Nokia makes phones, but Apple makes money

Wednesday, 11 January, 2012

Has it really been five years since Apple launched the iPhone? Apparently. The “revelation” was on 9 January 2007, but the wide world had to wait until June that year before the magical device was made available to consumers. From the get go, the iPhone was a hit. And, apart from a few tweaks, it’s essentially the same phone today as it was five years ago. The screen size hasn’t changed and the mix of Gorilla glass and aluminium is as compelling now as it was then. In fact, the package is so captivating that Samsung is now making near-perfect copies and flogging them shamelessly as it they were something original. As one wag pointed out recently, Jonathan Ive now leads the design team at the world’s two most profitable phone makers.

Apple iPhone3 As RIM and Nokia look on in desperation, the question everyone’s asking is what will Apple do next. A clue can be found in Walter Isaacson’s magnificent biography of Steve Jobs: “One of Jobs’s business rules was to never be afraid of cannibalizing yourself. ‘If you don’t cannibalize yourself, someone else will,’ he said. So even though an iPhone might cannibalize sales of an iPod, or an iPad might cannibalize sales of a laptop, that did not deter him.” Jobs launched the iPhone at a time when iPods accounted for nearly half of Apple’s profits, yet a free iPod was a feature of the iPhone. Unsurprisingly, iPod sales have declined since 2007. But the success of the iPhone has made up for the loss. Interestingly, the iPod was five years old when Apple launched the iPhone so, if form is any kind of indicator, this should be the year when Apple gets back to cannibalizing its children.

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