You might think of Apple primarily as a phone company. You aren’t wrong.
Apple derives the vast majority of its vast wealth from selling phone hardware. Not plans. Not apps. The iPhone itself is, by far, Apple’s most profitable product.
Here’s the company’s latest earnings sheet highlighting that fact:
But, as so many technology writers before me have pointed out, the iPhone is essentially a tiny computer that doubles as a phone. Smartphones in general, really, are amazing little computers. So is basically everything that Apple makes.
Take the iPad, for instance: it’s a slightly larger iPhone without phone functionality that primarily serves as a laptop without a keyboard. The same applies to Apple’s newest product line, the Apple Watch: It’s not a watch at all, but a little computer that primarily functions as a watch. In so many words, Apple is in the business of making computers of varying sizes and functionality. Apple is not a phone company, watch company, or tablet company. It’s a computer company.
Apple’s senior vice president of worldwide marketing, Phil Schiller, sees Apple’s products the same way.
“They are all computers,” Schiller recently told Backchannel’s Steven Levy in an interview. “Each one is offering computers something unique and each is made with a simple form that is pretty eternal.”
And he’s right. They’re basically all just computers. No one is passing down their Apple Watch as an heirloom. They’re buying the next model and passing down the old one — to family, or to friends, or to eBay — on its way to the dustbin of history. It’s another disposable computer.
Here’s more from Schiller in his interview with Backchannel:
The job of the watch is to do more and more things on your wrist so that you don’t need to pick up your phone as often. The job of the phone is to do more and more things such that maybe you don’t need your iPad, and it should be always trying and striving to do that. The job of the iPad should be to be so powerful and capable that you never need a notebook. Like, why do I need a notebook? I can add a keyboard! I can do all these things! The job of the notebook is to make it so you never need a desktop, right? It’s been doing this for a decade.
It’s a fascinating way of looking at Apple, and one that’s apparently shared by the company’s top executives.
The company is making one product across a variety of form factors and intended use cases. One is a computer phone (iPhone), another is a computer watch (Apple Watch), another is a computer box that powers your TV (Apple TV). And, of course, there’s the iMac — a desktop computer that Apple still makes. We just reviewed the new one.
In a sense, all of Apple’s products are competing to replace the next step up in size in Apple’s single product line.
That puts the onus of innovation on Apple’s least profitable, most archaic product: the desktop computer.
Indeed, the new iMac’s big innovation this year is adding a more impressive screen to the smaller model (4K) and more powerful internals to both models — not exactly ground-breaking innovation, but the kind of moderate iteration you see year-to-year in many of Apple’s products. For example, this year’s iPhone adds a few new bells and whistles, but it’s basically just a slightly better version of last year’s iPhone.
More importantly, perhaps, is the philosophy behind a single continuum of Apple products. It means that the company sees its products as part of a single roadmap, and goes a long way in explaining why Apple’s products tend to work so seamlessly together.
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