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Apple unused to being attacked, must adjust to new role on defense, analyst says

post #1 of 49
Thread Starter 
Apple has bested most all of its competitors and is widely acknowledged to make some of the highest quality products in the world, but now a new report says the tech giant will have to adjust to its new role as an industry heavyweight, a change from its traditional underdog status.

iPhone
With the iPhone, Apple is in the unfamiliar position of having to fend off competitors.


In a report titled "Identity Crisis: Can Apple Play Defense?" UBS analyst Steven Milunovich reiterates his previous 12-month rating for AAPL, calling the stock a Buy and targeting $600 as a price. The report cautions investors to remain patient with the stock, though, as the trend for AAPL is still likely to show more downside before it moves back upward.

The report notes, though, that Apple is in somewhat unfamiliar territory as a company. Once Microsoft's Windows achieved dominance in the OS wars, the Mac was relegated to a niche position, with a core of loyal users but diminishing share as the PC market grew ever larger. With the iPod, Apple finally achieved a leadership position, and the company never faced any serious competition in the media player segment.

Now though, Milunovich writes, the iPhone and iPad "are the first times Apple has had a leadership position drawing significant and competent competition." That competition comes in the form of an array of Android handset manufacturers, specifically chief Apple rival Samsung. Apple maintains significant leads in terms of profitability, product quality, and overall product ecosystem, but its competitors are looking to close the gap.

Apple, says Milunovich, is caught between its traditional focus on product quality with high revenues and investor demands for both lower-priced and larger-screened phones to compete Android devices. Milunovich is doubtful that Apple will rush out a five to six-inch phone in order to address those demands, saying that most companies would probably do so but that Apple likely won't.

"It doesn't appear to be in Apple's DNA to cover market spaces just to get revenue," the report concludes.

The report points toward innovation in new product areas as a potential way for Apple to deal with increasing competition. Others have previously pointed to rumored devices such as the Apple iWatch as a way of growing revenues even as the premium smartphone segment approaches saturation.
post #2 of 49
"A good offense is the best defense."

...Which is something Apple EXCELS at.
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post #3 of 49
Doomed. Samsung is out-innovating Apple now. Apple is losing market share. Tim Cook should be fired.

Did I leave out anything?
post #4 of 49
I'm really not interested in a big a$$ watch on my arm even if it is thin. Apple TV is a good idea but it doesn't give me any more than I can get streaming things with my Mac Book.

My four and five year old computers still do everything I need them to do. Home computing technology is so good that it doesn't require updates as often as in years past. Today's iPod Touch is more powerful than my 2002 Gateway desktop computer.

If Apple can create something in a new category that would benefit me I'll take a look at it.

When iPads come with card readers and a cool file system then I'll be interested in buying one. The multiple tiers of SSD storage models just isn't appealing to me. It is a good marketing tool for jacking up the profits and I understand that. So be it.
post #5 of 49
Quote:
Originally Posted by AppleInsider View Post


Now though, Milunovich writes, the iPhone and iPad "are the first times Apple has had a leadership position drawing significant and competent competition." 

 

 

He's exaggerating.  Apple had a leadership position ten years ago in MP3 players and it was competing with plenty of heavyweights.  Apple's management is more experienced than Milunovich gives them credit for.

post #6 of 49
Quote:
Originally Posted by delreyjones View Post

He's exaggerating.  Apple had a leadership position ten years ago in MP3 players and it was competing with plenty of heavyweights.  Apple's management is more experienced than Milunovich gives them credit for.

The iPod didn't come under attack as much as the iPhone/iPad.
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post #7 of 49

Mac is used to being attacked. Apple has to deal with this for a long time.

 

iPod has been successful in defending, but that market is not very big to attract big players, like Google, Samsung.

post #8 of 49
Quote:
Originally Posted by delreyjones View Post

He's exaggerating.  Apple had a leadership position ten years ago in MP3 players and it was competing with plenty of heavyweights.  Apple's management is more experienced than Milunovich gives them credit for.

Twenty years ago, Apple II dominated personal computers before IBM PC came, and for old timers, "legitimized" these newfangled microprocessor based computers. MS-DOS rose to dominance on the back of the IBM PC. Apple never recovered that market share. A series o flops such as the Apple /// and Lisa showed Apple could not compete with IBM, and soon afterwards, it's clones.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

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post #9 of 49
Quote:
Originally Posted by Suddenly Newton View Post

Twenty years ago, Apple II dominated personal computers before IBM PC came, and for old timers, "legitimized" these newfangled microprocessor based computers. MS-DOS rose to dominance on the back of the IBM PC. Apple never recovered that market share. A series o flops such as the Apple /// and Lisa showed Apple could not compete with IBM, and soon afterwards, it's clones.

You mean 30 years ago. It was due to Apple having a sugar salesman in charge in the 80s and morons in charge in the dark period.
post #10 of 49

another clueless analyst writing completely stupid statements. We all know Apple never had any competitors before. And we all know Apple makes no money from phones, tablets, and computers.

post #11 of 49
Quote:
Originally Posted by AppleInsider View Post

Apple, says Milunovich, is caught between its traditional focus on product quality with high revenues and investor demands for both lower-priced and larger-screened phones to compete Android devices. Milunovich is doubtful that Apple will rush out a five to six-inch phone in order to address those demands, saying that most companies would probably do so but that Apple likely won't.

"It doesn't appear to be in Apple's DNA to cover market spaces just to get revenue," the report concludes.


Apple needs to tell those whining investors that if all they care about is bottom-feeding and scraping the barrel to get every last dollar, sell their AAPL stock and go away.  Fed up with these people thinking that in order to compete, they have to join the herd of money-losing ventures.

Apple may not be #1 in quantity, but they are getting all the profits.  Yet it's not enough for some.

post #12 of 49
Quote:
Originally Posted by dasanman69 View Post

The iPod didn't come under attack as much as the iPhone/iPad.

I would say that this is just incorrect. Not that the iPod isn't the dominant player in the field, but that it didn't have competition. In reality, there were a lot of competitors out there. The sad fact though, is not one could compete with the iPod (thus the term so many times used of "iPod-killer").

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post #13 of 49
Quote:
Originally Posted by sflocal View Post

Apple may not be #1 in quantity, but they are getting all the profits.  Yet it's not enough for some.

I love this. The way I explained it to my son was this. Profit shows the health and wealth of a company. Market Share is just for people who like to measure certain anatomical properties.

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post #14 of 49
It's also misleading to characterize Apple iPhone as having lost market share. The iPhone started with zero-percent marketshare in 2007 against entrenched smartphone competitors like Nokia and RIM and Palm and Microsoft Windows Mobile licensees. While Apple has steadily won share away from this existing smartphone market, it has also gone after the larger market of feature phone users who are buying their first smartphone.

The same applies to the iPad. Some regulars on these forums buy the fiction that Apple had 100% of the tablet market in 2010, but you have to define the "tablet market" as modern iPad clones so as to exclude all the Windows-based tablets that came before it.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #15 of 49
Quote:
Originally Posted by bullhead View Post

another clueless analyst writing completely stupid statements. We all know Apple never had any competitors before. And we all know Apple makes no money from phones, tablets, and computers.

Disagree. Though this is not particularly insightful it at least makes sense. 

post #16 of 49
Quote:
Originally Posted by AppleInsider View Post

"It doesn't appear to be in Apple's DNA to cover market spaces just to get revenue," the report concludes.
 

Isn't this a good thing?

post #17 of 49
Originally Posted by AppleInsider View Post
…six-inch phone…

 

Sweet mother of frick, this phrase has now been said in actual seriousness. What moron wants a SIX INCH PHONE?!


"It doesn't appear to be in Apple's DNA to cover market spaces just to get revenue," the report concludes.

 

Huh. An intelligent analyst. Never saw that coming.

post #18 of 49
Uhm, iPad mini? Keeping previous two iPhones in production so carriers can offer them at $99 w/contract and 0$ w/contract (at least in the U.S.)?
post #19 of 49
Quote:
Originally Posted by allenbf View Post

Doomed. Samsung is out-innovating Apple now. Apple is losing market share. Tim Cook should be fired.

Did I leave out anything?

No, I think you about covered it. Unless you wanted to add the obligatory "MAC suxorz!" as a closing statement.

post #20 of 49
Quote:
Originally Posted by sflocal View Post

Apple needs to tell those whining investors that if all they care about is bottom-feeding and scraping the barrel to get every last dollar, sell their AAPL stock and go away.

That seems to be what has happened the last few weeks.
post #21 of 49
My sister told me yesterday that she's giving up her iPhone for a Note2. She wants the big screen. This seems to be a trend among my friends. Apple cannot ignore this demand for long.
post #22 of 49
Quote:
Originally Posted by Mike Eggleston View Post


I would say that this is just incorrect. Not that the iPod isn't the dominant player in the field, but that it didn't have competition. In reality, there were a lot of competitors out there. The sad fact though, is not one could compete with the iPod (thus the term so many times used of "iPod-killer").

 

Right.  Microsoft was a competitor.  Some analysts used to think they were a significant player ;=)

post #23 of 49
Apple needs to keep being Apple. End of discussion. This analyst believes Apple should allow perception to inform their behaviour. Thankfully Apple doesn't to that, and should never consider this MO.
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post #24 of 49
Quote:
Originally Posted by dasanman69 View Post


The iPod didn't come under attack as much as the iPhone/iPad.

 

The iPod came under attack - not from other music players but from music-playing mobile phones. Apple responded successfully with the iPhone.

post #25 of 49
Quote:
Originally Posted by Mike Eggleston View Post


I love this. The way I explained it to my son was this. Profit shows the health and wealth of a company. Market Share is just for people who like to measure certain anatomical properties.

Market share is an indicator that has to be considered on some level.  I would make more important than other indicators, but it gives a snap shot of what's going on in the industry to show some trends. The problem is that all of these smartphone makers don't release their products on the same date, nor does it tell you how many market each one is in because not every smartphone mfg is selling their products in the same countries and/or carriers.  While it appears as though Apple has only about 20+% Global market share, there are countries and carriers that they haven't signed on yet.  Apple also doesn't release their products in all markets at once like these others do.
 

I personally think they need to divide all of these numbers by country, by carrier, by market (educational institutional buyers, corporate, government, individual by professional, student and average consumer by unit active AND unit sales on a quarterly basis.  If they had this information more detailed, a better analysis can be done in terms of predicting future sales and seeing market trends.

post #26 of 49
Quote:
Originally Posted by Mike Eggleston View Post

I would say that this is just incorrect. Not that the iPod isn't the dominant player in the field, but that it didn't have competition. In reality, there were a lot of competitors out there. The sad fact though, is not one could compete with the iPod (thus the term so many times used of "iPod-killer").

Having a lot of competitors doesn't mean that they came under a viable attack. No one was able to duplicate the iPod/iTunes combo. People that purchased a competitor's device almost always ended up buying a iPod. With Google's help the competition has been able to make devices with an experience that iPod competitors were able to ever come close to.
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post #27 of 49
Quote:
Originally Posted by Mike Eggleston View Post

I love this. The way I explained it to my son was this. Profit shows the health and wealth of a company. Market Share is just for people who like to measure certain anatomical properties.

Yes but not every product/service can be treated the same. People will not always go with the best.
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post #28 of 49
Quote:
Originally Posted by TokyoJimu View Post

My sister told me yesterday that she's giving up her iPhone for a Note2. She wants the big screen. This seems to be a trend among my friends. Apple cannot ignore this demand for long.

 

Bigger screen = better user experience?

 

Report back to us one year from now.  I will bet you $20 right now that she will be back to an iOS device before 12 months are over.  

post #29 of 49
Quote:
Originally Posted by drblank View Post

Market share is an indicator that has to be considered on some level.  I would make more important than other indicators, but it gives a snap shot of what's going on in the industry to show some trends. The problem is that all of these smartphone makers don't release their products on the same date, nor does it tell you how many market each one is in because not every smartphone mfg is selling their products in the same countries and/or carriers.  While it appears as though Apple has only about 20+% Global market share, there are countries and carriers that they haven't signed on yet.  Apple also doesn't release their products in all markets at once like these others do.
 
I personally think they need to divide all of these numbers by country, by carrier, by market (educational institutional buyers, corporate, government, individual by professional, student and average consumer by unit active AND unit sales on a quarterly basis.  If they had this information more detailed, a better analysis can be done in terms of predicting future sales and seeing market trends.

Agreed. Market share should be considered... but it's not the be-all-end-all.

Some would say Android is dominating with their market share position of 70%. But that could also broken down by countries, carriers and phone capabilities.

No one doubts that Android phones sell like hotcakes all around the globe. But what should also be considered is how many of them are cheap underpowered phones running Gingerbread today... or the fact that some countries don't have access to the Google Play Store... or countries that barely have 3G.

Android "wins" by sheer volume of phones sold and by market share.

But what is Android actually doing with that market share... other than just saying they have that much market share?
post #30 of 49
Quote:
Originally Posted by Tallest Skil View Post

 

Sweet mother of frick, this phrase has now been said in actual seriousness. What moron wants a SIX INCH PHONE?!

 

Perhaps to make up for something else?

 
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post #31 of 49
Quote:
Originally Posted by kharvel View Post

Bigger screen = better user experience?

Report back to us one year from now.  I will bet you $20 right now that she will be back to an iOS device before 12 months are over.  

What I'm hearing is:

Android: large screen... poor OS
iPhone: small screen... great OS

I'm sick of that division. Call me crazy... I want a bigger screened iPhone.
post #32 of 49
Quote:
Originally Posted by kharvel View Post

Bigger screen = better user experience?

On some levels yes. Why do people buy bigger and bigger screen TVs?
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post #33 of 49
Quote:
Originally Posted by TokyoJimu View Post

My sister told me yesterday that she's giving up her iPhone for a Note2. She wants the big screen. This seems to be a trend among my friends. Apple cannot ignore this demand for long.

I dont think Apple is ignoring the demand ( although I don't think the demand is as high as u think). I bet Apple has a few prototypes and are considering every aspect of it. It will be a compliment to the current iPhone and they'll release it when it's good and ready.
post #34 of 49
Quote:
Originally Posted by Michael Scrip View Post

What I'm hearing is:

Android: large screen... poor OS
iPhone: small screen... great OS

I'm sick of that division. Call me crazy... I want a bigger screened iPhone.

Pick one up and judge for yourself.
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post #35 of 49
Tim Cook is a genius. He is one of the main reasons that Apple has been so successful and why they have so much cash and no debt. Another reason why Apple is so successful is that they do not listen to stupid marketing advice from the unqualified.

Now the real dummy boys work for the competition.
post #36 of 49

I have seen the same thing - long time iPhone users are opting for the big screen - mainly to avoid carrying 2 devices - (e.g. why have an iPad mini and a iPhone when you can have one 5-6" phone?).

 

Also anyone over 45 with bad eyesight (the marketshare with $$$), needs a bigger screen. Also many men (like my Dad) have fingers too big for the iPhone. If a 6" iPhone came out, my family and I would buy 4 tomorrow - I don't really want to buy a bunch of mini's.

post #37 of 49
Quote:
Originally Posted by dcolley View Post

Tim Cook is a genius. He is one of the main reasons that Apple has been so successful and why they have so much cash and no debt. Another reason why Apple is so successful is that they do not listen to stupid marketing advice from the unqualified.

Now the real dummy boys work for the competition.

 

Do you work for Tim Cook? I've read all your posts, and they sound suspiciously like corporate messaging.

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post #38 of 49

Anecdotally, I'm seeing vastly more deviation in quality from Apple than I have in the past. For reference, I've been an Apple user commercially since 1985, and have been 100% Apple in my home and workplace since 2006, so I've  bit of tread under me when I make that assertion. Their issues with quality and customer service have been steadily trending negative in my perception since Tim Cook took over the reigns at Apple. 

 

What used to be a no-brainer decision in terms of plug-n-play, it just works, think different, etc. is now something substantially watered down. For example, Apple's trend towards a multiplicity of adapters — all the while espousing the concept of simplicity — reveals the slight-of-hand that weakens the perception AND reality of their brand. 

 

So goes the trend towards the elimination of functionality from products in the guise of simplicity (OS X 10.8), the generally buggy nature of code emanating from the mothership (Safari 6, OS X 10.8, iOS, et. al), the sheer absence of capability such as the lack of basic iOS functionality (universal printing, easy saving, robust sharing, feature-starved iCloud, dysfunctional email [how many steps should attaching multiple images to an email take])...

 

Apple, under Tim Cook's leadership, IMHO, has regressed to a state of disjointed union and suspicious quality. The problem with greatness is that anything less feels abysmal. I *hope* they're able to turn the boat around, truly.

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post #39 of 49

What a horse-shit article. Apple has been "doomed" every 6 months for as long as I can remember. Pretty much every single decision they've ever made has been panned by Wallstreet, investors, and the press. Every single time they've been successful, they've done it by proving everyone wrong. Every fucking product that ever came out is hyped as an "i-X" killer, since the iPod days, with editorial after editorial predicting that Apple is in a "bubble" and their demise is just around the corner.  This has been going on for at least a decade. Apple has been on the defensive it's entire existence, constantly being mocked and ridiculed. 

 

The only thing that I find new now, is that journalistic integrity is worse than it's ever been, and you have large, formerly respectable publications spreading outright lies, and falsities, that have absolutely no basis in fact, because of God knows what agenda. This goes far beyond opinion: horse-shit is being peddled as fact every day, and good Apple news is twisted into negative news. It's just gotten worse lately, and no other tech company has had it near this bad. Yes, even Microsoft, as a monopoly, never got these types of garbage articles that made shit up simply for the sake of it even when it was untouchable. Now, instead of mocking Apple, the clowns have elegantly transitioned to lying in order to make the company look as bad as possible. 

 

The people at Apple have a thick skin, I have no doubt they will keep their eye on the ball, ignore this noise, and do whats in the best long term interest of Apple, and of consumers. 

post #40 of 49
Quote:
Originally Posted by godrifle View Post

Anecdotally, I'm seeing vastly more deviation in quality from Apple than I have in the past. For reference, I've been an Apple user commercially since 1985, and have been 100% Apple in my home and workplace since 2006, so I've  bit of tread under me when I make that assertion. Their issues with quality and customer service have been steadily trending negative in my perception since Tim Cook took over the reigns at Apple. 

 

What used to be a no-brainer decision in terms of plug-n-play, it just works, think different, etc. is now something substantially watered down. For example, Apple's trend towards a multiplicity of adapters — all the while espousing the concept of simplicity — reveals the slight-of-hand that weakens the perception AND reality of their brand. 

 

So goes the trend towards the elimination of functionality from products in the guise of simplicity (OS X 10.8), the generally buggy nature of code emanating from the mothership (Safari 6, OS X 10.8, iOS, et. al), the sheer absence of capability such as the lack of basic iOS functionality (universal printing, easy saving, robust sharing, feature-starved iCloud, dysfunctional email [how many steps should attaching multiple images to an email take])...

 

Apple, under Tim Cook's leadership, IMHO, has regressed to a state of disjointed union and suspicious quality. The problem with greatness is that anything less feels abysmal. I *hope* they're able to turn the boat around, truly.

 

In that entire rant of yours, you havent stated a single fact to back any of your assertions. 

Where is a single instance of functionality being "lost" under Tim Cook? What is now less capable than it used to be under Steve Jobs? What "elimination of functinality" from 10.8? I've been using OSX for the past decade, I would notice if anything went missing. All the shit you bitch about has only improved. Your post is a classic example of a bunch of words than mean absolutely nothing, because you don't back them up with real, justifable, reasonable, real world examples? There's nothing 'disjointed' about Apple of today, the hardware and software product line is more unified than its been in Apple's history, the build quality of the hardware (Retina Macbooks, iPods, iPhone 5, iPad mini, etc) is the best it's EVER been, and so on and so forth. You're desperately trying to come up with a narrative that the evidence does not support, all for the sake of concern trolling and reminiscing about a time when Apple's products had more and limitations issues than they do today. 

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