On January 9, 2007, Steve Jobs presented the first generation of the iPhone. Apple, the manufacturer of high-end computers that had generated in 30 years a true cult around, was fully in the pockets of millions of users.
Twelve years later, the most popular mobile device in history is still a best seller: each release is followed by millions of viewers through the internet and its news occupies the front pages of the most important media on the planet.
At first glance, everything looks like roses. However, the market began to show clear signs of shrinkage in 2018.
To depend excessively on sales of the iPhone line was a blessing and punishment for the Cupertino giant. More than 60% of their income comes from their smartphones, which helped enormously to consolidate it as the largest firm on the planet.
Global smartphone sales recorded their worst contraction last year, and the outlook for 2019 is not much more encouraging, according to market research.
Far from growing, the number of mobile phones sold worldwide decreased 4% in 2018, to a total of 1,400 million units, according to research firm IDC.
Out of a handful of high-growth countries such as India, Indonesia, South Korea and Vietnam, the rest showed no positive signs.
Even the Chinese market, which accounts for approximately 30% of smartphone sales, was especially affected with a 10% drop, according to the IDC analysis.
Strictly speaking, the industry is in the eye of a perfect storm: the economic and political uncertainty that touches many economies has been joined by a consumer public that is no longer in such a hurry to replace their devices.
This last section has an antecedent in the PC market, which for years has remained constant, even with a slight downward trend.
The technological development reached such a level that people do not find an extra motivation to make a change: if the device works and meets expectations, there is no need to replace it.
The iPhone, in this sense, is a slave to its own success. Users are usually so satisfied that it takes several years to buy a new model.
This scenario forced the company to transform itself once again: with a service segment that already represents 16% of its total business, the solution did not stop with thinking about new ideas from the hardware side.
If the users migrate towards streaming and consumption on demand, there you have to point the cannons. The strong ties generated in the entertainment industry over the years allowed him to develop a risky bet: his own online video service.
Is it a safe passage? No, but the company has achieved its best results when it entered established markets with disruptive proposals or, at least, attractive to users, who have not hesitated over the years to join as customers.
He did it with iTunes, he did it with the iPhone. And now you can do it with your own series and movies.
Two years ago, he hired two long-time executives in Hollywood, Jamie Erlicht and Zack Van Amburg and gave them $ 1 billion to develop content for Apple TV.
More recently, he dedicated time and resources to negotiate agreements with television networks and studios, with the aim of increasing the list of contents for his long-awaited service.
This March 25, Tim Cook's wishes came true: Apple TV + (Plus) will be the service that will have on its shoulders the responsibility of taking the business of the company to a new era, with all the opportunities and risks that entails
A story of iteration
To understand Apple's philosophy, we must go back to its beginnings, characterized by an entrepreneurial spirit and constant (sometimes exacerbated) creativity.
A lot of time has passed since the dawn of the 70s, when Steve Jobs and Steve Wozniak, the great couple (uneven) of Silicon Valley - a charismatic and temperamental; the other, parco, more cerebral and taciturn - will launch the first Apple computers from the garage of the first in Palo Alto, a suburb located just 30 minutes from the cosmopolitan San Francisco.
The rebellious company of the valley, with a spirit crossed by the counterculture of the tumultuous 60s and the punk spirit of the so-called invasion of '77, led along with firms such as Atari and Intel a revolution not only technological, but also cultural.
That DNA, impregnated by its founders, was diluted in the corporatist environment of the following decade, more akin to Wall Street. Jobs, who had devised disruptive products such as the Apple Lisa and the legendary Macintosh, left the company "through the back door" in the mid-1980s and Apple entered a dark age that had more mistakes than successes to its credit.
Ten years later, when he returned to the Cupertino campus to captain a ship that seemed to drift, Jobs did it with fresh ideas and a more polished concept of what he wanted his company to be. In the following years he enjoyed an unprecedented streak: success after success, from the iMac of colors to the iPod, everything seemed to have the touch of King Midas.
During that time, it also presented iTunes, its music platform that changed the relationship of forces within the record industry: with the sales of LPs and CDs in decline, the web became the main way of distributing songs throughout and width of the balloon.
The services division was a rarity in the midst of a multimillion dollar business of end-user oriented machines. To it they added, years later, divisions like the App Store (its store of apps), Apple Pay (mobile payments) or iCloud (storage in the cloud).
The new bet is risky, because it puts her in the ring against giants like her neighbor Netflix, Amazon and Hulu. All of them have years in the market, proposals for robust content and knowledge of an industry in which Apple will be a real novice.
Netflix, by case, is not a simple video app: the Oscars, in which it had a prominent presence with Rome, catapulted it to the same level as the "majors", the big Hollywood studios responsible for the most lucrative entertainment machinery of the world.
Services, the buzzword
Apple's service segment accounted for $ 37 billion in revenue in Apple's 2018 fiscal year (which ended on September 29, 2018), making it the second-largest money contributor behind the iPhone, which it accounted for 63 percent of total sales.
With Apple Music, Apple Pay, iTunes, App Store, iCloud and Apple Care, Apple's services business has become a giant in recent years, from $ 16 billion in sales in 2013 to $ 37 billion in 2018.
In the last quarter alone, this segment generated more than US $ 10.9 billion, setting records in "each geographic segment" in the process, said Tim Cook.
The CEO also revealed they are on track to double their service business from 2016 to 2020. The last quarter, per case, experienced an increase of 19 percent year on year.
This is an important figure in comparison with the other Apple business segments: services already contribute more per quarter than the Mac (US $ 7.4 billion in the last quarter), the iPad line (US $ 6.7 billion) ), or the group called "Wearables, Home, and Accessories" (US $ 7.3 billion).
In view of this scenario, the announcement of a video streaming service and, to a lesser extent, of a paid news platform, are necessary steps to consolidate a business in full expansion.
The streaming service of Apple, in that sense, could contribute greatly to increase the price of the company's shares. In a note to investors of the company, the analyst of the financial services firm Wedbush Securities, Dan Ives, assured that the platform could generate between US $ 7 billion and US $ 10 billion a year once it is in operation.
That revenue increase, along with what he called a "halo effect" that could help retain users using Apple devices and their services, should create more value for shareholders.
After reaching a maximum of US $ 227 per share in mid-2018, the giant suffered a resounding fall in these values ââin the last quarter of the year, reaching a price of "barely" $ s156.
Today, with a paper located in the order of US $ 200, the outlook is not only optimistic, but augurs new highs for the coming months.
Goldman Sachs is not so optimistic. For the firm, even if the figure of 20 million subscribers was reached, paid at a monthly rate of US $ 15 in 2020, this would represent annual revenues of US $ 3.6 billion.
It looks like an astronomical figure but it's just 1% of Apple's total sales, which were $ 265.6 billion last year.
The final decision, as always, will be in the users themselves, who may choose to continue betting on Netflix, Amazon, Hulu or one that is more attractive, or unsubscribe to move to the proposal of Tim Cook and yours .
Whatever happens, the announcement this Monday is just the kickoff of an industry that stops seeing devices as inexhaustible sources of fortune.
The wealth of the future is in monthly subscriptions, more agile, fractional and lasting, but obviously much more unpredictable, especially when the disruption is all the time around the corner.
