iPhone Meh?

Apple's iPhone kicked off the modern smartphone era, and it's arguably the most important personal technology product of all time. But the iPhone is suddenly not so cool anymore, with consumers, with tech enthusiasts, or with Wall Street. What went wrong?

Well, that's obvious. It's the same thing that happened to Microsoft: In creating a single blockbuster product---Windows, in Microsoft's case---it settled automatically into a protectionist monoculture and pushed nothing but refinements and derivative products, none of which ever matched the success of the original.

This strategy was hugely successful for Apple while there was nothing but market share headroom to be had. But as the smartphone market matured and it ran out of huge new markets to conquer---like China---things started to change. And today, Apple is looking primarily to existing customers to keep the iPhone ship afloat. But it's a losing battle, and the iPhone has seen lower sales and lower market share in recent quarters.

Of course, external factors have had their impact as well, not the least of which is the competition. Today, Android handsets outsell iPhone by about 6-to-1 overall, and the gap is growing. Google's playbook is much like Microsoft's was back in the late 1980's and early 1990's: Copy Apple, and then out-innovate them once you've caught up.

And it's not just Google, of course: Samsung applied the same strategy on the hardware end, and while Apple easily demonstrated in court how Samsung's early smartphone designs aped the iPhone, Apple has since had its comeuppance: Samsung effectively invented the phablet form factor, and has innovated in other areas Apple has not, including curved screens.

Apple is often credited as being an innovator, but it's fair to say that most iPhone improvements have been minor---better cameras, or a pointless haptic vibration system---and protectionist focused. And for a good reason: The iPhone represents 65 percent of Apple's revenues. And you do not screw with the crown jewels.

Subsequent products like the "game changing" iPad---oops!---the Apple Watch, the New MacBook, and now the iPad Pro just demonstrate how Apple has gone from hunter to hunted. How far has the firm fallen? Hey, even its biggest fans admit that Apple is copying Microsoft now.

Which only really proves that Apple is as vulnerable to shifting market realities as any other company. It's not impossible to innovate when you're on top. But it's not easy to do so in a way that is truly customer-focused. Because at that point, you're really serving two masters: The customers, Apple's oft-touted "North Star"---snort---and revenues and margins, which are of course Apple's real North Star.

These two things are sometimes not mutually exclusive, and Apple has ridden high margins and big price tags to great success during the iPhone era. But when multiple underdogs are chipping away with truly innovative, customer-focused features, that time at the top...