iPhone Still Has 5-7 More Years of Relevance: Munson
As of December 2012, 54% of U.S. mobile users owned a smartphone. That works out to 125.9 million American smartphone owners, according to comScore. This staggering statistic is why Lee Munson, chief investment officer at Portfolio LLC, says the gadget, once owned by the tech savvy among us, is now a universal commodity.
But there's a catch. Munson believes smartphones have saturated the consumer marketplace, therefore old giants like Blackberry (BBRY), Nokia (NOK), Samsung (SSNLF) are struggling to grow. Apple (AAPL) on the other hand, has a hold on the upper end consumer, allowing continued dominance in the space. In the most recent quarter, Apple sold 37.4 million iphones compared to 35.1 million during the same quarter last year.
“I do think there’s a little special part for iPhones,” Munson argues, “mainly because it’s a brand, it appeals to wealthier people. It’s like a Ferrari – would you call a Ferrari a commodity just because it’s a car?”
Still, it’s not just the iPhone’s customer that sets it apart according to Munson. It’s Apples proven ability to succeed at creating not just a good piece of hardware, but one that fits perfectly into a broader ecosystem. In this case iTunes and iOS.
“People that have an iPhone are there for a particular experience and everybody else is a sloppy second,” says Munson.
While Apple continues to find success with its brand, not to be confused with its stock price, Munson agrees that we are "post peak on the mania of smartphones" and that it’s time for the brass in Cupertino to start innovating again.
“I don’t think that Apple is gonna come out with an iWatch or iGoggles or something,” Munson suggests adding, “you are dealing with something where you still have an iPhone that has a great brand and a competitive advantage, but it still has a lifespan. I think between five and seven years.”
What comes after that is anyone’s guess right now, but Munson likens it to the current trend of computers and other connected devices slowly replacing the television.
