Apple is silently transitioning into the disappearing computer paradigm as their smart home and wearable category grew almost 50% year over year. With an absolute revenue growth of $1.2 billion (from Q3 2018 to Q3 2019) wearables almost surpassed Apple services, which grew with $1.5 billion. In terms of yearly unit sales, wearables have already outpaced the Mac and iPad with 70 million devices per year. Interestingly, most analysts have looked at smart watches and wireless earbuds as independent wearable categories. However, when bundled together it seems that the wearable category is gaining steam in comparison with Apple’s other revenue streams. In response, we see competitors lose momentum.
What does this mean?
As written before, Apple seems to gradually transition into the ‘disappearing computer’ paradigm. This may not be clear to everyone as prior personal computers (PC, laptops, smartphones) were bought and updated as one integrated system, whereas the disappearing computer is slowly emerging with each new wearable or smart home component. This development is further obscured as these devices are currently sold as peripherals for the smartphone, hiding in plain sight as watches and headphones. However, the launch of a visual wearable accompanied by a high-bandwidth multi-modal user interface could become the keystone in manifesting the upcoming silent smartphone killer.
Some sources expect that Apple is launching a pair of glasses in 2020, now under development under the project code named ‘T288’. However, looking at the state of current technology, we might not get fully-fledged AR glasses immediately. Instead, we could expect the launch of a pair of fashionable smart glasses, that will complement the iPhone by just super-imposing mission critical information (e.g. notifications, turn-by-turn directions). However, as technology (e.g. AI, input devices, optical tech, 5G, edge & fog computing, battery technology) and the Apple ecosystem improve (e.g. Siri, third party service interoperability and integration), the smartphone could become more and more obsolete as it is being replaced by the next AR-driven personal computing platform.