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Apple’s new phone won’t blow you away – but it doesn’t need to

The other big rumour is that the new iPhones will be able to charge Apple Watches or AirPods wirelessly. But again, if you want to see it in action, all you have to do is get your hands on a Samsung Galaxy S10, which already has a feature called “Wireless Powershare”.

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Indeed, Samsung, Huawei (and others) have gone further – well beyond anything Apple is likely to announce, trying to reimagine the smartphone market altogether.

Think of the Samsung Fold, with its extraordinary screen, and the 5G chips built into it and other makes. Amazingly, Apple’s new phones will not be able to get on the superfast 5G mobile data networks that are being rolled out worldwide.

In effect they will be out of date from the moment you take them out of the box.

Should shareholders be concerned that the best days of a product which is so central to Apple – and its stock price – are over? Two-thirds of Apple sales have come from iPhones in the 12 years since the first model launched. And phone sales have been declining in the past few years. The analyst Stephen McBride make comparisons with Sony, which had two incredibly successful products (the Walkman and PlayStation) and experienced the same repeated doubling and triplings of its share price in the Nineties (when Apple was deep in the doldrums) that Apple has revelled in since 2007.

Without magical new products since then, however, it is Sony’s stock that has been becalmed.

But I do not think Apple is poisoned, and for two reasons.

The first is that it has never actually been about cutting edge technology for its own sake. It has been about making a product (and increasingly an ecosystem of interlinked products) that are stylish and simple to use.

Second, the smartphone race is almost run. In 2007, no one had a smartphone. Now billions do. More than three quarters of us in advanced economies; almost half in emerging economies, according to Pew Centre Research. And for the crucial 18 to 34 age segment, those figures rise dramatically.

Almost 90 per cent of young people in Brazil have a smartphone. Two-thirds do in Indonesia.

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Even in India, the big market still to capture, almost 40 per cent already have a smartphone. Tim Cook may, like Alexander the Great, weep because there are no worlds left to conquer, but that is not a problem confined to Apple.

Rather, the conundrum of how to make money in a smartphone-saturated world is common to all manufacturers. And here one of the most celebrated stories in tech offers a lesson.

It is about IBM, which in 1980 was focused on the market for personal computers – so focused, in fact, that it let a couple of shaggy-haired programmers provide their per cent operating system. The pair were called Paul Allen and Bill Gates. Soon Microsoft was providing the software not just for IBM but for a host of manufacturers. Intangible software, not tangible hardware, was what mattered.

Today, Microsoft is the world’s biggest company by market cap. Indeed almost all of the world’s top 10 trade in intangibles. Ten years ago, according to PWC, the biggest company was Exxon, trading the most tangible asset of all, oil. Even so it was comparatively tiny – worth a third of what Microsoft is today. And now it has slipped from the S&P top 10 for the first time since that index was created in 1957.

Software and services allow companies to scale without drag. In fact they get better as they get bigger. And Apple, from health to banking, has – through its simple, stylish hardware – created brand loyalty for interlinked services. That’s why people want its payment card despite the availability of better alternatives.

Apple's rivals are leading the way on technology.

Apple’s rivals are leading the way on technology.Credit:Bloomberg

Lastly, there’s always the possibility that Apple does pull a revolutionary new product out of the hat. Devotees, wrongly, expect one every year. That doesn’t mean realists shouldn’t expect one eventually. Today, the area that is ripest for the stylish and simple treatment is augmented reality. And if Apple reveals a piece of game-changing AR kit, then it won’t matter if its rivals produce a smartphone screen you can fold into an origami swan.

Telegraph, London

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