TightWind is written by Kyle Baxter. Stay Hungry. Stay Foolish.

Benedict Evans points out that the smartphone market is mostly tapped out:

Growth for any given manufacturer necessarily becomes a matter of taking sales away from other smartphone manufacturers, not featurephone manufacturers (i.e. Nokia). Moreover, Moore’s Law is at work, driving down prices; you can now get a 4.5″ dual core Android phone from Huawei for just $200, and one from a generic Chinese manufacturer for $120-$150. 

This is clearly a challenge for any handset OEM, but especially for one at the high end. There are fewer and fewer new high-end buyers coming into the market and the ones you sold to in the past may increasingly be tempted by ever improving cheaper phones. So a high-end phone maker risks losing sales if it stays at the high-end, or losing margin if it makes cheaper phones, or both. 

This transition is the biggest threat to Apple’s future because the iPhone is responsible for so much of the company’s earnings.