Apple Hasn’t Found a Product as Profitable as iPhone yet but These Future Plans Look Promising

For years, the iPhone has been a blockbuster product for Apple and its investors. The iPhones are the center of Apple’s product ecosystem and generate more than half of the company’s total revenue. And, that’s a huge thing. For quite some time, customers and investors have been waiting for Apple to develop another ‘Big’ thing with the same revenue potential as the iPhone. Unarguably, that’s a serious challenge.

In fact, Apple has warned investors that its new products might never be as profitable as the iPhones. This disclosure surprises investors and tech enthusiasts, given Apple’s commendable track record of groundbreaking innovation. Apple makes this bold statement as it explores other new categories like Artificial Intelligence and Mixed reality headsets.

That said, it doesn’t mean Apple isn’t planning anything for its investors and customers. According to a report by Mark Gurman, Apple might never find a product as profitable as the iPhone, but it can bet on several new Watch or iPad-like businesses to continue driving growth.

iPhone Was a Game-Changer for Apple

The iPhone launch in 2007 wasn’t just a breakthrough in the smartphone industry, it was also a pivotal step that defined Apple’s success and profitability for years to come. Today, there are more than a billion iPhones in use globally, and customers are content with a powerful computing device that fits their pockets.

Talking about the revenue, iPhones generate more than $200 billion for Apple annually, driving more than half of the company’s total revenue. Also, it helps fuel another $100 billion in services and accessory sales. Today, Apple’s App Store, Apple Watch, AirPods, Apple Music, and TV
+ Streaming platforms are successful because of a smartphone that was a smash hit when it first debuted almost two decades ago.

Over the past 15 years, the Cupertino tech giant tried to multiply the iPhone with other product categories like iPad which brings over $20 billion annually and wearables and home products which fetch $40 billion a year.

We all know that Apple’s forays into an entirely new category haven’t been uncomplicated. Earlier this year, Apple cancelled its electric car project after a decade-long, multi-billion-dollar effort. Also, the company’s first attempt at mixed reality, the Apple Vision Pro failed to impress a wider customer base. All these years, the iPhone craze was in the top gear.

Apple’s Future Plans Beyond the iPhone

Let’s face it. Apple may never find and come up with a product that could be as hit as the iPhone. It’s a challenge to find another product that has the potential to generate over half of Apple’s total revenue. Given the current scenario, Apple just can’t wait to crack its next big opportunity, it should explore new device categories that can match the Mac, iPad, and Apple Watch levels.

Mark Gurman believes that a broader range of Vision wearable products, including smart glasses, AR spectacles, and iPhone-connected head-worn displays could become a $25 billion business. At the moment, AirPods bring around $10 to $15 billion each year. If Apple could integrate health features and other technology, AirPods also has the potential to grow into a bigger product category. Apple has recently announced hearing health features for the AirPods Pro second-generation. Also, the tech titan has plans to add health sensors, AI features, and cameras to AirPods. Such innovations may help AirPods to impress a wider audience.

Another area that Apple is exploring is mobile robots, even humanoid models that could with household chores. While it may take a decade to materialize, or might never become a product, it highlights Apple’s commitment to future innovation. Apple is also considering how to turn its health features into recurring subscriptions. Also, it might push into home energy products.

Beyond the new categories, Apple is also focused on delivering gradual improvements to its existing product lineups. We might see Macs with faster chips and thinner designs. Also, Apple might finally give us the touchscreen MacBooks we’ve been waiting for years now. iPad may gain larger displays and foldable models, making them more versatile than ever. Apple is also making all the efforts to bring glucose and blood pressure monitoring on Apple Watches. While everything is in the works, Apple will try to make its iPhones more capable & attractive with new designs, cameras, and Apple Intelligence features.

These smaller bets will help Apple to stabilize and grow its business for years to come. If Apple wishes to prosper its tech presence and multi-fold its revenue, it should make all the efforts to turn innovations into practical products. Rather than once-in-a-generation hits, it must explore several stable trajectories for growth.