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See: * Bass Diffusion Model: https://en.wikipedia.org/wiki/Bass_diffusion_model https://en.wikipedia.org/wiki/Bass_diffusion_model * Diffusion of Innovation
by Johnie 8y ago
See:
* Bass Diffusion Model: https://en.wikipedia.org/wiki/Bass_diffusion_model https://en.wikipedia.org/wiki/Bass_diffusion_model
* Diffusion of Innovation Model: https://en.wikipedia.org/wiki/Diffusion_of_innovations https://en.wikipedia.org/wiki/Diffusion_of_innovations
These models have been fairly accurate in forecasting diffusion of innovation. While many of the innovators have started to exit and move on, this leaves the imitators around in a slowing market.
Apple has been surprisingly good at being the forefront of innovation entering a market. While people play catch up in smartphones, Apple has already moved onto the next technological innovation: Apple Watch and wearables.
While one may argue that Apple is more of an imitator than innovator, they have a really unique strategy. They enter a market after the initial innovators have entered with a product that becomes the Dominant Design [1]. They don't focus on the Innovator or Early Adopter market, but more on the Early Majority and Late Majority and exit before the laggards arrive. The Innovator and Early Adopter market require the most capital in R&D and Marketing with lowest return on investment.
[1] https://en.wikipedia.org/wiki/Dominant_design https://en.wikipedia.org/wiki/Dominant_design
- ajross 8y ago> Apple has already moved onto the next technological innovation: Apple Watch and wearables. Seriously? Are there any number at all to show that wearables are a growth bet at this point? The Apple Watch (which entered the market three years ago!) has had an uptake at least an order of magnitude lower than the iPad, the last "next technological innovation" that turned out not to be. Tablets were hot for a while, but at the end of the day the smartphone market remains an order of magnitude bigger. The watch has never remotely been that hot. Basically: innovation is hard. Wearables are not looking like the next big thing at this stage, and they are surely not going to save Apple from the expected downturn in smartphone sales.
- dep_b 8y agoIf iPhone sales growth would level to what the Mac is doing then there's not a real problem. Apple is pushing in Enterprise where it wasn't before, services and indeed wearables (I see AirPods everywhere). I think people will buy devices less often, like you saw with iPads. But keep buying Apple.
- ryanmarsh 8y agoRemember, Apple seems to enter frustratingly late and frustratingly slow (unless it's to change a port, LOL) IF wearables is going to be much of a thing I wouldn't expect to see their flagship products come out until everyone else has had some time to work out the kinks with early adopters. Then watch Apple come in with some of the sticky problems solved (like touch on the smartphone, fit/finish with laptops, simpler OS, etc...).
- supertrope 8y agoI wonder how much of AAPL growth is iPhone sales volume and how much is investors anticipating the next big product category. A cable TV disrupting service hasn't materialized thanks to content owners fear of repeating iTunes's dominance and effective resistance. Cars are hard to build. Medical devices are highly regulated.
- Retric 8y agoNot much, Apples p/e is 17.99 that's not expecting much growth. They simply make insane and slightly growing profit year after year. Honestly they may be undervalued relative to tech stocks as even Microsoft has a p/e of 25.07.
- atomical 8y agoMaybe that's why Buffett is buying more shares.
- influx 8y agoThe Apple Watch is probably a rounding error when compared to the iPhone, however: "But the most interesting stuff came when Cook referred to the success of Apple Watch. The Watch sales are part of the wearables business which also includes headphones such as Beats and AirPods. Last May, he said that business is approaching the size of a Fortune 500 company. More recently, last month, the size had crept up so it would fall in the top 400" https://www.forbes.com/sites/davidphelan/2018/02/15/apple-ceo-reveals-watch-business-approaching-fortune-300-size-company https://www.forbes.com/sites/davidphelan/2018/02/15/apple-ce...
- StudentStuff 8y agoThing is the Apple Watch is viewed as a status symbol primarily, despite Apple's marketing and messaging stating its a health monitoring/heads up display type device. Many of the people who buy it have no idea that it'll catch some potentially imminently fatal health conditions: http://www.dailymail.co.uk/health/article-5683089/Apple-Watch-saved-18-year-old-girls-life-detecting-silent-KIDNEY-FAILURE.html http://www.dailymail.co.uk/health/article-5683089/Apple-Watc... Its impressive how many people buy the Apple Watch without understanding what it offers.
- tsunamifury 8y agoI'd hardly call a 200 dollar watch a status symbol by any stretch of the imagination
- qz3 8y agoI think it depends on the income. But, considering many people buy regular watches costing 20 times more, I wouldn't see an Apple watch as a status symbol either.
- ajkjk 8y agoIt sends a message, which my brain's social apparatus parses as a status-symbol brag (and finds very distasteful).
- 8y ago
- dirtyaura 8y agoHealthcare digitalization and consumer devices as medical devices is the next huge market that Apple is going to with Wearables. You can clearly see it from their actions that it is a part of their future strategy. Apple is so big that it needs a huge new market to enter to make a difference in its revenue. Healthcare and transportation are huge markets. Apple is working on both.
- simonh 8y agoReally? People are still saying Apple is in need of being 'saved'? Wow. I wish I was in as much trouble as them. If it's not better than the most successful consumer product in human history, it's not worth bothering with? Apple is now the most profitable watch company in the world, they sell twice as many iPads as laptops, and sell more of them than even the biggest selling laptop company sells laptops, and their ASP is still going up. Sure. Failed products. What's the point of even trying. > expected downturn in smartphone sales. Which may be a problem some day, but while sals are flat-ish, even their Phone ASPs are still going up. So while growth may not be as rapid as in the past, they'll just have to console themselves by showering in firehoses of cash flow instead.
- kerng 8y agoI think Apple is struggling on trying to figure out what the next big thing could be - its definitely not yet watch and wearables.
- godzillabrennus 8y agoCars. Absolutely no doubt they need to be in that industry.
- supertrope 8y agoHow would Apple improve ease of use or add high tech functionality?
- godzillabrennus 8y agoSelf driving luxury cars. Apple is second to none in focusing on design.
- wilsonnb 8y agoSecond to no tech companies, sure, but Apple would presumably be competing with companies like Volkswagen, BMW, and Mercedes which are almost definitely better at designing luxury cars than Apple.
- stefan_ 8y agoCars are pretty firmly in iPhone slow growth territory. If anything we expect to have less of them in the future.
- godzillabrennus 8y agoSelf driving cars will be high growth.
- IkmoIkmo 8y agoThat, plus car manufacturing is a 10% margin business, Apple is closer to 30%. There's not a ton of money to be made, particularly because the growth in the car industry that will exist will mostly be in getting e.g. Indians to drive, that'll have even lower margins and isn't Apple's target group.
- kerng 8y agoAd Apple) I think Apple is struggling on trying to figure out what the next big thing could be - its definitely not yet watches and wearables.
- NicoJuicy 8y agoI use my smartphone, except for the obvious functionality, mainly for: - reading - responding emails - GPS I don't think I'm market fit for smartwatch and wearables. I also don't see any success in AI self-driving, where alphabet is King.