Will Apple become the next BlackBerry?

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Blackberry (NYSE: BB) once ruled the smartphone world. The then Canadian company known as Research In Motion has launched a brand new smartphone experience with its secure, keyboard-equipped phones, which have become the choice of business users around the world. In fact, the company dominated not only the US smart phone market with a 55% market share nearly a decade ago, but also successfully defended its pioneering position. Apple (NASDAQ: AAPL)"data-reactid =" 11 ">Blackberry (NYSE: BB) once ruled the world of smartphones. The then Canadian company known as Research In Motion has launched a brand new smartphone experience with its secure, keyboard-equipped phones, which have become the choice of business users around the world. In fact, the company dominated not only the US smart phone market with a 55% market share nearly a decade ago, but also successfully defended its pioneering position. Apple (NASDAQ: AAPL)

The US smartphone's market share of the iPhone has gone from 30% in the third quarter of 2008 to 19.5% in the first quarter of 2009, according to IDC market research firm. Consumers were still inclined to turn to BlackBerry smartphones because of their cachet, aggressive pricing, and state-of-the-art security.

But it did not take long for things to go south. A massive shift in user preference for more flashy Apple devices, as well as for Android phones running Google, was a major blow to BlackBerry. Canadian society was responsible for not acting quickly enough to take advantage of market shifts to touchscreen phones.

In short, BlackBerry thought that its loyal customers would continue to buy what it offered, so it did not feel the urgent need to innovate. That turned out to be his loss, and in an ironic twist, Apple now seems to follow the same path.

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<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The problem at Apple"data-reactid =" 27 ">The problem at Apple

Apple has built a huge user base. Nearly a year ago, Apple announced 1.3 billion active devices worldwide, including iPhone, Mac and other Apple devices. According to some estimates, the number of iPhones would be one billion. This might sound like a solid catalyst for iPhone growth since these users are looking to upgrade their devices, but this may not be the case.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "An estimate indicates the installed base of New IPhones have only increased by 6% per year over the past two years. In comparison, the installed base of in use IPhones have grown at a compound annual growth rate of 61% over the past two years, according to this estimate. Consumers are therefore clearly looking for value in the smartphone ecosystem of Apple and are ready to give up new devices. "Data-reactid =" 29 "> An estimate indicates the installed base of New IPhones have only increased by 6% per year over the past two years. In comparison, the installed base of in use IPhones have grown at a compound annual growth rate of 61% over the past two years, according to this estimate. Consumers are therefore clearly looking for value in the smartphone ecosystem of Apple and are ready to give up new devices.

Apple has continued to increase the price of its new devices in order to maintain its momentum, but this strategy could turn against users who will keep their iPhone longer.

In addition, the price of premium iPhone will disable some people who could have turned to Apple if the price was lower. If anyone wants to buy a high-end device while looking for value, there are many options besides Apple.

Huawei, for example, is seeking to push the boundaries of the high-end smartphone market by offering its devices advanced features not yet available at Apple. The Chinese smartphone giant's strategy of aggressively pricing its devices against the latest iPhones has generated rich profits, leading to strong growth in unit sales and market share.

On the other hand, Apple's strategy of adding additional features and selling its iPhones at a higher price has resulted in stagnant unit sales. IPhone unit sales were about 47 million in the fourth quarter; dish with the previous year. The company has decided to stop publishing sales information for its units in its quarterly reports.

BlackBerry was facing the same stagnation years ago. It's focused solely on the gradual evolution of hardware and software, so that users have finally moved on to something else. This was despite the value of the long established brand in the world of business and the global base of more than 75 million users more than ten years ago, just as the smartphone revolution began.

The story continues

BlackBerry's strategy has finally cost the smartphone kingdom despite its initial dominance, and some may fear that Apple is now slipping into the ranks of smartphones with a similar strategy.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The difference"data-reactid =" 40 ">The difference

Despite the worrying signs, Apple is still far from becoming the next BlackBerry for several reasons.

First, the company has built a solid service business. Its services business generated revenues of nearly $ 10 billion in the last quarter published, an increase of 17% over the same period of the previous year. The service business now accounts for nearly 16% of the company's total revenue and is expected to continue to grow rapidly thanks to Apple's huge installed base.

Second, it is not a single product company, like Research In Motion. The Cupertino product portfolio includes fast-growing tablets, computers and consumer devices such as smartwatches and smart speakers. BlackBerry, on the other hand, was heavily dependent on its smartphones; its inability to diversify into the tablet market put an end to a potential downturn.

This does not mean that Apple can not follow the same path as BlackBerry – it still depends on smartphones for most of its revenue. The iPhone generated nearly 59% of the company's revenue in the last quarter and the iPhone will be key to the growth of the rest of the ecosystem.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For example, a customer buying a new iPhone is more likely to buy an Apple Watch instead of another smart watch, and an iPhone user will be more likely to buy Apple's smart home systems than Amazon.com or Google. Thus, the iPhone will remain a key part of Apple's long-term growth, and a breakdown here could be bad news for other areas. For example, a customer buying a new iPhone is more likely to buy an Apple Watch instead of another smart watch.Also, an iPhone user will be more inclined to buy Apple's smart home systems than those of Amazon.com or Google. Thus, the iPhone will remain a key to the long-term growth of Apple, and a breakdown here could be bad news for other areas.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Things are not going well right now"data-reactid =" 46 ">Things are not going well right now

Latest reports suggest that the growth of the iPhone is slowing down. Ming-Chi Kuo, a popular analyst at Apple, has cut his iPhone production forecast for the first quarter of 2019 to a range of 38 to 42 million units. This is almost 20% less than the previous year's production. In addition, Apple's shipments in 2019 are expected to decrease by 5% to 10%, and Kuo anticipates that new devices later in the year will not do much to boost sales due to the lack of major upgrades ".

It's a long shot that Apple is going to implode anytime soon. But signs of trouble have begun to appear and Cupertino must act in time to avoid being the next BlackBerry.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 49 "> More from The Motley Fool

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "John Mackey, CEO of Whole Foods Market, an affiliate of Amazon, is a board member of The Motley Fool. Harsh Chauhan does not hold any of the shares mentioned. The Motley Fool owns shares and recommends Amazon and Apple. The Motley Fool offers the following options: long calls from $ 150 to January 2020 for Apple and $ 155 short calls from January 2020 to Apple. The Motley Fool recommends BlackBerry. Motley Fool has a disclosure policy."data-reactid =" 57 ">John Mackey, CEO of Whole Foods Market, an affiliate of Amazon, is a board member of The Motley Fool. Harsh Chauhan does not hold any of the shares mentioned. The Motley Fool owns shares and recommends Amazon and Apple. The Motley Fool offers the following options: long calls from $ 150 to January 2020 for Apple and $ 155 short calls from January 2020 to Apple. The Motley Fool recommends BlackBerry. Motley Fool has a disclosure policy.