Where would Apple go next?

A few days ago, I came across a LinkedIn post by Linas Beliūnas about Artificial Apple Products by Midjourney AI. This got me into thinking about where Apple would foray next.

Apple and the Attention Economy:

Steve Jobs resurrected Apple by pivoting from the Computing Economy to the Attention Economy (iPod, iPhone, iPad, etc.). With the announcement and impending release of Vision Pro (My LinkedIn Article), Apple’s foray into the Attention Economy has travelled the full distance. Whether Vision Pro succeeds or fails, Apple does not have anymore runway in the Attention Economy and will have to pivot once again, to Utility Economy (based on user needs) and beyond.

The Attention Economy (Social Media, Digital gaming, Streaming Services, etc.) runs into one huge roadblock – the amount of free time and attention available in a day that can be spent on these services. It’s going to be very difficult to go down this path any further as even if people have the desire to purchase and have the money to buy any more products that serve as portals to the attention realm, they will be constrained by the lack of available free time and attention.

According to CNN as quoted by techjury, the average American spends about 10 hours, 39 minutes of on-screen time every day (This includes time spent on smartphones, tablets, video games, personal computers, multimedia devices, TVs, radios, DVRs, and DVDs). According to ZDNet as quoted by techjury, Americans spend an average screen time of 5.4 hours on their mobile phones daily. That’s an astonishing amount of time spent on on-screen activities per day.

Free attention/ time for Apple’s existing customers will get exhausted very soon. Any further push would only cannibalize time spent on existing categories of Apple devices – time spent on Apple Vision Pro would come at the expense of time spent on other Apple devices such as iPhone or iPad.

As quoted in Time, a 2018 study found that young people who spend seven hours or more a day interacting with screens are twice as likely to be diagnosed with depression or anxiety as those who use screens more moderately. The backlash against Facebook about the toxic effects of Instagram usage on teenage girls shows the dangers of pushing further and further in monetizing user attention. So, Apple will have to find new avenues of growth built around actual customer needs (utility) like self-driving cars, e-bikes, consumer electronics, household durables, personal healthcare devices, etc.

As the categories that Apple dominate and helped to make it a $3 Trillion behemoth such as iPhone and iPads become mature categories, Apple will actively foray into the Utility or Real Needs Economy. In fact, the process is already underway - products such as Watch, AirPods, AirTag, etc. signal Apple’s pivot to Utility Economy. Apple will continue to make incremental innovations in the Attention Economy just as does in the Computing Economy now, but actively enter new product categories in the Utility Economy and beyond.

Over the last 20 years or so, as number of standalone gadgets and tools such as alarm clock, calendar, torch light, camera, post-it notes, radio, music players, etc. have become apps on smartphones. Apple was at the forefront of this shift and actively enabled it with its App Store. Now as Apple pivots into the Utility Economy, the reverse process will happen – rather than just provide Apps to control devices, Apple will start entering some of the most attractive device categories with its own products.  

From Walled Garden to Walled City:

As Apple pivots from innovating for the Attention Economy to the Utility Economy and beyond, it’s economic empire would stop being a Walled Garden (for recreation) but soon morph into a Walled City (for real uses). It will not just design, produce and market devices, content, and services that its customers use to spend their free time. It will design, produce, and market devices and services that its customers use to fulfil their everyday needs and wants. And in the process, it will start to take ever larger chunks of disposable income from its customers – through products and services as well as commissions from developers and other service providers for accessing and selling to its customers.

Which company is best positioned to design a car for Apple customers? Ans: Apple. Which company is best positioned to design air conditioner and heating system for Apple customers? Ans: Apple. Which company is best positioned to design a refrigerator for Apple customers? Ans: Apple. Over the next twenty years or so, Apple would transition from designing digital devices and digital experiences to creating all high-value devices and experiences for affluent households. In short, it would become the mediator and its devices and services would become the conduits for affluent lifestyle: Apple would become the Lifestyle Brand for affluent households.

Time for one more Pivot:

Getting people to spend additional time on services to capture user attention beyond a certain point is difficult. As affluent customers in developed markets exhaust their everyday quota of free time and attention, it has important implication for digital empires such as Apple, Google, Facebook, and Netflix that have built their fortunes around the ‘Attention Economy.’   

Apple is best positioned to pivot once again – 1) it has the brand recognition to excite potential customers whenever it enters a new category, 2) It has capabilities across the computing stack (including designing processors) and 3) product and services design capabilities.

Apple has the option of becoming a component (processor) supplier to other players in different industries (consumer durables, TVs, etc.). But it has not taken this route in the past and is unlikely to take this route in the future. It prefers to own the customer touch points and the customer relationships from the front and would never fade away behind the hood.

2026 is the 25th anniversary of the iPod announcement and 2027 is the 20th anniversary of the iPhone announcement. I don’t think the flagship announcements from Apple in both these years will be yet another version of iPhone or any other devices meant for the Attention Economy. The flagship announcement would be an entry into a new category altogether most likely Apple’s entry into EV market.     

Disclaimer: The statements, views, or opinions expressed in this article represent my own views and not those of my employer.