There was an interesting Sunday Times article yesterday about the new iPhone yesterday that got me thinking that maybe for Apple the only way is down.
I say that despite the fact that last week they passed the 100m mark in iPod sales and that they have gone from $5bn revenues in 2001 to a forecast £23bn this year (half of that will be from iPods).
To me the music player business is not an attractive one, the hardware is a commodity and my bet would be that Apple will struggle to sustain their dominance over the next couple of years. We have seen this play out on the PC and if anything it should happen faster with MP3 players. At the high end Apple faces competition from Samsung, Zen and other Asia Pac manufacturers and at the low end people will increasingly use their mobile phones as music players (conveniently subsidised by mobile operators). Last week’s announcement that the Leopard release of MacOS will be delayed by four months because the company is focusing on the iPhone is a recognition of the threat from this quarter.
I think that iTunes is a bit of a sideshow to the main game of device sales, but in that area too Apple faces its challenges. These come from Nokia post the LoudEye acquisition, from Microsoft and in the courts from various European governments who take offence to the tight coupling between iTunes and iPods.
So if I was an Apple exec I would be thinking life will be tough going forward and the point of comparison is an out of this world performance over the last five years. Apple has a fantastic (and I mean fantastic) brand and top spot is theirs to lose, but great history and tough future is not a great combination for people working at Apple.
(Disclosure: I am not an Apple man. My dirty little secret is that I have PC religion – I hate getting locked in to closed platforms.)