iPhone sales might be slowing, but with a $216bn cash pile Apple has the biggest luxury in Silicon Valley: time.
Devices like smartphones get smaller and quicker with every release. Tech workers take drugs including Ritalin and amphetamines to keep up the pace. And over in Menlo Park, Facebook exhorts its employees to “move fast and break stuff”.
A 20-minute drive south to Cupertino, Apple is trying out a different motto: wait and see.
The iPhone maker still has a healthy regard for speed: it sold just short of one million phones per day from September to December last year.
But, right now, the pace is slowing: Apple is selling fewer iPhones than this time last year.
At this point, it’s fashionable to point out that iPhones represent around two thirds of Apple’s revenues; that the company relies on just one product; that Apple’s time is up.
But not so fast. iPhones will continue to make umpteen billions of dollars for years to come, even if their growth is slowing (and remember, there’s a new iPhone 7 on the way this year).
Apple has annual revenues bigger than Portugal’s GDP. It has $216bn cash in the bank. And Apple has time – the biggest luxury in Silicon Valley.
The smartphone, popularised by Apple, was the biggest shift in technology since the invention of the web. With smartphone sales decelerating, it feels like we’re approaching the cusp of the next big shift.
No one knows what the next shift will be. Lots of companies are throwing lots of stuff at the wall: messaging apps, virtual reality, augmented reality, electric cars, driverless cars, space rockets.
Facebook, Google, Microsoft, Tesla, Amazon and SpaceX are all experimenting very publicly. Some of those experiments are working, notably Google’s driverless cars and Facebook’s Oculus Rift. Some have already failed.
Apple has long been rumoured to be working on a car; Tesla CEO Elon Musk says it’s an open secret in the valley. And it’s recently hired people and acquired companies working in VR. At the same time, it’s quietly increased its research and development budget by 25% over the last year.
Back to the $216bn in loose change that Apple has. Whatever the next tech platform is, it will require a lot of money to make work. None of the technologies being experimented with warrant going all-in on just yet.
But sooner or later, Apple will make its bet. And it will be a big one.
Source: SKY NEWS