Apple is going to fail in 2020? Cook: Let's see who earns more than me

In recent years, the most common voice in the technology circle is criticizing Apple. From the small screen to the low screen-to-body ratio, to the current slow 5G development, the complaints about Apple have never stopped. However, in 2019, Apple's market value continued to rise, and after the low point at the end of 2018, it broke through $1 trillion again.

In the coming 2020, 5G is seen by major manufacturers as the biggest hope to save sales and survive the cold winter. After being dissed for a whole year, Apple is finally going to launch a 5G iPhone to keep up with its competitors. However, unlike many people who are pessimistic, I am more optimistic about Apple in 2020.

Apple is betting heavily on 5G, and the biggest regret of iPhone disappears

When talking about Apple, we cannot avoid the iPhone. Although its revenue share has declined in recent years, it is still Apple's most important business.

5G iPhone is the big move

It is said that 2019 is the first year of 5G. So how many 5G mobile phones did manufacturers sell this year?

According to data provided by IDC, domestic sales of 5G mobile phones in the third quarter were 485,000 units, while the overall sales of mobile phones were 97.8 million units, of which 5G mobile phones accounted for less than 0.5%.

Another statistics agency, IHS Markit, gave the global sales of 5G mobile phones in Q3, with a total sales volume of 4.3 million units, accounting for approximately 1.2%.

Whether it is the price of 5G mobile phones or the coverage of 5G signals, they can be the reasons why people are not so enthusiastic about 5G.

However, the situation will change dramatically after entering 2020. According to the data given by IDC, the sales volume of 5G mobile phones in 2020 is expected to reach 123.5 million units, accounting for 8.9% of the total shipments.

Recently, Apple whistleblower Ming-Chi Kuo revealed that Apple will launch five iPhones in 2020, four of which will support 5G. They will be released in the fall as in the past, with screen sizes of 5.4 inches, 6.1 inches (two models) and 6.7 inches.

There is no doubt about the iPhone's 5G solution. After Apple and Qualcomm reached a settlement, the use of the Snapdragon X55 baseband is basically a done deal. Facing the 5G boom in 2020, Apple is already prepared. Of course, for more users, the biggest significance of returning to Qualcomm's baseband is that it is expected to improve the iPhone's widely criticized signal problem.

At the same time, Apple has also reserved a trick, and it is likely to release a cheap 4G mobile phone iPhone SE2 in the first half of 2020. This product is likely to use the mold of iPhone 8, adopt A13 chip, and the starting price is controlled within 3,000 yuan, which can be called a cost-effective small-screen flagship.

5nm+A14, iPhone chip advantage is expected to continue

Self-developed A series chips are Apple's traditional advantage, and their performance has always been superior to that of Android competitors of the same period. It is no surprise that the 5G iPhone will be equipped with the A14 chip. However, there is still very little information about the A14.

What is certain now is that the A14 will use TSMC's 5nm process. According to official news, TSMC's 5nm process has achieved risk mass production in April 2019. According to information provided by the industry chain, the A14 chip will have tape-out samples in September and will be mass-produced as early as the first quarter of 2020. The A14 may take up two-thirds of TSMC's 5nm production capacity.

Compared with the 7nm process, the 5nm process will have improvements in power consumption and performance. According to the analysis of TSMC's technical documents by foreign semiconductor experts, the general conclusion is: compared with 7nm, TSMC's 5nm process has improved performance by 15% at the same power, reduced power consumption by 30% at the same performance, and increased logic density by 84%. It is basically certain that A14 will be the killer feature of the iPhone 12 series.

In the next decade, Apple has found a new growth point

The first decade after the smartphone era began was a decade of dominance for Apple. The success of the iPhone transformed Apple from a computer company into a huge empire with mobile phones as its mainstay business, and its market value has long remained the world's number one.

But as of today in 2019, smartphones and related industrial products have become extremely mature and mediocre. Today, the sales volume of the overall mobile phone market has been saturated, and the incremental market has become a stock market. Growth difficulties and decline have become the norm. Even if 5G can bring a wave of replacement dividends, its effect is ultimately limited.

How to deal with the next decade? Apple’s answer is service.

In 2019, the launch of a series of subscription services such as Apple News+, Apple Card, Apple Arcade, and Apple TV+ demonstrated Apple's strategic thinking for the future.

In fact, it can be seen from the financial reports of previous years that the contribution of Apple services to revenue and profit is increasing. Now, it has become the second most profitable Apple business after the iPhone. Before the launch of the four major services this year, Apple services mainly consisted of Apple Music, App Store, etc.

Apple is investing heavily in its service business, on the one hand to expand its revenue sources, and on the other hand to gradually consolidate and improve its existing closed ecosystem.

The major adjustments in the service business are also reflected in the hardware products. In the past two years, Apple cut a large number of low-priced products, which were revived in 2019, such as iPod touch, iPad Air, iPad mini, etc. The launch of these products with cost-effectiveness as the core selling point is nothing more than an attempt to further expand the coverage of Apple hardware, achieve user growth, and form a stronger ecosystem.

From my personal experience, we can see that there are a lot of loyal fans of Apple who are not completely satisfied with iPhone or Mac products, and they complain about Apple's lack of innovation and low aesthetic standards as much as non-Apple fans. However, if they want to jump out of Apple's ecosystem, the cost is very high. The game data accumulated over the years, the files in iCloud, the iOS or macOS exclusive applications, and a series of usage habits will form a strong bond.

The focus of Apple in the next decade is to make this stickiness stronger. Imagine if you listen to music, watch TV, read news and even pay with a credit card, all of which are bound to an Apple ID, how much motivation do you have to switch to another ecosystem?

Moreover, even though it is almost 2020, Apple's ecological advantage is still obvious compared to the Android camp. Apple is currently the only brand that has achieved hardware and software integration in multiple products such as computers, mobile phones, tablets, TV boxes, and smart watches.

To give another simple example, Google has not been able to do a good job with Airdrop, a file transfer service with a simple technical principle. In the domestic market, even Android manufacturers such as Xiaomi, OPPO, and vivo have to form a fast transfer alliance to make the experience of this function better.

It’s too early to criticize Apple now!

Before the iPhone became the dominant smartphone, Nokia was the leader in the mobile phone industry. In 2008, Nokia's global market share reached 38.6%, a record that no other manufacturer has been able to break, including Apple. The collapse of the Nokia empire is a long and complicated story, but the core part is that touch-screen smartphones killed traditional mobile phones.

The change from traditional keyboard phones to touch-screen smartphones is revolutionary, with both the touch-screen form and the interaction method undergoing qualitative changes. At the same time, the application ecosystem has become the key to the success of smartphones, and the advantages of iOS and App Store have made Apple a success.

If Apple repeats Nokia's tragedy, Apple's foundation will be destroyed. But at present, the next revolutionary form or interaction method of smartphones has not yet appeared. The content on smart devices has not changed fundamentally. Although the concept of 5G is very popular, it will take a long time for it to be popularized. There is no killer 5G application yet. What's more, it is not too late for Apple to focus on 5G iPhone in 2020.

After becoming the world's most profitable company, Apple is becoming uncool little by little. It is understandable to feel disappointed with Apple products such as the iPhone. However, from a business perspective, the model built by Apple is still extremely successful. It continues to make a lot of profits from the mobile phone business every year, and the service business is expected to become the next growth point. At least for now, we can't see the crisis that can weaken Apple.

Moreover, the investment market is still optimistic about Apple's future. In terms of the most intuitive stock price, Apple's stock has been growing and is now approaching $300.

Whether it is Android or Apple, after going through a period of rapid development and progress, it is inevitable that the products will become mediocre. For leading manufacturers, making mobile phones may no longer be an end, but a means to build an unbreakable ecosystem and earn money from users in all aspects.

In the past, present and even for a long time to come, Apple is the brand that has best implemented this concept. Therefore, I believe that 2020 will not be a lost year for Apple, but will be full of the possibility of an explosion.