Wolverton: Maybe we should just call the company ‘Apple Phone’

Should Apple rename itself “Apple Phone?”

I ask that with my tongue firmly planted in my cheek, of course. But if the company’s name were supposed to reflect its actual business — as it once did — you could make a strong case for tacking on that “phone.”

For years now, Apple’s overall success has been driven by the growth in sales of its iPhones. And sales of phones have comprised more than half of Apple’s sales for the last two years.

But the continued ballooning growth of its phone business — coupled with the diminishment or relative stagnation of its other product lines — has reached the point where you could say that Apple is basically a phone manufacturer that just happens to sell a few other products.

Take its most recent quarter, which Apple announced Tuesday. In the period that ended Dec. 27, Apple sold $51.2 billion worth of iPhones. Those sales comprised nearly 69 percent of the company’s total sales for the quarter — a record portion by a long shot. Indeed, Apple was so successful at selling iPhones during its first fiscal quarter that if it had sold nothing else — no iPads, no Macs, nothing — its total sales would still have been the third highest it had ever recorded.

Apple’s success clearly shows what myself and others supposed — that there was huge pent-up demand for the larger-screened iPhones that the company introduced in September. Indeed, Apple sold 74.5 million iPhones in the holiday quarter. That was not only a record number, but it was 89 percent more than the company sold in its fiscal fourth quarter of last year, and 46 percent more than it sold in the year-prior period. By contrast, in the quarter after Apple introduced the iPhone 5s in 2013, its sales only grew 7 percent compared to the prior year’s quarter.

Many of you probably remember that Apple was called Apple Computer up until 8 years ago. The name reflected the company’s operations; for a long time, Apple only made computers. Even when it diversified into personal digital assistants and music players, computers were still its primary business.

But when Apple dropped the “Computer” in its corporate name in 2007, then-CEO Steve Jobs made a cogent and concise argument: Apple was no longer just a computer company. At that time, the company’s iPods were a significant product line that in some quarters brought in more money than its Mac computers. And Apple had just introduced the iPhone and the Apple TV, devices it hoped would become major product lines in their own right.

Now the company has come full circle in a way. While it still makes other things — including a Watch that will debut soon — Apple has only one that really matters. But what a heck of a product that is.

Photo of Apple’s iPhone 6 and 6 Plus devices courtesy of the company.

 

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  • Dennch

    Should Google be called Google Search and Microsoft be called Microsoft Windows? Sorry, I don’t quite understand the point of this article.

    • Bob

      My thoughts exactly..just another hater

  • Bib

    Starbucks selling coffee,McDonalds selling burgers, facebook with advertising, etc etc. perhaps I should be writing articles. Truth is Apple has iTunes, movies, apps, phones, computers and ipay as well.

  • 4min33

    leave it to Troy to be irrelevant while trying to be irreverent.

    iPhone IS a computer-duh.

  • Tim of Philly

    It’s an interesting perspective that is shared by many that AAPL is heavily reliant on phones.

    For the moment, let’s assume this is a correct statement and the world’s largest company is just lucky. On that note, the phone business seems to be fairly solid. They’re pursuing developing nations as the next site of growth – checkout the iPhone 5C. This bombed. Horribly. With the iPhone 6, they developed what is very popular in Asian markets – the 6 Plus – a phablet “Bigger is better” over there and pursued the emerging middle class with very functional phone. Now, why would they pursue discovering the formula for emerging markets? Well, oddly enough the Bill & Melinda Gates Foundation is the best source to look to to understand – developing nations are skipping over the laptop and going straight to mobile. This makes sense – it’s easier to build cell towers than lay cable. http://www.cbronline.com/news/bill-and-melinda-gates-put-faith-in-digital-banking-4496440

    Building on that note, Apple is figuring out how to create Apple Pay. If I’m an emerging nation, I want to minimize costs – moving to a cashless society is great way to do this. Google Wallet is cumbersome – but, Apple Pay is easy. With the exception of Apple Maps, they have consistently excelled at simplicity the past 38 years.

    Now, why do I think there could be more in-depth analysis beyond phones? Simple. The basic argument has always been about the eco-system. In 2007, Jobs introduced the iPhone as 3 Devices in one. http://www.youtube.com/watch?v=t4OEsI0Sc_s So, Apple knowingly killed the iPod with the launch of the iPhone. We never saw an iCamera. Why? Because they were founded on Make It Simple. So, their eco-system could include multiple devices, but instead, they also solve a need at the same time.

    Here’s where I think folks show some concern, Steve Jobs (RIP 2011) hated big phones. In 2011, Apple was just starting to penetrate the Asian market – they were still very much delivering what North America and the U.S.A. want in their device. Keep in mind here, we’ve had desktop PCs and Macs since the 80s in Middle Class families and in most schools as well – so we have different needs than countries where, again, they’ve skipped over the earlier phases of tech innovation. What’s happened in the past three years? The emerging middle class in developing nations has money & they want to spend it. And, they want to spend on something that they can carry – iPads aren’t portable and the iPhone 5S is too small. Hence the iPhone 6 Plus. Again, remember, these nations never had the box Nokia phones we had in the 1990s – so they never felt the need to see how far they could swing the pendulum in the opposite direction of tiny.

    So…if you had capital to pretty much advertise like Coca-cola, with 100 fewer years of corporate history, why wouldn’t you deliver the product developing nations want?

    Okay, so the phone thing is a strong market proving that part of your “journalism” superficial… but what about tomorrow? Well, EU & US will likely still have a place for desktops & laptops (I couldn’t ever 100% convert to touch screen) – and that shows: +14% Mac sales (5.5m). They launched ApplePay, continue to tinker with AppleTV, and I’m sure they have a bit in their R&D labs they haven’t told us about.

    If you were already the largest company in the world (Bigger than energy, bigger than Walmart), would you really shove every idea you’re working on out the door as soon as it’s ready? No. Not if you want to be around for a long long time.

  • Phil

    Click bait headline. Waste of a smart reader’s time. That thing you call a “phone” is an unbelievably sophisticated miniature COMPUTER. But you already know that… Just sadly trolling for hits and relevancy.

  • Ignatz

    @Dennch: The reason is that those companies wouldn’t generate the advertising revenue-clicks that an Apple headline does. But in a similar vein, maybe Troy should rename his column, “Wolverton Clickbait”?

    @Troy Wolverton

    Much better would be “Apple Ecosystem”?

    As a Mac owner (a mini, if you care) as well as an iPhone 6 Plus owner (who was thus inspired to sell his year-old iPad Air), I assure you that the convenience of OS X features like Time Machine, & hardware like the wireless keyboard and Magic TrackPad, & the commitment to security and bug fixes, & the free OS upgrades with new features like a free office suite (Pages, Numbers, Keynote) and especially Continuity – (which capability alone refutes the premise of your headline, by the way), & the availability of local retail stores with very expert customer support staff (An Apple Store employee even offered to install my iPhone 6 Plus screen protector at no charge and then did it much better than I could have, even though I hadn’t bought the phone at an Apple Store.), & the fact that Apple stuff “just works”, & the fact that it all just works *together*, plus the fact that still 31% of the company’s revenue is not from iPhone sales, all show that the company is not some (iPh)one-trick pony.

    Finally, a quibble. You wrote, “And Apple had just introduced the iPhone and the Apple TV, devices it hoped would become major product lines in their own right.”

    I can’t find any reference that Apple ever expressed high expectations for Apple TV. The original iTV was announced as a work in progress. iTV’s successor, Apple TV was repeatedly referred to as a “hobby” until last year when Tim Cook said it was difficult to keep calling it a hobby because it was bringing in $1 billion in revenue. So despite your assertion quoted above, history indicates that Apple had low expectations, but they have been pleasantly surprised that it exceeded them. The product introductions can be found on youtube for you to review if you wish.

    I would ask you to write more accurate and meaningful articles in the future, but I am becoming convinced that columnists these days really only care about the clicks.

    So instead I’ll just wish you the best of luck.

    • Actually, when Apple changed dropped the “Computer” from its name, Steve Jobs cited Apple TV as one of the reasons. He did that at Macworld in January 2007. I was there and have notes from the event.

      When announcing the change in the company name, Jobs cited Apple TV as one of the new pillars of the company, along with the iPhone, the iPod and the Mac, noting that only one of those was a “computer.”

      You can view the video here (go to the 1:41:40 mark): https://www.youtube.com/watch?v=P-a_R6ewrmM

      If my notes and recollection are correct, Jobs didn’t start referring to Apple TV as a “hobby” until May of that year — a month or so after Apple TV went on sale. He dubbed it a “hobby” when speaking to Walt Mossberg at the All Things D conference, noting then (but not before) that many people had “tried and failed … to make that a business.”

      You can view that video here: https://www.youtube.com/watch?v=fkPN_U0D3CM

      • Ignatz

        Thank you, Mr. Wolverton, for your clear, open presentation of the sources that informed your opinion about Apple’s hopes for Apple TV.

        The first video you listed very clearly contains a slide that Steve Jobs used which contains Mac, iPod, Apple TV, and iPhone. From that slide, I can readily see why anyone might infer that the four product lines are coequal. His remarks for that slide are at 10:58 in Engadget’s transcript (copied below).

        However, the way that SJ then ignores Apple TV in his following remarks suggests, at least to me, that he did not have the same expectations for Apple TV that he did for Mac, iPod, and iPhone. I’d argue that if he expected big revenue from ATV, he’d have pushed it much more strongly in his carefully crafted presentation, master salesman that he is usually acknowledged to have been. He even had a slide that listed the date of introduction for each of the other three products, but, repeating myself, nothing about the ATV. This leads me to believe that the omission of ATV probably wasn’t something that just slipped his mind on stage.

        The omission of Apple TV occurs at 10:59am in the transcript, about 20-30 seconds after the 1:41:40 timestamp you cited.

        That’s how I thought I remembered the presentation. (I wasn’t there. I watched it online a few times, if i recall correctly.) And that’s why I have my opinion.

        If you continue to hold to your opinion that Apple had high expectations for Apple TV, then I’ll conclude that reasonable men may differ. It’s a shame we can’t ask Steve Jobs.

        By way of gratitude, though, for your willingness to explain your reasoning so clearly, I have refreshed this webpage numerous times in the hope that you receive extra click revenue.

        I still think your suggestion for a name-change to ‘Apple Phone Inc’ is not well-considered. I suppose we may continue to disagree on that, too.

        Good fortune,
        Ignatz

        Here is how Engadget transcribed Steve Jobs’s remarks in the relevant portion of the video.

        10:58am – “So, today we’ve added to the Mac and the iPod, we’ve added Apple TV, and now iPhone. And you know, the Mac is the only one you really think of as a computer, and we’ve thought about this and we thought, you know, maybe our name should reflect this better than it does.”

        “From this day forward we’re going to be known as Apple, Inc. We’ve dropped the computer from our name.”

        10:59am – “You know, I didn’t sleep a wink last night, I was so excited about today. We’ve been so lucky at Apple, we’ve had some real revolutionary products. The Mac in 84, the iPod in 2001, and we’re gonna do it again with the iPhone in 2007 — we’re VERY excited about this.”

        “There’s an old Wayne Gretsky quote I love — ‘I skate to where the puck is going to be, not to where it’s been.’ That’s what we try to do at Apple. Thank you very, very much.” Huge, huge applause, standing ovation.

  • RDR

    Well, while we’re at it, isn’t “phone” a pretty retro title/category for these multifunction mobile computing, entertainment and communication devices?

 
 
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