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Apple has sold everyone an iPhone, so what will the tech giant’s next move be?

Apple already sold everyone an iPhone. Now what?

Fifteen years after its launch, the iPhone “continues to change the world”, said Tim Cook, Apple’s chief executive, when the company reported its quarterly earnings in July.

It has certainly changed Apple. During a bumpy reporting season for technology stocks, the world’s most valuable company beat forecasts to report a modest year-on-year increase in revenue. That was in large part thanks to the iPhone, which generated sales of more than $US40 billion ($59b) in the latest quarter.

Yet as the worldwide smartphone market matures, the iPhone’s dominant role in Apple’s fortunes is diminishing. Whereas at its peak the device made up two-thirds of the firm’s revenue, in the latest quarter its contribution was just under half. In Apple’s flying-saucer-like headquarters in Cupertino, California, engineers are working on all manner of gadgets that might one day succeed the smartphone. But a big part of Apple’s future is already clear: a growing chunk of revenue and an even larger slice of profits will come not from any product, but from services.

For its first three decades Apple Computer made just what its name suggested. In 2006 its Macintosh desktops and laptops were outsold for the first time by something else: the iPod music player earned Apple more revenue. The next year the company launched the iPhone, and dropped Computer from its name. Over the following decade there were times when it could reasonably have been called Apple Telephone: in 2015 iPhone sales amounted to $US155b, twice as much as Apple made from all its other activities combined.

Now, after a decade and a half of expansion, the global smartphone market has plateaued, according to IDC, a data firm, which also forecasts no growth over the next four years. Apple still has room to increase its market share. Although in America the iPhone accounts for nearly half of smartphone sales, in Europe it makes up more like a quarter, according to Kantar, a research firm. Nonetheless, the years of rocket-powered annual growth are over.

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