Now that smartphones, the source of about two-thirds of Apple's revenue, aren't a growth business anymore — the number of new devices sold globally contracted slightly in 2017, according to preliminary estimates from research firm IDC — Apple needs to rely on singles and doubles more than home runs. That makes it eminently sensible to identify underserved nooks of the smartphone market. The smaller screen iPhone SE released in 2016 was another example of Apple's hunt for corners of the device market outside its wheelhouse.

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Still, all this product segmentation is an unfamiliar strategy for people who have followed Apple for years. Before Tim Cook became Apple's chief executive officer in 2011, he boasted about his company's focus on a relatively small number of products. To Cook, the ability of Apple's newest products to fit on a single table was a sign of Apple's strength. This focus was good when growth was easier for Apple to achieve. If Apple's 2018 product lineup were to fit on a tabletop, it would need to be a boardroom table rather than a model for a breakfast nook.

It's odd that Cook and other Apple executives don't ever talk broadly about how the company is revamping its product strategy. Instead, even to investors, executives talk about how great their products are. That's fine, but Apple is not a charitable organisation. It is the world's most valuable public company, and one of its top missions is to maximise profits and shareholder value. Don't let that cold reality get lost. Those slabs of glass and circuits may be magical, but they're also ringing up huge sales and profit for the company and its stockholders.

The padding of Apple's product lineup is innovation of a different sort for Apple. The company generates healthy profits on each phone and its other hardware products. That means even if each new device isn't a blockbuster on its own, each sale generates incremental revenue at a healthy profit margin.

Each device Apple sells doesn't have to be a hit for the company to win. It just needs to keep revenue and profits growing, and it can do that just fine with an array of middle-of-the-road sellers in an expanded product lineup, just as it did with a small number of blockbuster products. Three phones really can be better than one.

Bloomberg