Yesterday Philip Baeten wrote a really fantastic post for A New Take, evaluating the possibility a second ‘dot-com bubble‘ with the rapid growth of Apple and Google. It really is a must-read.
The problem some economists see is that giant tech companies such as these won’t be able to maintain this immense growth in the future. There seems to be a general disbelief of the continued future growth of technology companies, especially with knowledge of the gloomy past lingering in the back of people’s minds. After all, history has shown multiple times that unhindered growth at such a rate is nigh on impossible. At some point, growth will stop or decline sharply.
Apple and Google along with everyone in the mobile space still have a lot of room to grow though, I think. According to Horace Dediu of Asymco, as of November 2011 the smartphone market has now reached over 30% of shipments within the whole phone market, with 69% still resigned to “dumb phones”. That is an insane number which I think we often ignore in our common world-view saturated with iPhones, Droids and the like. Apple and Google still have an awful lot of room to grow into the market currently held by dumb phones.
I think Apple are working hard to penetrate this market by maintaining availability of the iPhone 3GS for free on contract, and with Tim Cook at the helm improving operations to reduce costs breaking into emerging markets is going to become a larger priority than ever before. They don’t want to find themselves in the same position as RIM though, and I don’t think they will, because they know to innovate, as Philip says.
I also think John Gruber is right with his recent comments on The Talk Show that the opinions of writers in the media about Apple are coloured by their first impressions of the company and its beginnings as a computer company rather than a consumer electronics company. The same may apply to Wall Street analysts, worried that Apple can’t continue their fantastic growth. I tend to disagree.
May 11, 2012