"The good news for Apple is that, to the extent these errors really were predictable, there is nothing structurally different about the company’s competitive position today versus six months ago, when the current stock slide began.
Meanwhile, the company’s Services business continues to grow, along with its installed base (including in China); the company is clearly putting more strategic emphasis in this area, effectively abandoning also-ran hardware products like HomePod and Apple TV to increase the reach of its services. I would expect significant announcements in this area through 2019.
- The next iPhone hardware revision should sell better in China, simply by virtue of being new (and the implication of it being easy to switch away from iOS is that it’s easy to switch back).
- Customers still prefer Apple’s flagship iPhones, no matter how expensive they are.
- Headwinds like currency and battery replacement programs will go away, and phones, thanks to their centrality in people’s lives as well as the greater likelihood of harm, will always have a faster replacement cycle than PCs.
That is not to say the company is finished with hardware: wearables are a huge area of growth, as both AirPods and Apple Watch are big successes, and it seems likely that an augmented reality product is coming in the next few years. Nothing will match the iPhone, but that’s ok; the sky is not falling, only the stock."Apple’s Errors | Stratechery