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Monday, February 18, 2019

Apple Preparing for life after iPhone

Interesting stuff.

As you read this, remember that Apple just created its first head of AR Marketing.

They're also talking here about a lot of video streaming.

Writing off display-only is WAY premature.


Wall Street Journal

Apple Inc. AAPL -0.22% is shaking up leadership and reordering priorities across its services, artificial intelligence, hardware and retail divisions as it works to reduce the company’s reliance on iPhone sales.

The changes, which can be traced back to last year, have included high-profile hires, noteworthy departures, meaningful promotions and consequential restructurings. They have rattled rank-and-file employees unaccustomed to frequent leadership changes and led Apple to put several projects on hold while new managers are given a chance to reassess priorities, according to people familiar with the matter.

The primary reasons for the shifts vary by division. But collectively, they reflect Apple’s efforts to transition from an iPhone-driven company into one where growth flows from services and potentially transformative technologies.

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“This is a sign the company is trying to get the formula right for the next decade,” said Gene Munster, a longtime Apple analyst and managing partner at venture-capital firm Loup Ventures. “Technology is evolving, and they need to continue to tweak their structure to be sure they’re on the right curve.”

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Apple spent $14.24 billion on research and development last year, a 23% increase from the year prior. Though it continues to work on projects in the augmented reality, autonomous vehicle and health sectors, it hasn’t yet released a major new product in those areas. Sales of its latest gadgets—Apple Watch, AirPods and HomePod—have been mixed, and none have offered the pricing power or volumes of the iPhone, one of the best-selling products in history.

Mr. Cook, who prides himself on his long-term management focus, has been anticipating the maturation of the smartphone industry since as early as 2010 and planning for how to grow as phone sales slow, former employees say. Apple this year stopped reporting the number of iPhones it sells, a move many observers interpreted as an end of the smartphone salad days.

Though the iPhone still contributes about two-thirds of Apple sales, the company has encouraged investors to focus on a growing services business, which includes streaming-music subscriptions, app-store sales and mobile payments. Services are expected to top $50 billion in sales by fiscal 2020 and contribute more than about 60% of Apple’s total revenue growth over five years, according to Morgan Stanley , which estimates the iPhone fueled 85% of growth during the prior five years.

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