In the latest edition of Bloomberg’s Power On newsletter, tech expert Mark Gurman candidly points out that Apple is paying the price for its conservatism. iPhone sales have dipped below their 2023 peak, while Apple Watch revenue plummeted by 14% in the past year. Although these numbers are still significantly higher than the rest of the market, Apple’s “drip-feed upgrade strategy” seems to be losing its magic.
In fact, Apple is partly creating its own challenges. Since the release of the groundbreaking iPhone X in 2017, the company has played it safe with cautious iterations rather than truly innovative designs. The lackluster launch of the Vision Pro augmented reality glasses further illustrates this hesitancy. Users are now holding on to their devices longer, and standout features like Apple Intelligence, larger batteries, and minor camera improvements are often slow to market and limited in availability, diminishing their appeal from the start.
Apple has played it safe with iterations since the iPhone X. Image: Ars Technica
However, the biggest pressure may be coming from external forces. In the Chinese market, foldable phones are growing at three times the rate of regular smartphones. Huawei, Xiaomi, and Honor are seizing this opportunity with second-generation devices featuring flexible hinges and significantly brighter screens, making inroads into Europe and Southeast Asia. In contrast, the recently released iPhone 16 offers little differentiation from its predecessors. Coupled with the impending new US tariff policies, Apple’s once-comfortable profit margins are shrinking.
The AI boom also poses an unpredictable threat. For the first time in 22 years, Google searches on Apple devices are down as users turn to chatbots like ChatGPT and Perplexity. This directly threatens Apple’s approximate $20 billion annual revenue from search licensing, a critical pillar in their services strategy, and demonstrates how quickly a new interface can shift the landscape.
Apple is struggling to keep up with the AI boom. Image: Tom’s Guide
During a recent antitrust hearing, Eddy Cue, Apple’s services chief, issued a notable warning: “In 10 years, you might not need an iPhone.” Gurman believes this is not just a courtroom tactic but a genuine concern within Apple.
Currently, Apple doesn’t have clear answers to the foldable phone trend, has been conservative with Siri upgrades, and truly groundbreaking products like smart glasses or household robots are still two to three years away. Gurman concludes forcefully: if Apple’s creative engine doesn’t break free from its inertia soon, nimbler competitors will easily seize the lead in the next wave of technology. I wholeheartedly agree with this assessment, and I’m sure many loyal Apple users share this sentiment.
According to Bloomberg
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