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Digital Hub Strategy 2.0: Apple’s next era of innovation

Sajan Mathew
15th Sep 2016
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RIP, headphone jack. Apple's courage to remove the conventional 3.5-millimetre headphone jack from the iPhone did not please many fans across the globe. In addition to this, the design and usability of the new wireless earphones, AirPods, have greatly been criticised. iPhone 7 has also failed to click with the fans. It almost appears to be like a repackaged iPhone 6 with the headphone jack covered with a plug, a brighter display, stereo speakers and water-dust-resistance. Apple Watch series 2 is also not impressive enough.

Apple’s-next-era-of-innovation

Overall, Apple has just been giving an incremental boost to the tech specs of its products and cleverly marketing the imitated features of the competitor's products. But why did Apple decide to remove the headphone jack and introduce new wireless earphones? Are there no wireless earphones available in the market? Or has Apple, one of the most inspirational and innovative brands in the world, stopped innovating?

Apple’s Digital Hub Strategy 1.0:

Apple has produced some of the most revolutionary products the world has ever seen. Its products are not just aesthetically beautiful, but also the experience associated make them highly desirable. Over the years, Apple has seamlessly integrated its array of products and services making it difficult for the users to pull away and remain locked in its ecosystem. On a quick scan of Apple's current portfolio of products and services, we can see a mix of hardware and software-based products. In simpler terms, it has created content stores and devices to consume content. Steve Jobs envisioned this world more than a decade ago when he unveiled Apple’s Digital Hub Strategy in 2001.

"We are living in a new digital lifestyle with an explosion of digital devices. It's huge enough for any one. And we believe the PC, or more importantly, the Mac, can become the digital hub of our new emerging digital lifestyle, with the ability to add tremendous value to other digital devices," Jobs had said.

Jobs unveiled iPod in 2001, the very first device of Apple's walled ecosystem. And then in 2003, iTunes. Both these products were so groundbreaking and revolutionary that the whole world got bought into it. iPod could access the music available on iTunes only through Apple computers. This barred non-Apple computer users from experiencing iPod and iTunes. So to grow the lead over the competitors, Apple introduced iTunes for Windows. We can see this strategy even today with Mac Mini, a compact desktop computer that converts any PC into an iMac. Apple further expanded this pie by introducing iPod Mini and iPod Shuffle. In 2007, Apple launched the iPhone, a revolutionary product with a touch interface and Apple TV and, subsequently, the App Store. It continued to replicate the success mantra of creating content stores and devices to consume content across different verticals and build a walled ecosystem of products and services.

Apple’s Digital Hub Strategy 2.0:

Apple has reached the point where going forward, it is highly unlikely that it would come up with any ground-breaking products like iPhone or iPad. It has essentially completed the first layer of devices of its digital lifestyle hub. However, the advancement in the flexible and curved screen technology makes it difficult to rule out that Apple wouldn't launch a hybrid device between iPad and iPhone. If it does, it might jeopardise the sales of their iconic products, iPhone, and iPad. What is more likely to happen with curved and flexible screen technology is that it might introduce iPhone and iPad in new form factors.

Apple's next era of innovation starts with digital lifestyle hub 2.0, which will comprise of peripheral devices that will enable the user to create content and enhance their experience around content consumption on their devices.

AirPods

AirPods is probably the first peripheral device of the emerging Internet of Things (IoT) era of Apple. The design of AirPods is not very enticing but the underlying technology that seamlessly connects to Apple devices and Siri will open up new possibilities. A simple future use case of AirPods could be like you can use Airpods to watch videos silently on your Apple TV or talk to the refrigerator at your home, which is connected to your iPhone through Apple HomeKit.

Project Titan (Apple Car)

Apple, for a long time, has been secretly working on a self-driving car project, Titan. Though everything is still under wraps, it is highly unlikely that Apple will manufacture a car. Software is the new hardware. Apple would possibly partner with a leading electric car manufacturer and power the vehicles with its self-driving car software. Its software would seamlessly connect to your Apple devices and provide you access to a variety of content to consume while you are traveling. Apple would generate revenue through in-car media consumption, value-added services, and infotainment solutions.

Apple Camera

With iPhone 6 Apple has been pushing hard on the capabilities of the iPhone cameras. Even the advertisements for iPhone 6 conveyed how iPhone 6 enables the users to take high-quality photographs. Apple has pushed even further on camera capabilities with iPhone7 and 7 Plus. Lately, Apple has also filed numerous camera patents including 3D photography and interchangeable camera lens. In the near future, it can possibly launch a handheld camera similar to Samsung 360 or LG 360 to enable the users to create VR content or maybe a camera attachment that you can clip onto your iPhone and record 360-degree videos.

Apple VR/AR Headset

Apple is said to be also working on a VR/AR headsets. When the VR/AR content creators start populating VR/AR content on iTunes, App Store, and Apple TV, a headset something like Oculus rift or maybe even a simpler headset like Samsung VRGear could be sold alongside Apple TV and other Apple devices. Apple has the software power. It will continue to create software products that enable you to create VR/AR content, which will then push you to consume it on their devices.

Apple Fitness Gears

Apple's sports watch with Nike+ is a clear indication of its interest in fitness gears. The latest Apple Watch 2 Nike+ is embedded with advanced sensors including heart rate sensors. In future, Apple may continue to partner with Nike, which is known for high-quality sports gears, to produce Apple fitness wearables such as shoes, wrist bands, arm bands etc. Again to view your health and fitness data, you would need an Apple device.

Even though iPhone 7 is not very impressive, loyal Apple fans would still buy it by paying a premium because they are already locked into the closed ecosystem. As Apple matures in the IoT space, it will continue to lock you further into its system by connecting your outside activities to your Apple devices. HomeKit is an answer to show how Apple is entering into smarthome space. It is too early to speculate if Apple's closed ecosystem strategy will continue to benefit it but it has been successful in building the walled device ecosystem.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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