Tim Cook: The iPhone Hasn’t Reached Tech Maturity, Has Room to Grow

Some observers have suggested that the smartphone is at the end of its life. It’s time to move on to the Next Big Thing. During Apple’s Q1 2017 Earnings Report, an analyst asked Tim Cook about the future of the iPhone. Has it reached technical maturity? Will we see new features?

Here’s how Tim Cook responded.

UBS analyst Steven Milunovich was the one to ask the jackpot question at the very end of the call-in session. It certainly seemed as if he was setting Mr. Cook up with a softball pitch rather than expressing deep concerns. Perhaps. No matter.

UBS analyst Steve Milunovich

Investors tend to think of the iPhone as mature with technology improvements as incremental. Yet, I believe you think there’s plenty of runway left in terms of appealing new features. Do you think there are future enhancements coming that will be viewed as material by users? And particularly, changes beyond form factor, beyond the way the phone looks? Those functional things coming over time that you think could surprise people.

While one may suppose that CEO Tim Cook would wax enthusiastic on such a question in a self-serving way, he actually provided a fairly solid and even inspirational response. If one reads between the lines.

Apple CEO Tim Cook

I think the smartphone is still in the early innings of the game. I think there’s lots more to do. I think it’s become, every year, more important to people’s lives. There are more things people are doing with it. I talked a little [earlier in the call] about home automation, but I could have talked about health, I could have talked about CarPlay…. The use of it in the enterprise is growing significantly. And so, when I look at all of these things, usage going up, app developers still innovating, we’ve got some exciting things in the pipeline, I feel really good about it. We think differently about a lot of things, so maybe this is just one more.

Discussion

One comment here caught my attention. When I heard Tim Cook say, “I think it’s become, every year, more important to people’s lives,” my thoughts went to the essential elements of a strong computational device with robust communications in one’s pocket. That need isn’t going to go away.

Indeed, some have surmised that the Apple Watch will appropriate all these duties. The thing is, however, that computational power depends on the size of the battery. So while some older, more miniaturized functions, like GPS, may be moved to the Apple Watch, new computational capabilities will still require an iPhone-class battery.

Related to that, as customers find new ways to do more with their iPhones even as app developers exploit the hardware, new kinds of features, delivered by Apple, will become both inspired and possible. A good example of this the Apple Wallet. Conceptually, it started out as a repository for certain kinds of cards. Later, it became infrastructure for Apple Pay.

I see this kind of synergy continuing. And I don’t see the need for portable, strong computation combined with communications going away, especially when it comes to health monitoring. That is to say, I think it’s likely that the iPhone, in concert with AI agents and blood analysis, will become not just a fitness and general health tool, but rather, a sickness and disease diagnostic tool. With suggested courses of action. (FDA approved of course.)

There really isn’t any end in sight for a device like the iPhone. As Mr. Milunovich suggested, the form factor may change, but we’re merely at the beginning of what a device of this size and power capacity can attain.

For the smartphone, a company that’s right in there in the trenches with the technology, trying things and spending big R&D dollars, will always have a grander technical roadmap than observers with limited vision. Early innings indeed. I’d say just coming into the 2nd.

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