The iPhone's Mid-Life Crisis: Does the iPhone8 Mark The Beginning of the End of the Smartphone Era?

2017 is the 10th anniversary of the iPhone, which Steve Jobs called “a widescreen iPod with touch controls, a revolutionary mobile phone and a breakthrough internet communications device.” By today's standards that first iPhone was basic: 11.6mm thin compared to today’s sleek 7.1mm iPhone 7, a measly 8GB of storage compared to today’s 256GB option, and, gulp, even a headphone jack.

Apple followed the iPhone with the first iPad in 2010. Upon release, the iPad was largely mocked by pundits as a “giant iPhone.” The iPad, like the iPhone and the iPod before it, eventually went on to capture our hearts, our time, and our pocket book. Just consider this statistic: Apple's OS makes up about 12% of the mobile industry but captures 91% of world's smartphone profits. As of writing Apple has amassed over $250b in cash reserves, and has used that capital to buy all kinds of new technologies often baked into current and future Apple products, everything from AR (Flyby Media) to AI (Turi) to Audio (Siri). Even with all of these acquisitions, Apple has enough cash to swallow up a Tesla or Netflix, maybe both. It’s an immensely influential, profitable, and respected company; according to Millward Brown’s BrandZ study, Apple ranks #2 in its list of most valued global brands.  

Yet at the slightest sign of a problem - a drop in iPhones sales, product defects like the bendy iPhone 5s, unreported data on Apple Watch shipments – Apple's critics quickly whip themselves into an orgy of Apple doom and gloom invariably blamed on the inept leadership of Tim Cook, who must secretly puke a little in his mouth every time he hears the words "Steve Jobs would never have done this."

Yet what made Steve Jobs and now Tim Cook so successful is their ability to disregard the doomsday iProphets. Apple has an unnerving ability to tune out the noise and stay singularly focused on the longer-term big picture. Apple works on its own schedule, tirelessly experimenting, evolving, and tinkering with its existing and upcoming products until it meets the standards its loyal consumers expect.

That's not to say Apple always gets it right. In fact, Apple is prepared to completely ditch ideas, even products in advanced stages of development. It’s a boldness and commitment to quality not too dissimilar to Pixar, another company created by Steve Jobs. The first version of Toy Story 2 – perhaps the Godfather 2 of animated films – was completely scrapped, rewritten, and animated all over again. Apple’s Jonathan Ives has admitted that the company nearly killed off the iPhone several times as it couldn’t quite get it right. As Steve Jobs once said, “sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.”

Which brings us back to the iPhone’s 10th anniversary, and the pressure for Apple to pull another rabbit out of the iHat. By September 12th, you will know whether Apple has managed to simply iterate on the iPhone 7 or indeed come up with a highly-anticipated and rumoured quantum leap iPhone – light-weight and ultra-strong graphene; airless charging; rapid, long-life batteries (please!); theatre-mode projection; built in AR; edge-to-edge OLED interface. 

No doubt the iPhone8 will be the star attraction at the birthday festivities. But Apple whisperers around the world will be carefully assessing Apple's other announcements, searching for clues as to how the company will over time become less reliant on its iPhone cash cow. 

If I were a betting man I would say Tim Cook is positioning Apple for the inevitable rise of the immersive Internet, a world less dependent on smartphones and more reliant on Siri and its advanced AI to predict your needs, act on your behalf, and augment the world around you via your implicit permission or explicit requests, more often by voice not typing on a device. We know the Apple Speaker is on its way, bringing Siri and voice interaction into your house. We know Apple is working on a Watch that can fully function, including phone calls, without your iPhone. We know (via a government mandated employee accident report of all things) that Apple is experimenting with Augmented Reality Glasses, presumably a vastly superior version to the much ridiculed Google Glasses. We also know Tim Cook has hired hundreds of experts from Tesla and elsewhere to run its super-secret “Project Titan” Apple Car experiments. Apple could also jump further into the content game via an acquisition of Netlfix, HBO, Disney, or according to last week's tabloids the James Bond franchise.

So ironically, just as we are celebrating the iPhone's birthday, we are also perhaps witnessing the beginning of the end of the smartphone era, and a bold new chapter for Apple to extend its presence into cars, homes, content and beyond. Apple's innovation pipeline provides clear signs that Tim Cook is laying the groundwork for a future intelligent and immersive Internet ecosystem in which the iPhone will eventually play a dimished role in people's lives and the company's fortunes. In fact, years from now the iPhone8 launch may be seen as the smartphone's mid-life crisis, one last burst of youthful exuberance before old age and eventual retirement. 

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