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The battle for owning the "digital spaces" - the true iPhone6S story

"Apple, ranked the most valuable brand in the world for the last five years continues to battle falling market share in most countries apart from China in a cut-throat competitive space (1).

"Yet the profitability of the Apple iPhone range remains a phenomenon of modern commercial economics sustained by a powerfully brand, engineering and consumer design approach that competitors try to emulate but still cannot beat in a straight comparison for user experience and seamless function and form. What is at stake is the ability to carve out and own the "next big thing" of "owning the digital spaces" that consumers and business work, live and play in the modern digital society.

"The latest iPhone 6S and the new OS9.0 operating system release is significant in three areas when we consider the true reasons behind this latest release.

"Apple can still afford to play catch-up with functions, the upgrade of the front and back cameras to 5 and 12 megapixels and even the 3D haptic touch feature while improved usability is still consolidating the usability of the brand rather than anything truly innovative.

"The OS9.0 release is more significant in pushing new boundaries of personalization with Siri “getting to know you better” to provide greater contextual services. This is the new “personal data” market that will increasingly add more value and sales opportunities to Apple and its ecosystem of partners to “better server your needs”. It is also linked to and disappointing they delayed OS9.0 version two update to the Apple Watch that is currently strongly integrated to the iPhone because this will allow 3rd party features to be displayed and interactive on your watch. Apple and many mobile players are still struggling to grasp and define platforms that will make the “Internet of things” work but creating this addressable market has huge potential for the digital economy of 2020 and beyond.

"Lastly but most interesting is the commercial shift in Apple offering in the US market a subscription service to replace and upgrade your iPhone every year. I’ve long seen the telecoms market commercial two year contracts as seemingly at odds with the yearly or less new product launches.

"Apple is big enough to take on and redefine the “rules of the road” in this area too and will force the resellers and telecoms to re-examine their strategies for customer subscriptions and push more multi-service bundling by them to differentiate themselves from customers who are tempted to buy and subscribe direct with Apple, cutting out the middle man.

"What is at stake is the loss of business not just form the volume of competing mobile gadgets choice but being "disintermediates" out of the emerging digital markets that are now driven by smart devices, sensors, wearables making smarter products, smarter living spaces and travel that will define the world in 2022 and beyond."

Mark Skilton, Professor of Practice in Information Systems & Management, Warwick Business School

1. Kantar smartphone market survey March 2015 http://www.kantarworldpanel.com/global/News/Chinese-New-Year-brings-a-new-

For further details please contact Nicola Jones, Communications Manager, University of Warwick 07824 540863 or N.Jones.1@warwick.ac.uk