Above Avalon: Apple Is in a League of Its Own

During Apple’s “Peek Performance” event held last month, the company announced not only a brand new Mac category with the Mac Studio, but also iPhone SE and iPad Air updates that will be well-received in the marketplace. Management fit so much into its 57-minute event, Apple’s entry into live sports was given just 65 seconds.

The primary takeaway from Apple’s event wasn’t found with any particular product. Instead, it was the sheer breadth of product unveilings that caught my attention. Over the past 18 months, Apple has held seven jam-packed product unveilings that have included a collection of new hardware, software, and services. Apple’s peers would be thrilled to hold just one of these presentations every year or two. There is no other company in the same league as Apple when it comes to maintaining and updating such a wide and comprehensive ecosystem of devices and services. The pace of Apple’s new product unveilings has played a role in the company pulling away from the competition.

Ecosystem Strength

It's easy to look at Apple’s quarterly earnings and reach conclusions about the company’s ecosystem strength. Apple’s financials, although strong, don’t tell the full story. With nearly 80% of Apple’s revenue attributable to hardware, the company’s financials remain heavily influenced by upgrading trends. Revenue, operating income, and cash flow metrics undersell how Apple is performing in the marketplace from a new user perspective.

The following new user estimates are obtained by combining Apple management commentary with my own product unit sales assumptions: 

To get to the heart of what Apple is doing and how the company is executing so well, we have to go back to 2017 and 2018. Apple began to follow a new strategy that amounted to pushing all of its product category forward at the same time. Previously, Apple had been following a product strategy that can be thought of as a pull system. The company was most aggressive with the products capable of making technology more relevant and personal.

One way of conceptualizing this strategy is to think of Apple product categories being attached to a rope in order of which makes technology more personal via new workflows and processes for getting work done. As Apple management pulled on the rope, the Apple Watch and iPhone received much of the attention while the Mac increasingly resembled dead weight. Similarly, the iPad had hit a rough patch.

from Hacker News https://ift.tt/Dne5Yoi