On a revenue basis, Apple's wearables business is now at an annual interest rate of $ 16 billion, increasing by 55% to 60%. At today's pace, portable classes both iPad and Mac will be nearing the end of 2020 to become the third largest product category behind iPhone and services when we look at revenue.
The Wearables Train
One way of thinking about Apple's wearables business is that it is a train that is gaining momentum. Competitors face declining odds of being able to stop the train.
Apple wearables trains are enhanced by three elements that no other company has the luxury of using or utilizing:
A massive installed base of iPhone users (925M globally).
Core competence and a company culture built on make technology more personal, intuitive and easy to use.
A flourishing platform of several products that can be carried.
Apple leverages its ecosystem of users and devices to provide the notebook with an ideal launch pad for success. While there are a handful of companies with more than one billion users, no other company has an ecosystem of one billion users and nearly 1
Design, or the lack thereof, proves to be another high barrier for many companies to come across in terms of portability. Silicon Valley continues to focus too much on technology and not enough on design, or how we actually use technology. Google's inability in terms of portable parts is partly due to the fact that the company has no idea how to get people to use portable devices. Management thought consumers would want to use Pixel earbuds because the devices had real-time translation. In reality, consumers do not want to be seen in public with wireless headphones that do not reflect ambition and coolness. A proper understanding of how to play in the luxury and fashion realms while appealing to the mass market is difficult.
Flying Under the Radar
When considering why Apple's laptop business has received so little attention to date, one need look no further than the iPhone. Concerned about trying to find a single product that can replace the iPhone, it made it difficult for many to see how a platform of portable devices is the answer to what may ultimately serve as a viable iPhone option.
A mobile Apple Watch paired with AirPods is already capable of handling a number of tasks currently assigned to the iPhone. Add a few smart glasses to the mix, and mobile devices like the iPhone and iPad stand to lose even more uses.
It doesn't help that new Apple products are also graded on a curve next to the iPhone. If a new product can't move Apple's financial meter out of the gate, the product is viewed as a flop, toy, or just iPhone accessory.
For competitors, the bad news is that there is evidence that Apple still uses some breaks in the portable train. In some ways, Apple is holding things back. An iPhone is still required to set up an Apple Watch. A truly independent Apple Watch that does not require an iPhone will expand the device's addressable market by three times overnight.
In addition, Apple currently offers only portable devices for two body properties: our wrists and ears. A compelling argument can be made that the most prized piece of portable property, our eyes, remains untapped.
We are witnessing wearables initiating a paradigm shift in how we use and interact with technology. Apple deserves more honor for not only choosing to ride the wave, but also playing a crucial role in getting portable ribbons off the ground.
Apple is well on its way to installing Apple Watch and AirPod bases of 100 million people each. The company is more than halfway there with Apple Watch and is fast approaching the same level with AirPods despite the product being sold for half the time.
Apple is also in the midst of a major investment phase to expand its portable platform. It is an opportunity to bring more benefit, in addition to clearer vision, to the eyes in the form of smart glasses. Such a product would be a precursor to a pair of AR glasses.
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