern that will survive I the next IoT AI era?
Challenges and growth opportunities
Apple has recognized the need to build out from their home ground of mobile platforms, in 2011 introducing the iCloud and Siri voice recognition as need types of extensions into connected cloud services across device platforms and interactive voice experience. But looking at the Apple TV and Apple Watch which are potentially the next successors platforms for IoT “connected Hubs” that manage many devices this has proven less impactful for Apple.
Apple have introduced Home kit and Health kits development kits for discovering, integrating and communicating with device for home and health appliances for Apple devices of Apple TV, Apple Watch and iPhone. Apple CarPlay has done a similar move into the connected car market to establish a transport platform. But these things remain underdeveloped as the market appears early and not mainstream.
Apple’s success has been based on redefining existing products, but when it comes to new technology markets it has little to no track record. Even its reported move into driverless cars or possible other “moon shots” the question is can it create the critical mass of a new category of connected computing.
Looking at Siri compared to Microsoft Cortana and Amazon’s Alexa or Googles own voice recognition this seems still underdeveloped though the Amazon Echo-Alex platform just launched is becoming a possible new leader in connected home and voice recognition.
In other areas of the Watch and TV this surely are the major areas of Apple dominance but today no radical compositions of new technologies into a kind of chimera “Wow factor” product has arrived.
The expectation on Apple is sky high with its past record, the question is can it deliver. Even with the enormous funds chest of 160 Billion US Dollars that is higher than many small countries GDP is no substitute for creativity and genius. I for one think the market is at another inflexion point and that Apple will be at the vanguard but having your own “wall garden” may not be enough when consumers and enterprise want a multiple-connected experience.
Prof. Mark Skilton
30 March 2016