Personal computers revolutionized the world decades ago. Then came smartphones, which took less than ten years to penetrate most U.S. households.
Not only was this a feat in and of itself, but it unlocked tremendous value and today supports a flourishing ecosystem of software applications as well.
Apple (AAPL) leads the way, accounting for 15.9% of worldwide smartphone shipments in 2020. The remainder were Android-based.
Investment Implications
Although it’s obvious how helpful owning a smartphone is, an easy fact to overlook is just how sticky the products are.
Once you are introduced to an iPhone, chances are you’re not switching off anytime soon (if at all). This is especially true once all your apps are set up, and once you’re dependent on multiple Apple devices (iPad, Apple Watch).
In the annual Piper Sandler teen survey, Apple’s popularity is evident in the numbers. Out of the teens surveyed, 88% owned an iPhone and 90% expected an iPhone to be their next phone. Both were record numbers and it’s worth thinking of what the future will look like as younger age cohorts become a larger part of the economy.
This power has also attracted attention. We recently witnessed concern around what the shift to iOS 14 would mean for those like Facebook running targeted ads. Others such as Spotify have also raised their voice about unfair treatment in the App Store. Going forward, although we follow many of the software companies sitting atop Apple’s platform closely, it’s just as important to consider the underlying infrastructure.
Twitter: @_SeanDavid
The author or his firm may have positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
