For years, Apple Inc. has faced the pressing question of what its next blockbuster product will be. Investors and customers alike have been eager for a new device that could match the revenue-generating potential of the iPhone, which remains the cornerstone of Apple's product ecosystem. With over a billion iPhones in use globally, this smartphone generates more than $200 billion annually, accounting for over half of Apple's total revenue and driving an additional $100 billion in services and accessory sales.
Despite efforts over the past 15 years to diversify with new product categories, such as the iPad and wearables, none have reached the iPhone's scale. The iPad contributes over $25 billion annually, while wearables and home products generate about $40 billion. Realistically, there may never be another Apple product that matches the iPhone's revenue. The company is essentially an "iPhone company," with other products serving as accessories.
Apple must find new growth avenues as the iPhone's sales growth plateaus. This could involve launching several new product categories on par with the iPad, Mac, or Apple Watch. The Vision Pro, initially hoped to be a hit like the Apple Watch, may not fulfill these expectations. However, a broader range of Vision wearables, including smart glasses and AR headsets, could potentially become a $25 billion business.
AirPods, introduced in 2016, present another opportunity. Currently generating $10-15 billion annually, AirPods could expand into a larger category with health integrations and advanced features. The product line has already grown to four models, with prices reaching $550.
The smart home sector also holds promise. Apple plans to introduce a smart display and a high-end home hub with a robotic arm, potentially increasing its influence in the home market. Additionally, Apple's secretive R&D is exploring mobile and humanoid robots, though these may never become products. The company is also considering health features as subscription services and evaluating home energy products.
In the short term, Apple will focus on incremental improvements to its existing lineup, including faster chips and touchscreens for Macs, more functional iPads with larger displays, and Apple Watches with health monitoring. These enhancements aim to keep Apple's business stable, but true success will require turning more innovations into practical new products.