5G, the mobile network upgrade and mobile phone coverage, which will be rolled out for 2020, is not just quicker data speeds. 5G is the last piece in the puzzle necessary before a major revolution for smart devices and internet connected ‘things’ can take place. Apple are normally forerunners in providing the latest technology to consumers, but this time, the move to 5G could undermine the basic foundations of how Apple sell products.
The Apple Strategy
Currently, Apple thrive off three main areas – having innovative technology, being a luxury brand, and keeping customers in the Apple family.
Innovation: Apple have been first to create and offer new technology so many times that their announcements have often set the direction for future tech. Owning the latest iPhone normally means you have invested in cutting edge technology.
Luxury: Realistically, Apple could sell their products for 25% less and still make a huge profit. Part of the appeal is in the cost – an Apple product is a desirable possession, beyond its simple functionality.
Brand appeal: With the attempt to divide the world into “PC” and “Mac” camps, Apple have created their own ecosystem for users, populated only by Apple products. Apple fans are likely to only have Apple laptops, speakers, smartwatches and other devices to go along with their iPhones. They use iTunes and the iCloud, and while there is more ability to transfer data between platforms than previously, it’s still far easier to stick with Apple once you’ve started.
Saturation of the Smartphone Market
The smartphone market is reaching saturation even without 5G being available, with consumers taking much longer to buy a new phone. This is largely because almost everyone who wants a smartphone already has one, and because the technological upgrades that come with the latest device are not worth the hassle and cost of getting a new phone.
Most people are reasonably happy with the features their current phone offers, and it’s becoming more difficult to entice them to part with hard-earned money for a device that does basically what their old phone does, although slightly better or faster. There will always be a group of people who will pay the price to have the latest and greatest gear, but the number of this population is dwindling.
Changes Brought by 5G.
5G network rollout is inevitably going to mean a move away from physical data storage to the cloud. There are many features that 5G looks set to bring to consumers, but the most talked about is the lightening quick speeds, and the almost undetectable latency. People using 5G networks will be able to download and upload data at mind-blowing speeds, and there will be no noticeable wait time between requesting data and seeing it on the screen.
Both the high speed and low latency means that over time it will become impractical to stay with traditional phone models that carry almost all of their storage internally. Currently, the cloud is mostly used as a backup, but in the future it’s likely that almost all of the phone’s storage and data manipulation will happen in the cloud. That means that instead of software and hardware heavy devices, we will probably be migrating to devices that mostly just act as a gateway to cloud-based services.
5G vs iPhone
5G could attack the iPhone on several fronts. Innovation will always be appealing to consumers, but Apple will need to change their playing field to keep up with other developers. Instead of developing sleeker and more stylish phones, the focus will need to be on functions that other phones can’t provide. The luxury of owning an Apple product will always appeal to some, but as the need for complicated features is reduced by the arrival of 5G, Apple will need to do more for regular customers to justify the ever widening gap in price between the iPhone and other phones that have similar specs. Lastly, having a distinct brand will be less desirable as people move to cloud-based services and the Internet of Things. With innumerable devices available to connect to each other and a primary device, it’s not reasonable to assume they can all be Apple products.
Apple are working be a player in the transition from 4G to 5G, and it makes sense – their devices will need to be compatible and make the most out of the new capabilities. However, addressing new customer needs is another matter, and could require a complete rethink of the approach traditionally taken towards designing and selling new phones. It’s not the first major shift in the market that Apple have come up against, but it could challenge the basic foundation of how Apple make and market products.
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