Apple World Today News Update: March 22, 2018

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Today's Apple World Today News Update podcast has news on where Apple's future revenue growth will come from, a unique proof-of-concept app that wants to make it easier to assemble IKEA furniture, and a rumor about trial production of this year's iPhones:

  • Morgan Stanley analyst Katy Huberty sees Apple's future revenue growth coming not from iPhones, but from services and wearables
  • A developer has created a proof-of-concept AR app that could make it easier to understand those sometimes nebulous IKEA furniture assembly instructions
  • Rumors! Trial product of this year's three iPhones could start as early as June

The text version of the podcast can be read below. To listen to the podcast here, click the play button on the player below. Apple News readers need to visit Apple World Today in order to listen to the podcast.

Text Version

This is Steve Sande for Apple World Today, and you’re listening to the AWT News Update podcast for Thursday, March 22, 2018. 

Wall Street analysts are the next best thing to fortune tellers gazing into crystal balls to foretell the future, and they’re usually just as inaccurate. Morgan Stanley’s Katy Huberty is usually better than the rest, and today she said that she thinks that the future of Apple is shifting away from a reliance on the iPhone for revenues. What’s going to drive Apple’s financial fortunes? Monetizing its services, such as Apple TV, iCloud, iTunes, the App Store, and so on. Huberty estimates that about 60 percent of Apple’s revenue growth at the present time is attributable to services. The other big driver of revenues will be wearables like the Apple Watch and, although she doesn’t say anything about it, augmented reality eyewear. Huberty’s counting on many of Apple’s users — most of whom don’t subscribe to services at the present time — to start spending. Only about 18 percent of Apple’s total device installed base currently pay for services, so there’s a lot of room for growth. Average spending per device is about $30, with Huberty estimating that active users spend closer to $60/device and the potential for average spending to rise to over $100 per device. The biggest opportunities are in Apple Music, which only 2.9% of Apple users subscribe to, iCloud, and Apple Pay. Apple’s touchless pay system is currently in 50 percent of US retail facilities, and usage is low. If it catches on, which many analysts believe will happen, Apple Pay could be a huge addition to Apple’s bottom line. 

Have you ever bought furniture from worldwide home accessories retailer IKEA, only to have hours of frustration assembling the furniture? IKEA’s instructions, which use diagrams and layouts without words to try to explain how to assemble tables, chairs, bookshelves and the like, have become a bit of a joke. There are even companies that have sprung up offering to assemble your newly purchased IKEA furniture for you…for a fee. Well, developer Adam Pickard has created a proof-of-concept augmented reality app called AssembleAR that shows how AR can innovate instruction manuals. Pickard designed AssembleAR to use the diagrams and layouts of the paper IKEA manuals, but adds animations and life-size references that help to simplify self-assembly. There’s no word on whether or not AssembleAR will ever become a real product, but it’s certainly captured the attention of more than a few people who have battled with IKEA furniture.

It’s only March, but expect the silly season of iPhone rumors to launch in earnest in the next few months. A report from the usually-inaccurate DigiTimes says that Apple will begin trial production of its 2018 iPhone lineup in the June timeframe, which could help the company work out issues with adding the TrueDepth camera used in FaceID to all of the new iPhones. Last year’s launch of the iPhone X was delayed to November after it was rumored that suppliers had problems making the dot projector that generates a face depth map work properly. Rumors have it that there will be three new iPhones this fall, all equipped with TrueDepth and FaceID. One will allegedly have a 5.8-inch OLED display like that on the iPhone X, another will supposedly go big with a 6.5-inch OLED display — kind of a super iPhone X — while a third will have a 6.1-inch LCD display to provide iPhone X-like capabilities in a much less expensive phone.

That’s all the news for today - join me tomorrow afternoon for another edition of the AWT News Update.