When it comes to thinking about Apple's growth drivers to perform in the coming quarters, it's important to consider the wider environment against each driver. At the same time, it is necessary to look at Apple's product strategy to weigh the impact of new products and price decisions.
iPhone. Apple's three revenue growth drivers stand the iPhone against most headwinds. While Apple can still grow its iPhone revenue with a modest sales volume, the company is likely to see less of a revenue increase from major iPhone ASP wins. It will be difficult for Apple to increase the iPhone ASP with another $ 1
Apple is expected to uncover three new flagship iPhones (6.5-inch OLED, 5.8-inch OLED and 6.1-inch LCD) next month. Although we assume that the 6.5 inch OLED is priced higher than iPhone X, the model probably does not have as much impact on iPhone ASP as iPhone X, given a smaller proportion of total iPhone sales. Instead, most iPhone sales will be found with 6.1-inch LCD and 5.8-inch OLED iPhones. These models will probably be priced similar to this year's flagship iPhones, which makes it so much harder for Apple to see another step up in the iPhone ASP.
Services. There are a number of factors that support continued robust revenue trends for Apple Services in 2019. Apple Services will benefit from continued growth in iPhone-based base. At the same time, major industries such as video subscription services will be more popular in order to earn Apple Services revenue in some ways. In addition to earning a share of revenue through third party video subscriptions, Apple is expected to expand its own paid video streaming service by 2019. Additional services for services are found with higher license fees from third parties, more AppleCare revenue, and a larger number of iCloud subscriptions . In a scenario where iPhone sales growth is falling, it is reasonable to expect Services to represent a greater share of Apple's revenue growth in 2019.
Wearables. Apple's wearables segment will probably serve as an Apple growth engine for years. The days of Apple wearables are considered as an income footnote over. Over the past 12 months, Apple sold over $ 10 billion of wearables (Apple Watch, AirPods and Beats Headphones). Provided Apple is able to maintain at least 30% to 40% unit revenue growth over the next few years, Apple's portable platform will reach $ 20 billion of annual revenue within three years. Given the relatively low adoption rates for Apple Watch and AirPods in Apple's user base, many potential users have gone beyond sales growth. In the long run, Apple will probably expand the wearables platform to include new form factors and product categories. This development will provide even more growth potential to the segment.
On the last two quarterly revenues of the conference, Tim Cook has talked about the smartphone market being one of the best for a company like Apple in the history of the world. There are not so many markets that can support 215M + annual unit sales at an average selling price of over $ 750. Reading between the lines, and Cook's confidence signaled Apple's belief that nothing would interfere with smartphones as the most valuable computer in our lives in the short term. Cook's response to an analyst's question about home technology did not mean, for example, that Apple's management was worried about desktop smart speakers.
Much of Cook's optimism about smartphones is supported by Apple's latest economic trends, as sales growth is driven primarily by iPhone, with services and wearables serving in more supportive roles.
However, this does not mean that Apple is wagering on iPhone in the long run. In fact, in the next few quarters, it is reasonable to expect that iPhone will be less of an Apple growth driver, with the focus focusing on digital content distribution and wear as Apple's primary growth engines.
Apple continues to invest in new products that have the potential to gradually function as iPhone alternatives (not replacements). In essence, Apple will be the one that interferes with the iPhone. These iPhone options, which may be powered or supported by iPhone out of the port, will initially be considered as rudimentary or even playing. However, these products will be on the road to independence from the iPhone. Apple Watch is a good example of such a product. Apple Glasses has the potential to become an even bigger catalyst for growth.
At the same time, we see that Apple is trusted to provide services focusing on the distribution of digital content and value creation to hardware used by a billion users. As the average number of Apple products per user increases, thanks to wearables, these services will prove to be important in delivering custom and proactive solutions to the Apple community. This strategy will provide Apple with growth opportunities and pave the way for Apple's possible entry into the transport industry.
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