Apple has a master plan and I'm going to do exactly what I think it is but before that'll make sense how do I believe and get to hear how Apple managed to create the most profitable fan base on the planet. It's the principle of simplicity but creating simplicity for the user actually means a lot of work behind the scenes. For example, take the Apple pencil when I put it down it rolls up until the word pencil is facing up and then it'll just stop that means if I put it down now it won't keep rolling it won't fall off the table. It's such a simple trick as far as the user is concerned that you don't even realize it's happening, but Apple spent months working on the weight distribution or product packaging for the iPhone. Apple tested hundreds of different prototypes just to get a box that opens at a constant velocity when you lift the lids not so slow that it's annoying but slow enough that it builds anticipation for when you see your new phone. or probably as far as the user is concerned the iPhone 11 can take walk' video at 60 frames per second but when you do that what your iPhone is actually doing is shooting 4k at 120 frames per second with every alternating frame being a low exposure frame which is fused with a normal exposure frame to keep the brightest areas from overexposing. I feel like a lot of companies would make a huge racket about being able to do this. The whole concept of creating simplicity, Apple uses this for everything, take the product announcements, tech companies just keep talking while is Twitter page, for example, makes five announcements a day that there's a promotional offer or they're sharing a review someone's left with early and then you realize the Huawei has 15 different accounts for doing this at the same time. They've got billboard ads, YouTube ads and Facebook ads all year round and you kind of care but because you see so much of this messaging from all of these companies while his messaging blends into Samsung's messaging which blends in to LG's messaging and it all just becomes noise. So, what does Apple do, Apple is silent for 95% of the year. They have 4.5 million followers on Twitter, but they've never made a proper tweet and so when Apple does make an announcement it's like the whole tech world stops to listen to what they have to say. It's not like Apple is any more important than Samsung, it’s just that Apple keeps it simple. They just talk when they have something big to say and I think in that sense they do it right even how Apple addresses its products. Apple doesn't communicate features, they talk about benefits for the simple reason that makes people feel something you might remember.
When they
launched the very first iPod I wouldn't say it was anything groundbreaking, it
was okay and if all they done was to just say look we've got a new mp3 player
it's got five gigabytes of storage I don't think anyone would have cared but
the angle Apple took was this product will give you a thousand songs in your
pocket think about that line and when you think about it you're probably not
thinking anymore about a dull box and storage capacities you're thinking about
your own playlists and flicking through it on your iPod with your favorite song
being blasted through your ears and you feel Apple makes things simple for
their customers. Apple pretends other brands don't exist as they don't mention
other companies and they don't even compare benchmark scores with other brands.
All they say is that this model is a certain percent faster than the last model
and that's all you need to know. I think this is subconsciously affects every
single person, it changes the question in their head of which phone do they buy
to which iPhone do they should buy and for the people who are already in that
ecosystem it creates lock-in it means that from the point when you buy your
first iPhone the only decision you have to make from that point onwards is, do I
buy this iPhone? or do I wait until the next year? Apple does the exact same
the thing with its ecosystem products, they act like Air pods are the only earphones
on the planet, the Apple Watch is the only watch you could possibly consider
buying. It's almost like they live in a parallel universe where the only tech
products that exist are Apple products.
Here's the thing the way they've managed to connect with people through simplicity means
that Apple fans follow suit you probably know a few people like this they have
an iPhone, they have Air pods they might even call themselves tech enthusiasts
but really the only tech that matters to them is Apple tech. Apple is killing
it right now and no stat better represents this, then how they have around 20%
of the small market but how with only this they have 66 percent of all profits
that's crazy because Apple makes our own chipsets too for every phone they sell
they save the $30 or $50 cut that every Android maker has to give straight to
Qualcomm so more profit. The interesting thing is how Apple over the last three
years has slowly but surely changed tact well. Historically, Apple has been
perfectly happy with this 20% market share because they make so much profit per
model, if this pool of people who are buying new phone starts to shrink then
tech companies have to start looking for the profit in other places like subscription-based
services like Apple music and here's the beauty of one of these instead of a
normal purchase where let's say I'm the company, I've got to convince you to
buy this year, I've got to convince you to buy again next year and then I've
got to convince you to buy again the year after that with the subscription I've
only got to convince you to buy once and then providing I don't disappoint you
or mess up. It’s steady predictable income how much income you might ask well,
Apple currently has six main subscriptions on offer you've got a blockade on
Apple TV plus which are $5 a month each, you've got Apple music news plus an
iCloud which have $10 a month each and then the iPhone upgrade program where
you always get the latest iPhone which going to cost you around $50 a month. Add
these up that's $90 a month which across two years is $2160 and after all that
you still don't own the phone if you want to keep it you pay for it. So you can
understand that as far as tech companies are concerned subscriptions are the
future and Apple isn't the only one it's slowly but surely whether you've
noticed it or not, pretty much every internet company is slowly creeping
towards some sort of monthly payment. I was in Prime even YouTube with YouTube
premium and I think it's only a matter of time before we get Apple Plus or some
sort of equivalent where Apple throws all of these things together into some
sort of bundled subscription service.
But this is
Apple's big dilemma their past strategy doesn't fit perfectly into this new
future. If you want to sell a subscription to people you've got to get your
device into as many people's hands as possible, but Apple hasn't really done
this. If anything, Apple has purposefully sold their phones to fewer people to
keep things simple, Apple could have made 50 different phones for every single
possible price point, but they didn't because they wanted to focus on a few
models and really control the end-user experience. You can't do that as well
with 50 different phones as a result Android right now has almost 80% of the
smartphone users worldwide and even though this group of people is on average a
lower-income group it's also a rising income group.
So, to
counter this Apple has needed to become a bit more like Android they've needed
to offer multiple phones and multiple different price points and I think that's
the reason we got the iPhone S II. It's first, to give longtime iPhone 6 or
iPhone 7 users an affordable upgrade option so they don't go over to Android
and second, to steal Android users because every person who jump ship to iPhone
is one more person who could subscribe to Apple News plus and Apple music.
So, when I
first saw the iPhone SE, I was already 95 percent sure this is what Apple was
trying to do but because there was that 5% uncertainty, I ended up describing the
things. But over the last few weeks, Apple has revealed two pieces of
information that means that I'm now 99% convinced.
So, first up iOS 14, for the longest time Android
has had a few killer advantages over iOS customization choice and it's a simple
features that Apple could have added them at any time but they didn't because
historically, Apple has benefited from having tight control over the end-user
experience but iOS 14 changes that it introduced a range of all resizable
widgets for the first time ever. You now get an app drawer so you don't need to
have ordered apps on your home screens, you can change your default browser and
picture-in-picture mode which means that Apple's multitasking no longer sucks. But
why did Apple wait 10 years to add such simple things to their phones, well I
would say it's because now more than ever Apple needs Android users to switch
iOS 14 is a direct attack on Android. If you've ever tried to buy a MacBook
you'll have noticed something very funny about them, you have absolutely no
idea when the next one is coming out it could be January, could be June or could
be not at all this year, isn't that kind of weird from a company that releases
their iPhones so on the dot predictably, well long story short for quite a few
years. Now Apple has been relying on Intel to produce its processors and AMD to
produce their graphics and it's not paying off, Apple has no control over how
much performance improves each time. Sometimes Intel delivers the chip and it's
like literally a five percent improvement and also they're often delayed which
means the Apple ends up delivering a late product to consumers. So, a few weeks
ago Apple basically said we're going to use our own chips for our MacBooks and
on the face of it, this seems like just a knee-jerk reaction to Intel's
inconsistency. But I'd be willing to bet that Apple has been planning to do
this for a long time. Apple services as of right now only control like 10% of
the computer market so there's the potential to reach a vast amount of new
people who don't at all use any Apple products and using their own chips could
be the key to that by using a similar mobile chip to the one found in the
iPhones and the iPad Pro. Apple could make a hyper-efficient laptop in a super
slim body with a full two-day battery life and I think there's a good chance
Apple will make a cheaper model after all they can manufacture a powerful phone
chipset for $30 so they could quite feasibly create a laptop equivalent about $450
and when you put that up against other companies like Dell and Acer who are
going to be paying $300 to Intel and AMD for the equivalent, Apple has a
serious strategic leg up and the other implication of using Apple mobile chips
is that it doesn't just make Mac's more appealing it makes all Apple products
more appealing. Because with this, Mac's can now use iOS applications and with
a bit of tweaking iOS can run Mac applications. Now obviously, you're not just going
to sit there playing Angry Birds on your laptop but this is huge, Apple is
bringing together two different user bases and developers have more of an
incentive to make apps for Apple because now all of a sudden they can be used
by a larger pool of people and the customers benefit if you're a Mac user
you're suddenly getting access to the biggest app store in the world. And if
you're an iPhone or iPad user you might well end up seeing pro-level photo and
video editing apps that were made for Mac and then ported over.
So what's
the big picture here how does all this tie together I'm about to tell you that
the Mac is about to merge with the iPad and the iPhone to become some sort of
hybrid super machine no for the simple reason that Apple wants you to buy all
of their products, it’s just that Apple doesn't want a beta test with a new
product category they want to just have the best products within each existing category,
think about it. At the very center of everything is Apple services to get
sustained profit over time this is where Apple wants to get people and for a
while now the main funnel, the main entry point into these services has been
the iPhone. The iPhone would lead people into Apple music, Apple news and also
other Apple products like the Apple Watch, Air Pods, the iPad. But because the
iPhone was expensive and because it was the only real main entry point, Apple
needed more of a flow into their services so they introduced iOS 14 and the new
iPhone SE they somewhat gave up the simplicity and the control they'd worked so
hard to create in order to make the iPhones more accessible and instead of just
relying on the iPhone, Apple made its other products more distinct and more
able to stand on their own two feet. They've turned the iPad from just a big
iPhone into a computer with its own iPad OS operating system, they turned the
watch from an iPhone accessory to an independent Smartwatch with its own App
Store and most people would say it's not just the best Smartwatch for if you
have an iPhone. Apple's about to make a Mac that's far better than any Mac
before and one that might just be cheaper.
And before
you know it Apple's got multiple products dominating their own respective
product categories all feeding a much wider user base into this core of Apple
services you see it right the iPhone is no longer a bottleneck. And I would go
as far as to say that once you've reached the middle there's a ricochet defect
because of how each of these products is almost purpose-built to run Apple
services, once a person has reached the middle and is paying monthly to use
those Apple services they might as well buy more Apple devices to consume them.
So, the sale
of one piece of hardware indirectly leads to the sale of more hardware. There's
one more thing a lot of people don't like Apple's new software skins, there are
icons that look very rounded. There are strange shadows behind things even though
Apple has spent literally the last 10 years trying to remove shadows and Siri has
now a 3d shape why did Apple just stop paying its designers and this is their
way of trolling us probably not. I think it's because augmented reality is
coming as Apple is working on some sort of glasses or headset that gives you
some smart capabilities on your face and I think Apple's recent announcements
orbit confirm this. They even said that air pods are getting an update that
allow for spatial audio and the reason augmented reality is so potentially
important is that it's a completely new category of products where frankly has
the sky limit no one knows what it's capable of.