A view from Rachel Pasqua

Where Apple will focus after peak iPhone

Apple's latest quarterly results show demand for the iPhone is stalling but there are signs about where the company's staking its future, says Rachel Pasqua,...

As expected, Apple’s financial results continue the trend of consecutive declines in quarterly revenue, which is down 14.5% from this time last year.

The stock rallied after a few hours, jumping 6.5% after the close, thanks to glimpses that CEO Tim Cook provided of the company’s plans for the future. Sales of iPhones are slowing not because of disinterest but because of saturation and a user base of millions upon millions, which of course creates a foundation for the next generation of highly ambitious Apple services.

As always, Cook shied away from making any direct reference to new products and services. These announcements are always made at Apple's September event, but it’s possible to read between the lines and predict what areas might be the focus.

These certainly include:

Augmented reality and VR

Cook made reference to the wildly popular Pokémon Go and alluded to Apple making significant investments in AR. Myriad possibilities exist for integrating both into Apple products, from augmented reality in Maps to VR headsets.

Given that several companies in the space have been acquired by Apple in the last few years and hiring for VR & AR roles appears to have ramped up, it’s likely that both technologies will play significant roles in the fall product announcements.

Artificial intelligence

New, AI-driven features for Siri were announced at the developer conference in June, including integration with third-party apps, something that promises to decrease user fatigue and increase usage of apps and content of all kinds.

It’s possible we’ll see Apple AI facilitating all diverse user experiences, from the way fitness apps record your data to the way Instagram organises your photos on your iPhone.

Apple Watch

Very little was said about the Apple Watch but it was noted that the watch received a top customer satisfaction rating among smartwatches awarded by JD Power.

Given Apple’s commitment to superlative user experience and the obvious satisfaction users express for the device, it’s likely we’ll see new models and new services to support them come September.

If the true ambition is to transition Apple’s core focus to services, Cook and the company have some catching up to do with Facebook and Google, both of which have made great strides in AI and augmented reality, not to mention wearables and the many other connected nodes in the nascent Internet of Things.

The commitment is clearly there — services now account for 11% of Apple's overall revenue, up from 8% in 2015 - but Cook has previously predicted that they would be the size of a Fortune 500 company by 2017.