Has Apple lost the plot?

Apple’s most recent product launch demonstrated the challenges the tech giant now faces, particularly when it comes to media. Research The Media’s Richard Marks is worried.

I’m an Apple loyalist and have been for a number of years now. On the rare occasions I have to use a windows-based PC, I feel like a participant in one of those reality TV shows where they put chefs in a 19th Century kitchen.

However, the recent iPhone launch – coinciding with an early look at the latest wave of data from Mediatel’s Connected Screens survey – amplified a question that has been at the back of my mind for a while now: has Apple lost the plot?

More specifically, when it comes to TV and video has Apple ever known what the plot is in the first place?

There are three key elements to my concern for Apple’s future: product innovation, trends in how we consume media and the growth of hybrid services.

Essential to Apple’s market positioning is being seen to have superior technology and continuing to innovate. However, the recent unveiling of the new iPhones exemplified a number of worrying recent trends.

As Apple’s Craig Federigh worked hard to get the viewing audience excited about talking animal emojis, viewers may have wondered at what point Apple stopped launching game-changing technology and fell into the pattern of ‘me too’ products.

Keeping up with rivals is not what gained Apple its reputation. Apple Music is an obvious attempt to rival Spotify in the streaming music market. Meanwhile, by the time the Apple HomePod speaker system is launched in December there will be four Voice Assistant units on the market, despite Apple having led the way on voice control with Siri five years ago.

Apple has also launched a £1,000 smartphone. It would seem that at some point – perhaps around the launch of the Apple Watch – Apple fell into the trap of making expensive fashion accessories for show-offs, rather than pragmatic tech. Making the back of the iPhone 8 from glass makes it sleek but also more difficult and expensive to repair. Bling over durability?

The challenge for all smartphone manufacturers is that despite each new smartphone launch, the rate of obvious improvement has slowed down. There were significant leaps between early models in terms of functionality and design, but now smartphone technology has levelled up and arguably the iPhone’s price point becomes less justifiable, because it is less obviously superior.

It’s better, but is it that much better? Meanwhile it would appear that consumers are in less of a hurry to upgrade than before.

In this context the Connected Screens data makes fascinating reading. 2,000 UK adults in broadband homes are interviewed each wave and Android phones have always been more commonly used by respondents than iOS, but spread across a number of models.

However, for the first time, Samsung now actually leads Apple as the leading single brand of smartphone used in the UK. Is this an inflexion point?

The other significant challenge for Apple is how we are consuming media content nowadays.

Apple’s iTunes led the way in establishing a commercial model to enable people to buy and keep audio and video files. iTunes saved the music industry from the spectre of piracy but in the process effectively monopolised the music download market for more than a decade.

However, as broadband speeds have increased, streaming is becoming the default and the paid download market is declining dramatically, with consumers moving to an OTT model for VOD that Apple is far less able to control.

We are rapidly leaving the era of consumers ‘owning’ content, for an ‘access’ era in which subscription services like Netflix for video and Spotify for audio lead the way. Apple is desperately trying to catch up with products like Apple Music: a ‘me too’ product resulting from acquisition, not innovation.

Meanwhile, Apple’s iTunes has degenerated into a complex and bewildering interface seemingly designed to hold hostage our downloaded files.

iTunes does still dominate paid downloads, but regular usage for video content is now tiny in comparison to SVOD services. Meanwhile, the BBC Store concept is so unsuccessful that it is about to close after two years, revealing not just a lack of interest in digital ownership but also the flaws of the pay-to-own method.

As I highlighted in a recent column, the BBC will have to refund every single purchase ever made.

As we continue to enjoy the hype around the ‘Platinum Age’ of television, it remains a medium that Apple continues to fundamentally misunderstand. This has handicapped its ability to get any foothold in the world’s most dominant medium, let alone innovate.

So long as Apple execs continue to believe – as Tim Cook has claimed – that broadcast television is somehow ‘broken’ and they are here to fix it, they completely ignore what makes television strong in the first place.

Rumours have abounded for many years that Apple would develop an actual TV screen, not just their underwhelming Apple TV boxes. That may now never happen.

A decade ago, Apple could well have revolutionised TV sets and made a game-changing play, as they did with mobile devices. However, TV set design has evolved to the point that it’s hard to see what Apple could improve to justify the inevitable high price point.

So Apple is left trumpeting the upgrading of Apple TV boxes to 4K. Once again, catching up rather than innovating.

The final problem for Apple when it comes to media is fundamentally a cultural one. Up to now Apple’s approach has been primarily about building a lucrative walled garden – their technology on their devices. Umberto Eco once compared Apple to the catholic church in terms of its belief in the one true way and the fidelity of its believers.

However, the direction of travel in media is now more towards hybrid services: Amazon Alexa imbedded in a Samsung TV, Netflix in a Virgin box, Spotify via an Amazon Echo. Culturally, that is not a world Apple is used to.

It may be that to continue to thrive, Apple will need to loosen up and acknowledge it can be a player in a hybrid world, as opposing to seek to replicate that world in parallel.

Apple may have reached the end of an era, but they have certainly regrouped before. I remain an Apple loyalist, largely as their products are so integrated it would take an immense amount of effort to transplant myself elsewhere – the digital equivalent of moving house.

This integration ensures the long term future of Apple. What is in doubt is their continued ability to actually lead the way, particularly in media.