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Apple Now Needs a 'Killer Product'
World Economy

Apple Now Needs a 'Killer Product'

Apple successively redefined the MP3 player market with the iPod, smartphone market with the iPhone, and portable computer market with the iPad. Now, faced with growing competition, it needs a new 'killer product.'

For years, Apple has dominated the premium end of consumer computing markets with gadgets that redefined their product class - iPod, iPhone, iPad. The company's highbrow design ethos has given it an exceptionally loyal following, DW said in its report on Tuesday.

"Apple doesn't invent new product categories," Berlin-based communications designer Martin Dorken said. "Apple picks a consumer electronics technology, makes a top-end version, and sells it at a premium. Recently, they've put a lot of money into "smart home" systems - so you'll be able to control your house remotely from your smartphone.

"But with Google, Facebook, Amazon, Sony, and Samsung all sitting on huge piles of investable cash, looking for the next big thing, Apple isn't the only company contesting the premium niches anymore."

Market Share 

Apple's smartphone and tablet market shares are declining. The bulk of global consumer electronics growth is occurring in emerging markets in Asia and Latin America, where fewer customers can afford Apple's high-priced gadgets. Apple's share of global smartphone sales in Q2 2014 was only 11.9 percent, down 1.5 percent from Q2 2013.

But Apple isn't interested in selling hundreds of millions of cheap gadgets - it would rather sell tens of millions of expensive ones.

"Apple doesn't care what its market share is as long as it wins as close to 100 percent as possible of the most profitable share of the market," Jim Edwards, technology columnist for Business Insider, said.

But competitors have emerged with premium smartphones and tablets that are better in important ways than Apple's expensive offerings.

Samsung and HTC, in particular, have taken direct aim at the premium smartphone segment with their Galaxy and HTC One phones. Both have featured larger, more user-friendly screens than the iPhone in recent years – which is why the iPhone 6, to be unveiled this week, is expected to feature a bigger, better screen than did the iPhone 5.

Ultimately, however, the more important competition may be on the software front.

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