Geekzone: technology news, blogs, forums
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.
What is wrong with Apple?
Posted on 1-Feb-2016 20:36 by Howard Yu, Professor at IMD business school. | Tags Filed under: Articles.

To industry pundits and casual observers, it came as a shock this week when Apple projected that growth for its iPhone sales would hit the slowest pace since 2007, the year of the iconic phone’s release. At the same time came the first forecasted decline in Apple’s revenue in the last 13 years. Currency fluctuation and the cooling of China’s economy notwithstanding, Apple’s predicament is a reflection of tough times across the board in the mobile phone industry.  


Back in 2011, a Beijing startup mobile phone maker named Xiaomi, developed a social media platform to engage millions of Chinese, turning young consumers into casual programmers to enhance its mobile phone’s operating system. In less than four years, Xiaomi saw its revenues soar, surpassing Samsung and Apple’s market share in China; it became the country’s largest mobile phone maker, and the world’s third. 


Yet in 2015, Xiaomi’s short lived glory was snatched up by Huawei—another telecom giant in China which historically billed itself as a low-cost provider. Why so much turbulence in the mobile space? Two underlying forces, modularity and digitalization, have been the main cause; and they are, it turns out, also affecting other sectors.  




Ever since Western companies began outsourcing manufacturing to Asia in search of low wages, engineers have been devising clever ways to standardize components. From microprocessors and memory chips to LCD panels, components have become interchangeable and have been for the most part made in the Far East (South Korea, Taiwan, and Singapore). A mobile phone today is highly modularized, and compared to 15 years ago, has become far cheaper and more flexible to manufacture. Consequently, the barrier to enter the industry has dropped. Xiaomi, unlike Apple and Samsung, doesn’t run a single factory; all of its assembly and component fabrication are outsourced.  




What destroyed Kodak and Polaroid isn’t confined to photography. Digitalization also inflicted mortal wounds to Sony (Walkman), Toshiba (CRT TV), and Hitachi (video recorder). As our computing power improves apace, product features are increasingly driven by software. Hardware has become commoditized. The seamless consumer experience delivered by iPod has little to do with cutting edge hardware technology (those were off-the-shelf by third parties), but cutting edge software design. Again, it was this influx of the two interwoven forces—modularity and digitalization—that contributed to the displacement of old timers. Out Nokia, Blackberry and Motorola, in Samsung, Google (Android), and Apple.  


Inexorably, the coming onslaught of the internet of things will only further speed up digitalization and information transfer to the cloud. Services and offerings are becoming ever more modularized as new industry standards emerge. The speed of change and toppling of industry leaders we have observed in the mobile space will naturally spread elsewhere. 


Now, is your industry next? Are you ready?


comments powered by Disqus

Trending now »

Hot discussions in our forums right now:

Gigabit cable now available
Created by sub, last reply by Hammerer on 22-Oct-2016 21:45 (55 replies)
Pages... 2 3 4

Sony XZ Owners discussion
Created by networkn, last reply by tripp on 22-Oct-2016 20:31 (87 replies)
Pages... 4 5 6

Does anyone use Ebay?
Created by TeaLeaf, last reply by BigMal on 22-Oct-2016 20:18 (15 replies)

Who is this women? She is possibly the most famous women on the internet and nobody knows who she is.
Created by jimbob79, last reply by cynnicallemon on 20-Oct-2016 13:28 (14 replies)

Labour weekend plans?
Created by DarthKermit, last reply by joker97 on 22-Oct-2016 09:51 (27 replies)
Pages... 2

Is windows 10 anniversary update causing you problems
Created by robjg63, last reply by mdav056 on 20-Oct-2016 14:01 (27 replies)
Pages... 2

Don't worry about drugs. Helium possession is what will get you busted!
Created by Rikkitic, last reply by Rikkitic on 19-Oct-2016 11:11 (27 replies)
Pages... 2

Kiwibank Platinum by fees not by service?
Created by joker97, last reply by openmedia on 22-Oct-2016 11:23 (22 replies)
Pages... 2