The glory of the iPhone is hard to replicate; where will Apple's next growth point be?

For years, observers, customers, and investors of Apple (AAPL.US) have been focused on the same question: What is the company's next blockbuster product? They have been waiting for Apple to launch a product with revenue potential similar to that of the iPhone—a product that can become a new growth engine for Apple. Renowned tech journalist Mark Gurman believes this is quite a challenge. There are over 1 billion iPhones in use globally, and this device is at the core of Apple's product ecosystem. According to Zhitong Finance APP, the iPhone generates over $200 billion in revenue for Apple each year, accounting for more than half of its total revenue, while also helping to drive an additional $100 billion in service revenue and more accessory sales. The company's App Store, Apple Watch, music services, TV+ streaming platform, and AirPods have all gained popularity thanks to the smartphone that first launched nearly 20 years ago. For the past 15 years, Apple has been trying to enhance the influence of the iPhone by launching new product categories. The iPad generates over $25 billion in revenue each year, while the division that includes wearables and home products brings in about $40 billion annually. However, Apple's foray into entirely new fields has not always been smooth. Earlier this year, a decade-long plan to develop self-driving cars was canceled. Meanwhile, the company's first mixed-reality headset, Vision Pro, has had a slow start. In contrast, the iPhone has continued to develop steadily. It's time to face reality. Gurman states that there may never be another Apple product that can rival the iPhone. Of course, Apple still needs to find new sources of growth. The iPhone will not disappear, but it can no longer drive sales growth as it once did. So, what is the solution? To achieve growth, Apple cannot wait for a massive new opportunity—it needs several new device categories on par with the iPad, Mac, or Apple Watch. Vision Pro Gurman states that a broader range of visual wearable products (including smart glasses, augmented reality glasses, and head-mounted displays connected to the iPhone) could become a $25 billion business. Reportedly, Gurman hinted that Apple's second-generation Vision Pro is expected to launch between fall 2025 and spring 2026. This timeline aligns closely with previous market predictions. It is said that the second-generation Vision Pro will upgrade from the M2 chip used in the first generation to the upcoming M5 chip, resulting in significant performance improvements. In terms of appearance, Gurman noted that the Apple Vision Pro 2 is very likely to look similar to the current generation of Apple Vision Pro. Additionally, Gurman emphasized that the first killer app for Vision Pro has already been released. Apple is selling the Vision Pro as a standalone device (equipped with a powerful chip, priced at $3,500), but one of its best features is its ability to function as an external display for the Mac Apple recently launched a beta version of its new Mac extended display feature, including widescreen and ultrawide displays. According to Gurman, these features represent the first true killer app for Vision Pro. Gurman expects Apple to release visionOS 2.2 in early December, at which point all Vision Pro users will have access to the widescreen and ultrawide features. Other products are also worth looking forward to The AirPods, first launched in 2016, provide another opportunity. Currently, the revenue generated by AirPods is estimated to be between $10 billion and $15 billion annually, but versions that integrate health features and other technologies could make it a larger product category. Another promising area is smart home technology, where Apple may eventually make significant strides. The company plans to launch two new devices: one is a smart display (expected to be released in the first half of 2025), and the other is a high-end home hub with a robotic arm (planned for release a few years later). With the addition of new HomePods and set-top boxes, Apple could become a powerful force in the home market. Additionally, Apple has a dedicated team researching mobile robotics, and the company is also considering how to transform its health features into regular subscriptions, as well as evaluating plans to enter the home energy products market. In the near term, Apple will focus on gradually improving existing products, including equipping Macs with faster chips and touchscreens; iPads will have more features, larger displays, and foldable models; Apple Watches will include blood pressure and blood glucose monitoring functions; and adding artificial intelligence features to iPhones. Gurman concluded that these improvements will keep Apple's business stable in the coming years. However, if Apple wants to truly succeed, it needs to translate more innovation into practical new products. These products do not need to become phenomenon-level products