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What Happens When iPhones Are a Utility Rather than Cutting Edge Products?

With this week’s Apple Event — the glitzy, fascinating announcement of new and upgraded products, such as the new iPhone 11 Pro — the company once again captured the attention of anyone who loves the excitement and functionality of new tech.

But will Apple capture our wallets?

For the As the New York Times states: “Apple’s product launches have long been full of surprises, but rarely has a price cut been among them. On Tuesday, in a sign that Apple is paying attention to consumers who aren’t racing to buy more expensive phones, the company said the iPhone 11, its entry-level phone, would start at $700, compared with $750 for the comparable model last year.”

Moreover, earlier this year the stock market was shaken when Apple’s chief executive officer Tim Cook announced that sales of the company’s earlier round of iPhones were not as strong as expected. The news affected not only Apple’s revenue projections, but also caused a $75 billion drop in the company’s market value as the stock price slid.

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The technology news was particularly striking as the business leadership had achieved a record stock market valuation of $1 trillion just several months ago.

Slowing Sales in China a Major Reason for Slump?

Cook cited slowing iPhone sales in China, due to several factors, including the sluggish Chinese economy, trade war tensions with the U.S., and market erosion due to consumers choosing lower-cost smartphones in China. Given that China has historically been a strong growth market for Apple, the effect was significant.

Yet as many observers noted, the iPhone is also a victim of its own spectacular success. It became a genuine must-have consumer item, for everyone from grandparents to preteens.

The introduction of a computer in your pocket – one that took pictures, allowed you to surf the web and send email, took over from a stand-alone telephone, played music, and soon had tons of apps to do even more – created a genuine revolution for consumers. It changed entire industries, such as retail and banking, because consumers could do business while sitting on a sofa rather than entering a bricks-and-mortar building.

Yet a revolutionary item creates the conditions for its own decline, in some ways. Competitors leap into the fray, and soon iPhones had stiff competition in cheaper Android models.

Perhaps even more significantly, the must-have product soon becomes something that everyone does indeed have. Sales start to slow, simply because consumers feel less need to upgrade, especially as upgrades themselves become more sizzle than steak.

That’s not to say the iPhone is dead. Sales increased $100 million worldwide in the past year. But smartphones are now more of a utility, widely saturated through the population, than a product viewed as excitingly innovative.

With this week's Apple Event, the company once again captured the attention of anyone who loves the excitement and functionality of new tech. But will Apple capture our wallets?

…but the more crucial culprit may be the popularity of smartphones in general.

Will Voice Activation Drive New Innovation Leaders?

Will any product replace the iPhone as the cutting-edge product of the decade? Some observers believe that voice-activated assistants such as Amazon’s Echo and Google’s Home will be the next revolutionary product, using voice and artificial intelligence (AI).

Sales are certainly strong. Slate notes that Echo increased 64% in 2018 from 2017 levels, while Google Home sales reportedly jumped 420% in the year.

Multiple products with voice commands from Siri or Alexa have been sold as well, including Apple’s Watch and AirPods, which utilize Siri voice commands. Sales climbed 50% for both in the 2018 holiday season.

While voice-activated devices do have the potential to change some fields – voice commands may lead to less computer use, for example – they may not have the same revolutionary impact that the iPhone did. Many uses simply replace keystrokes or web surfing with voice commands – an innovative change, to be sure, but not a 360-degree difference in the way that iPhones and computers took over from cameras and stereo systems, say.

Still, the growing popularity of voice-activated devices may lead to more innovative products to come, in 2020 and beyond.