Apple's iPhone will become irrelevant one day.  Here's how it happens.

Apple’s iPhone will become irrelevant one day. Here’s how it happens.

  • The iPhone has become “non-fungible infrastructure,” says columnist Michael Gartenberg.
  • The device and its services are so popular with users that they can never be replaced.
  • But he says a rival will dethrone him one day. Here’s how to see the signs of this change.

The iPhone — along with iOS and the App Store — has kept this going Dominant position in the mobile phone industry For a long time, it achieved the status of what is known as “non-fungible infrastructure”.

A non-fungible infrastructure is something that users hold so strongly, that a competitor can’t convince them to replace. It has the following characteristics:

  • High conversion costs for replacement.
  • Total or near complete consolidation within an enterprise or market.
  • Strong support from third parties and suppliers.
  • Functions as an essential underlying technology for other services and applications.

The New Jersey Turnpike is non-fungible infrastructure. Not likely, even with the help of a few billionaires building high-speed underground tunnels, that I’d stop driving on it. Coca-Cola and Pepsi are examples of fungible infrastructure. I can drink Diet Coke in the morning and Pepsi that afternoon. There is no cost to brand loyalties (except I always conclude Coca-Cola tastes better).

Today, Apple is building on the image of being the “safe choice” of users. It’s created for them a positive feedback loop that leads their customers further into their infrastructure: They buy other devices designed to work better with Apple devices like the Apple Watch and AirPods, along with Apple services like Apple Music and Apple TV+.

Many say the strength of the Apple ecosystem of hardware and operating systems The services are all linked together With the power of the App Store, it is unstoppable. Since no competitor today can dethrone Apple’s market position, they say it will only get stronger over time.

Despite this, it is inevitable that the iPhone and the Apple ecosystem will be replaced by something else.

The rise and fall of empires, from the Egyptians and Romans to the Ottomans and British to tech empires like IBM or Microsoft.

That’s an imperfect metaphor, I know. Apple will not cease to exist, nor will IBM or Microsoft. Yet the latter two, while powerful and profitable, don’t have nearly as much of the dominant market or idea-sharing hubs they once did. No one is suggesting we break up IBM or Microsoft like they are defending Apple these days.

To explain how Apple will fall, I offer a framework for how technology cycles, a cycle that has validated a variety of technical innovations, from refrigeration to audio technologies.

Technology changes over time and goes through five phases:

  1. Multiple companies produce different technologies that serve the same user needs.
  2. Market forces give rise to a single standard as an irreplaceable infrastructure. Often, it is not the best technology that wins market adoption.
  3. This standard is attacked by pseudo-competitors who imitate it but do not effectively solve it, where the pseudo-competitors do not provide meaningful enough differentiation or have different drawbacks than the technology they are trying to displace. (But pseudo-competitors are often valuable enough to survive and coexist alongside the dominant technology.)
  4. Standard emerges stronger than before and seems invincible in displacement.
  5. New and better technology emerges and replaces the current standard.

iOS is in the fourth stage. It has achieved dominance and share ideas despite being challenged by the Android operating system and a host of devices from the likes of Google and Samsung.

To replace the juggernaut Apple, any new technology brought to market must meet the following criteria:

  1. It must provide visible and demonstrable differentiation and value that end users can directly exploit. One of the reasons why the iPhone replaced foldable phones was that it had a real browser and touch screen with zoom. It made using the Internet seem more like you were on a computer than on a mobile phone.
  2. It must offer economic benefits to the sellers market. The iPhone introduced apps, which is a whole new market for new and existing developers.
  3. It must provide clear economic benefits to hardware vendors. If the first two conditions are met, hardware vendors have a strong incentive to build systems to take advantage of new technology and drive upgrades.

I’m not going to try to predict what will eventually replace the Apple “i” ecosystem. This is a fool’s job. No one expected the rise and rebirth of Apple under the leadership of Steve Jobs. Nobody predicted the iPod and its impact on Apple sales. Certainly, no one predicted the iPhone and its impact on the industry.

Some even received them iPhone with great doubt And more than a little irony.

But as chips get more powerful, network speeds increase, and AI gets smarter, the technology that toppled the iPhone could already be there in nascent form. The bigger question is: Will it be Apple that produces it?

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