
Written for a journalism assignment, this article doesn't follow AP Style standards to meet the teacher's guidelines.
Apple made computers accessible to the general public, created the iconic iPod, launched the smartphone and invented the multi-touchscreen. For decades, it led technologic innovation by creating easy-to-use devices which pushed the limits of design.
Since 2007, Apple has sold more than 1.5 billion iPhones. Every year, the brand releases a new generation of iPhones in a keynote listing the new features, announcing its starting price and availability.
Sales of the iPhone, the engine of Apple’s revenue and profit, representing more than half of the company’s revenue, have declined recently. In the most recent quarter, iPhone sales fell by 9%, with revenue declining to $33 billion.
According to analysts, the decline of iPhone sales raises important questions regarding the future of Apple, potentially in search of a new business model. Increasing competition, decline in new technology introduction and changing consumer trends are Apple’s main challenges. Indeed, iPhone owners keep their devices longer, 2.8 years on average in 2018, up from 2.4 years in 2016, according to Hyla Mobile, a smartphone refurbishing company.
“It’s true that there’s no longer any major new feature as we used to have in the past,” said Didier Pulicani, editor in chief of Mac4ever, a French online publication that specialises in Apple products. “We’re now facing iterations [of iPhones] rather than generations.”

Slowed-down innovation
Indeed, iPhone owners keep their device longer because of slowed-down innovation, Pulicani said. Each generation of new iPhones is looking more and more like the previous one.
“Technology slowly evolves, and smartphones have been mature products for the past four to five years,” Pulicani said.
Getting the latest iPhone is not necessarily a bad idea, Pulicani said. Since smartphone users are no longer upgrading every two years, the upgrade is more significant to them.
The iPhone has reached the glass ceiling of innovation where everything possible has been tried, Anthony Nelzin-Santos, iPhone reviewer at iGeneration, said.
Nonetheless, improvements, like the OLED screen of the iPhone X and the cameras of the iPhone 11, can’t be minimised, he added. In addition, other improvements have been made under the hood, notably in terms of artificial intelligence.
However, these additions are not significant new features, apart from Siri Suggestions, Nelzin-Santos said. He said he struggled to understand the purpose of AI for now.
More durable iPhones
Though new generations of iPhones don’t offer as many new features as they used to, Apple made efforts to improve the durability of its phones. The manufacturer opted for stronger aluminum alloys from the iPhone 6S and even shifted to stainless steel from the iPhone X, making them more resistant to shocks.
All iPhones released after the 6S are also dustproof and waterproof, which prevents most damages. However, with the addition of wireless charging, Apple switched back to tempered glass for the back of iPhones (starting from the iPhone 8), making them more susceptible to scratches.
“There needs to be a compromise between a durable product and one that leaves you with the envy to buy the next one,” Pulicani said. “I think Apple found the right balance.”
From a software perspective, Apple usually offers four to five major OS updates, when most Android phones, have one or two. Nelzin-Santos said it’s because Apple keeps updating old iPhones that consumers aren't forced to upgrade.
Concretely, it means new features, security patches and bug fixes can be installed on “old” iPhones for up to five years.
“It’s quite unheard of in the world of smartphones,” Pulicani said.
Consumers are becoming more environmentally-conscious
With growing concerns about climate change, experts argue that consumers are less inclined to upgrade often for environmental reasons.
A few non-profits have voiced concerns about the pollution generated by smartphones. France Environnement found that 70 kilos of raw material were used to make one smartphone.
Another French charity, Halte à l’Obsolescence Programmée, categorises three types of obsolescence: software, hardware and aesthetic.
“Smartphones are accumulating all three, they’re victims of planned obsolescence,” said Adèle Chasson, project manager at Halte à l’Obsolescence Programmée.
The charity sued Apple in France in 2017 for misselling and planned obsolescence — an investigation by the public prosecutor of Paris is ongoing.
Apple now uses the environment as a marketing strategy, saying its latest iPhones use about 25% of recycled rare-earth elements.
But batteries remain a major issue. In 2016, “batterygate,” a controversy over Apple’s software slowdown of iPhone to save battery life, made smartphone owners aware that batteries are parts that wear out, which are not fully recyclable.
Saturation of the market
The iPhone market started to stagnate in 2015, mostly because smartphone ownership in advanced economies reached 76% in 2018, according to Pew Research Center data. Smartphones owners have never been so numerous, therefore sales are less and less by new users, but rather by people upgrading their existing phone.
Evolution of the profit margin
Apple’s profit margins have declined since 2012 – to 21.5% in 2019 from 27.1% in 2012 – because of the saturated market and the stagnation of sales.
Apple chose to make up for this loss, notably by reviewing its pricing policy.
Pricing policy and evolution of the market
Indeed, new iPhones have a higher price tag. In 2007, the first iPhone cost $499. The 10th-anniversary generation, the iPhone X, was $999.
A middle-range of iPhones has been launched (including the iPhone SE, iPhone XR and iPhone 11) along with high-end models as an alternative to the most expensive iPhones.
The increasing price of the iPhone dissuades many consumers, who tend to “skip” one more generation before upgrading.
“If I had to upgrade of iPhone with my own money, I would do it every three years,” Nelzin-Santos said. “They’re expensive devices, and we need to be reasonable.”

The second-hand price of iPhone is higher than any other brand, because iPhones are now considered as durable luxury goods, creating a new market.
Boom of the refurbishing industry
“People prefer to have an old iPhone rather than not having one,” Pulicani said. “Because prices are high, there’s a huge demand for one- or two-year-old iPhones.”
One of Apple’s biggest problems is that it has become its own competitor.
In 2017, the smartphone market grew by 3%, while the refurbishing industry grew by 13%, according to Counterpoint Research. Pulicani described it as an entire parallel market.
Although Apple also sells refurbished iPhones, most of the market benefits third-party resellers.
Role of mobile operators
There has also been a significant change of the smartphone market across advanced economies, in which mobile operators played the main role. They have started to offer SIM-only contracts to customers bringing their own phone, and some even ended the traditional two-year contracts.
Along the way, some mobile operators have ceased to offer subsidised smartphones — and customers must now payfor their smartphone upfront, and at full retailing price.
Future of the iPhone
Since no new major feature would be worth replacing a recent iPhone in 2019, according to most reviewers, everyone seems to be wondering what’s next – including Apple.
In terms of hardware design, Nelzin-Santos drew a parallel between the current innovation period to 2006, when everyone was expecting the arrival of the smartphone, but no one could tell in what form it would take.
“That’s why smartphone manufacturers are getting back to foretelling the future by working on new formats, with pop-up cameras and [foldable screens],” Nelzin-Santos said.
Each brand tests new features to push the market forward because of its saturation. Apple seems to be lagging behind, since competitors have made bolder moves with their 2019 flagships.
Samsung unexpectedly announced the Fold last February, Huawei and Oppo soon followed with similar devices with foldable screens, but all their devices had their official launch date postponed because of engineering issues, according to manufacturers. With these specialised products, brands are publicly testing the waters.
Pulicani and Nelzin-Santos remain dubious about folding screens, which could be a better feature for tablets than smartphones.
Next year’s iPhones should be compatible with 5G, the next generation of wireless technology.
Unlike most of its competitors, Apple has not experience major commercial flops. It is known for its driving force in technology and design and is keeping up its brand reputation.
But some argue that the future of smartphones might not be in their current form. Pulicani and Nelzin-Santos noticed the commercial success of iPhone “accessories,” such as the AirPods and the Apple Watch. AirPods are a bigger bestseller than the iPod, according to Nelzin-Santos.
Apple wearables division’s revenue grew by 54% during the most recent quarter, accounting for almost as much as the Mac division.
Services remain the second division of Apple in terms of sales. With subscriptions like Apple Music, Apple News+, iCloud storage plans, iTunes and AppStore purchases, Apple increased its services revenue by 17% since 2018, reaching $12.511 billion in the fourth quarter of 2019. Last month, Apple Arcade and Apple TV+, two additional subscription services, were launched to compete against Stadia and Netflix, a potential sign of Apple’s plan to move away from a hardware-only business model.
“Apple really got into services and cloud computing; it’s what makes devices work.” Nelzin-Santos said. “It matters for the present of Apple’s devices, and their future.”
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