Apple iPhone revenues keep on punching above their weight
It’s no secret that Apple’s iPhone has had a bumper year. The company dominated sales in Q4 of 2020, racking up the highest revenues of any smartphone manufacturer ever in a single quarter. In 2021, the company has proceeded to sell more 5G phones than any other smartphone vendor in the US, with the iPhone 12 Pro Max proving to be the most popular 5G phone in 49 US states.
According to a new report from Juniper Research, iPhone sales will account for as much as $200bn by 2022 - nearly 40% of the total smartphone hardware market.
This astonishing growth trajectory, the report predicts, will be tied to Apple’s ability to overcome the developing trend of longer purchase cycles in the industry, and successfully pull off rising model prices at a time when the average price tag for Android phones is falling quarter after quarter.
“Apple has managed to consistently convince users to purchase higher-priced models through curation of a strong hardware and software ecosystem, which other vendors have only limited opportunities to do in the current market,” notes the report.
That curated software ecosystem - and its role in driving revenues for Apple - can't be underestimated. In 2020, developers creating software for the iOS App Store grew billings and total sales by 24% to $643bn.
A heavily-saturated Android market, in which brands are increasingly struggling to differentiate their products based on features alone, is also expected to be a contributing factor for Apple’s projected growth.
Juniper Research’s analysts believe that “Android vendors will struggle to compete on a features basis in future,” explaining that premium features, such as high-end audio and advances in camera technology, “will not appeal widely enough to compete at scale in the smartphone market.”
“Feature diversification alone is not enough for lasting success in the crowded smartphone market,” commented research co-author Nick Hunt.
He added: “Apple and Samsung have succeeded in fostering brand loyalty, which smaller vendors have struggled with, despite many introducing new capabilities. These players need to pair strong features with strong branding to have sustained success.”
What’s next for a post-smartphone LG?
South Korean mega-conglomerate LG made its dramatic exit from the smartphone business at the beginning of April 2021. While the company’s weird, wacky, and kind of wonderful smartphone designs never managed to create the kind of commercial success the company was clearly after, LG’s exit from the business raises one important question: What’s next?
As a brand, LG is thoroughly baked into the fabric of Korean life. The company’s home electronics and white goods are popular overseas, but its presence in Korea is on a whole other level of ubiquitous. Every air conditioner in my 20 storey apartment building is made by LG. The corporation owns one South Korea’s three major telecom carriers, and a subsidiary of LG’s Chem division, LG Energy, is having enough success making car batteries for everyone from Tesla and General Motors to Renault that it filed for what promises to be one of the year’s biggest IPOs this week. My toothpaste is made by LG.
People who worry about LG’s exit from the smartphone business clearly don’t understand just how big this company is. All the closure of its mobile device business means is that this titanic organisation is funneling wasted resources into something more profitable.
When it announced the closure of its smartphone business in April, despite ongoing concerns about what to do with its overseas factory assets, LG said that the staff working in its mobile business would be rotated away to other areas. So, where have they gone, and what are they doing now?
Is LG’s Smartphone Division Getting Reimagined as a Software Company?
There’s a good chance that a number of LG’s smartphone division’s employees have wound up in the company’s software development arm. On Thursday, LG unveiled a new mobile app designed to improve pedestrian safety (if you had to dodge delivery drivers watching netflix on their phones while driving at 30 miles per hour down the pavement on your way to shops everyday, you’d agree with me that this is a welcome piece of news in its own right) which is just the latest development in a flurry of app-based activity at the firm.
Last week, LG also announced that FOSSLight (Free and Open Source Software Light) system, its open source software management tool, will be made available free of charge to third party developers. TechRadar also reported that, according to several LG analysts, the company is looking to “bolster its presence in the software community.”
The new pedestrian safety app, called Soft V2X, is deployed in vehicles, and can warn drivers of potential collision risks between them and nearby pedestrians by relying on ultra-fast data exchange between the app, the vehicle, and surrounding devices. Basically, if the app detects it’s getting really close to a pedestrian’s smartphone really, really fast, then it will intervene with an alert. Presumably it can pause Season One of Bridgerton to offer a polite warning to look at the road.