2006 – 2007 was a strange period in the world of mobile phones: Mobile technology was still slightly lagging behind what I would class as the consumer demand back then: For example if you wanted a cool phone to look at, you got the Motorola Razor, whilst if you wanted to email work colleagues you had a Blackberry and if you wanted to play games you got the Nokia N-Gage. At the time there wasn’t any phone that combined all three not to mention hardly any phones had a respectable music function. In late 2007 a new contender came into the market- the first iPhone: I am completely confident when I say that this product was an absolute game changer- the change in design & functionality was remarkably visionary and a true testament to the concept Steve Jobs had and ultimately, completely fulfilled. Since then all mobile manufacturers were playing catch up: and it’s not hard to see why: the first iPhone welcomed in a number of features, which were not only industry leading but also worked very well. To name a few: touch screen application, accelerometer/ gyroscope function, music playback function, games, fantastic app and an integrated high megapixel camera. Not only this, but the product also looked great and was so simple to use everybody could use all of its functions as intended: this last part, in my opinion, was huge as up until that point, complicated menu systems in previous mobile phones, such as getting the email client to work, for example, was problematic to say the least.

Fast forward to 2017 and the picture looks entirely different: Nothing can take away the success of Apple’s flagship product, by and large it made a large proportion of its €261 billion cash pile due to iPhone sales: However, gone is the time where we have a product that was so far ahead of the competition and I would even to dare to say now, the features aren’t even market-leading anymore. At present, I think we have come to a point in mobile phone innovation I class as ‘peak phone’. Whereas before the issue of a new iPhone model would usher in new exciting features, at the moment I think we are going through a transitional period of marginal gains- where progress is measured in millimetres, not metres. Why is this important? As alluded to previously, iPhone sales accounted for 60% of Apple revenue for 2016, at the moment is not difficult to find a great phone, but it is difficult to find a bad phone. How long before consumers see the plethora of fantastically spec phones and decide to upgrade to a Samsung or HTC instead of iPhone? It’s far too soon to call the demise of the iPhone, but possibly the smartphone growth bubble that we have seen since 2007 is coming to an end. Could this affect overall Apple profitability?

Jordan Hiscott, Chief Trader

Disclaimer

The views and content expressed above are the views of the author and do not reflect the views of ayondo markets. This service is for information only and should not be interpreted as investment advice or any recommendation to enter into a financial transaction.

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