Why Apple is now focusing on users, not units in Fiscal 2019

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  • Reply 21 of 69
    The problem Apple faces is that the needs of their customers are changing faster than Apple can realize it and add features to enable it. The wall around Apple's garden works in both directions. It keeps some users in but keeps many more out. An example: Apple dictates what the Apple Watch is for. It is for notifications. It is not for users to download custom watch faces. It is absolutely positively not for playing games or scanning for nearby WiFi networks or recording conversations or 99% of the other possible things users may want to do with it.
    williamlondon
  • Reply 22 of 69
    The crazy thing is that people view other smartphone manufacturer's increasing volumes as a bad thing for Apple.  Quite simply, every Android user is a future iOS customer.  And companies need future customers to grow.  
    correctionsradarthekatbaconstang
  • Reply 23 of 69
    Unfortunately, Apple's decisions always seem to upset Wall Street more often than not. Apple's decisions are quickly deemed as negatives that send big investors fleeing to all the other major tech stocks. I find it somewhat strange how Apple never saw the end of iPhone sales growth some years back considering the constant flood of Android smartphones and emerging nations full of poverty-class consumers. Analysts were always saying that Apple was going to hit a major wall with iPhone sales, but I suppose Apple wasn't paying attention and too busy selling iPhones to concern themselves about it. It seems unlikely Apple will ever find a product replacement for the iPhone in terms of sales and profits but it's always difficult to see what sort of tech can pop out on the horizon. I'm just certain it won't be any form of glasses or goggles. Maybe Apple needs to get into the enterprise hardware business with some awesomely powerful A-series based servers. If Amazon can do it, then I'm sure Apple can, too.
  • Reply 24 of 69
    bitmodbitmod Posts: 230member
    Apple is using the same strategy with investors as it did with the Battery Reporting in iOS 12 - give them a whole lot of useless data and sell the new narrative hard as ‘this is what’s really important’ - hoping nobody notices the 1 piece of data people really want, is gone. And the only persons with access to that data is Apple. 
    muthuk_vanalingamwilliamlondon
  • Reply 25 of 69
    Why Apple is focusing on users not units? Because units aren’t growing like they used to. I will say though seeing Apple become a company focused on extracting more money out of existing users is kind of depressing. Not nearly as exciting as the great product reveal on stage.
    I think it’s that Apple recognize that this is a finite planet and you can not grow forever. I do agree that they are in the business of extracting money out of its users, they are a company after all. However, I disagree with your perspective on it. In order to innovate and create new and better technologies you need to invest money. The majority of people on this planet do not have the funds to participate in this type of endeavor, so a company focusing on these individuals will add nothing more to the company outside of their occasional purchase of a phone that has barely any profit margins. You need to sell to people who have money and can afford to contribute to keep you, the company, pushing the boundaries of technology. Now you can extract ‘money’ out of those that have none, but that requires them becoming the product and being subjected to advertising and surveillance. 

    I believe the reason why Apple has upped the cost of entry to their best devices is because more and more people can no longer afford to fund the research to keep a company pushing the boundaries. But this is where the Xr comes into play... Apple is now in a position to deliver an incredibly future forward device to more people off of the backs of those who want or can afford the best. The Xr will be the phone that people can truly start holding onto for 5+ years and have it still working incredibly well. Now how on earth do you extract money out of those people who can buy the second best phone on the market at a price point that is 400 - 700 dollars less than the premium? Through services. Apple is making their cutting edge technology available to more people than ever before, for a price point that allows them to keep pushing forward. Sure it isn’t their flagship phone, but it doesn’t have to be. I really think Apple knocked it out of the park with the Xr, especially when people are becoming less and less interested in having to own the best. Rather they are looking for something they can buy and not have to worry about for a long time. This is something that Andriod is not going to be able to copy for a very long time. 
    I honestly think creating these upper price tiers is more about being able to still show revenue and profit growth even when units are flat to down. It won’t all come from services. We’ll see how successful it is when Apple reports earnings. Even though they’re not providing unit sales anymore I think we’ll still have a good indication of how sales were based on Cook’s commentary. The last time Apple had a so-so holiday quarter Tim Cook was pretty negative on the earnings call. You can tell when Apple had a great quarter because Tim Cook is much more upbeat on those calls.
  • Reply 26 of 69

    These kind of articles miss the forest for the trees. The business cycle is a repeatable pattern that happens thousands of times over to thousands of companies, including Apple:

    Stage #1)  A company invents a revolutionary product or service, like the iPhone, or Facebook, or Amazon, etc.  The invention is enough by itself to move massive sales, account signups, brand loyalty, whatever your metric is.  The company becomes a leader in the stock market and otherwise.

    Stage #2) Over time the novelty of the product wears off, competitors catch up and market saturation slowly creeps in.  The net result is slowed sales.

    Stage #3) Faced with slowing sales, heightened shareholder expectations and increased operating costs (due to having more staff, etc.), companies compensate by increasing prices and increasing the number and range of available products to try and keep growth from slowing too much.  Sound familiar??

    4) The increased prices compensate for reduced sales over a short period due to customers being locked in, brand loyalty, etc., but over time the higher prices reduce demand even further and the company starts to trend downward on multiple fronts.  What happens from here depends on many factors.  Sometimes the company can find a new product or service to start the cycle again, sometimes they can't and just continue to service a reduced user base.  Sometimes another company invents a new product that effectively outdoes the original company (kind of like what Apple did to Palm and the other smartphone providers originally).

    Apple is in stage 3.  Everything they are doing is textbook business cycle economics.  This idea about people vs. units and such, you see a lot of this kind of news/opinions for companies around stage 3.  The reason being people, websites (like this one) etc., are invested in and dependant on the original companies success, and try to do whatever they can to help stem the tide.  I will work for a time...

    avon b7
  • Reply 27 of 69
    Rayz2016Rayz2016 Posts: 4,556member
    ElCapitan said:
    "churning out ever-increasing volumes of hardware units" isn't exactly what Apple have been doing for the Mac lately. In many ways they have gone to lengths to sabotage their own ecosystem and user base for macOS over multiple years.

    Seen in that light, the narrative on focusing on users rather than units is not particularly trustworthy. I believe the investors understand that. Cause and Effect!
    I don't feel like you read the editorial.
    I don’t feel like he read the internet. 
    knowitallStrangeDayswilliamlondon
  • Reply 28 of 69
    Why Apple is focusing on users not units? Because units aren’t growing like they used to. I will say though seeing Apple become a company focused on extracting more money out of existing users is kind of depressing. Not nearly as exciting as the great product reveal on stage.
    Checks gross margin %.... exactly the same for almost a decade. 
    correctionsbaconstang
  • Reply 29 of 69
    knowitallknowitall Posts: 1,183member
    Unfortunately, Apple's decisions always seem to upset Wall Street more often than not. Apple's decisions are quickly deemed as negatives that send big investors fleeing to all the other major tech stocks. I find it somewhat strange how Apple never saw the end of iPhone sales growth some years back considering the constant flood of Android smartphones and emerging nations full of poverty-class consumers. Analysts were always saying that Apple was going to hit a major wall with iPhone sales, but I suppose Apple wasn't paying attention and too busy selling iPhones to concern themselves about it. It seems unlikely Apple will ever find a product replacement for the iPhone in terms of sales and profits but it's always difficult to see what sort of tech can pop out on the horizon. I'm just certain it won't be any form of glasses or goggles. Maybe Apple needs to get into the enterprise hardware business with some awesomely powerful A-series based servers. If Amazon can do it, then I'm sure Apple can, too.
    Negating all your remarks makes a lot of truths. 
    corrections
  • Reply 30 of 69
    The problem Apple faces is that the needs of their customers are changing faster than Apple can realize it and add features to enable it. The wall around Apple's garden works in both directions. It keeps some users in but keeps many more out. An example: Apple dictates what the Apple Watch is for. It is for notifications. It is not for users to download custom watch faces. It is absolutely positively not for playing games or scanning for nearby WiFi networks or recording conversations or 99% of the other possible things users may want to do with it.
    The iOS installed user base has grown significantly in the last couple years but okay.
    correctionswilliamlondon
  • Reply 31 of 69
    Why Apple is focusing on users not units? Because units aren’t growing like they used to. I will say though seeing Apple become a company focused on extracting more money out of existing users is kind of depressing. Not nearly as exciting as the great product reveal on stage.
    In 11 years, the smartphone market has peaked.

    There isn’t much going on technology wise for any manufacturer, at least not enough to upgrade. That’s why most people are replacing their batteries on iPhone 6 and newer. 

    The increased pricing for the X line is, IMHO, a stopgap solution for technologies to mature enough to be cost effective to implement on a new device. 

    The uncertainty of the US economy is preventing customers from upgrading because it’s not a necessity. It had gotten Apple’s attention to the extent that Apple is offering more money for trade ins for older iPhones (6 and up). 

    Apple is pushing “Today at Apple” hard and this is going to be the catalyst to keep revenue somewhat stable while new hardware and software are in development. 

    This isn’t an Apple problem exclusively, the whole tech market is going to be flat in the short term. 
  • Reply 32 of 69
    knowitallknowitall Posts: 1,183member

    These kind of articles miss the forest for the trees. The business cycle is a repeatable pattern that happens thousands of times over to thousands of companies, including Apple:

    Stage #1) ...

    Apple is in stage 3.  Everything they are doing is textbook business cycle economics.  ...

    I would throw the textbook away and economics with it.
    correctionsbaconstang
  • Reply 33 of 69
    brucemcbrucemc Posts: 1,512member
    So many people have absolutely no clue about Apple...including those that read and post about it every day.

    If I knew nothing about Apple, and only read the comments section on tech blogs, I would come to the conclusion that Apple was some mediocre tech company, formed maybe 15 years ago, that just happened to stumble upon a product that they called "iPhone", and threw it out into the market to see what would happen, aided by some smooth talking sales hack named "Jobs".  Just purely due to luck, this product became successful, and through no effort at all, this mediocre company "Apple" just rode this product line up to fame and fortune.  Alas, now that the smartphone market has peaked, this company full of bumbling fools has absolutely no clue about what to do next.  

    "Tim, units have peaked, what will we do?" "I don't know, raise prices I guess (as he gazes into a business cycle for dummies book, fearful that everyone will realize he knows nothing about business, the company, or its markets)".
    correctionsStrangeDaysJWSCbaconstang
  • Reply 34 of 69
    seneca72 said:
    But is Apple really focussing on users?

    There's an interesting piece on Fraser Spiers Blog on how a vocal advocate of iPads is moving to a ChromeBook as his default mobile computing device.  The combination of power and portability across several use cases was ultimately too much to ignore.  

    To gain the same degree of functionality using Apple kit would require a MacBook and an iPad and whilst Apple may think people will buy one of each, many users faced with the Google ecosystem will not.  The point is that Apple is still focussed on selling devices (iPad + MacBook) whereas the user faced with an all embracing solution is going to go with the cheaper option.  

    That may not be true for schools although ChromeBooks apparently are killing the iPad in US schools and it's only a matter of time before the same thing happens in the UK where price is everything.  Whether Apple will bring out something similar to the old e-Mate, with an A12 processor running IOS remains to be seen, but if they don't they really should.  It would give the ChromeBook a run for its money.  
    The blog writer works at a Google school and most recently wrote about how he also moved to an Android phone. That's not representative of any Apple users, and nobody in the real world has any use for Chromebooks apart from people getting them for free to run a curriculum of Google Apps.

    Apple isn't trying to "give the Chromebook a run for its money" because it doesn't have any. 
  • Reply 35 of 69
    The numbers are not global, but only US based. The dominant mobile device manufactirer globally is Samsung. Apple comes second. Please do not sell this data as general trend. On some markets like in Europe Apple has really marginal presence. It is not about hating, trolling or else so svae yourself those derogatory slogans. This is aboutr marketshare facts: Samsung 28% Apple 26%
    I don't know what data you are referencing (the only picture to glance at on the way to the comments is "global handset profits") but the article says Samsung sells the most phones and explains why that's not working out.

    Apple does not have a "marginal presence" in Europe. iPhone represents the majority of phones in Ireland, UK, Sweden, and 35-45% of Germany and France.  

    Again, the point of the article is installed base of users, not one quarter of sales. 
    radarthekat
  • Reply 36 of 69
    ElCapitan said:
    I don't feel like you read the editorial.
    I did and it is partly based on inaccuracy, lost history and wishful thinking. 

    Sentences like "At the same time, Apple also worked to adopt Intel chips, USB, and other technologies that ..." is cringeworthy. USB was introduced with the original iMac on System 8.1 in 1998 on a PowerPC based machine, almost 8 years before Intel processors .
    It says that part of Jobs' strategy of Apple was moving to standards used on PCs. It doesn't say Apple moved to both simultaneously, unless you pull a quote out of context disingenuously. 
  • Reply 37 of 69
    My reaction to this article: "Sure, Jan."  :|

    So when are we actually going to have a REAL MacBook Pro that is made FOR US, not for units...
    avon b7
  • Reply 38 of 69
    Why Apple is focusing on users not units? Because units aren’t growing like they used to. I will say though seeing Apple become a company focused on extracting more money out of existing users is kind of depressing. Not nearly as exciting as the great product reveal on stage.
    On the article explaining that Apple has nothing to hide, you demanded to know what investors should think.

    Here, the article is outlining what investors should think and you're insisting to know that Apple has something to hide. 

    You should just read both articles and then you wouldn't have to post your take on how Apple doesn't reveal products anymore (MacBook Air with a T2 chip full of custom technology and Touch ID is less exciting for you than an iBook with--surprise!--WiFi?) and how depressing it is to think that Apple has more tech products and services available than ever before.

    You sound like fun at parties. /s
    radarthekatbrucemc
  • Reply 39 of 69
    ElCapitan said:
    I don't feel like you read the editorial.
    I did and it is partly based on inaccuracy, lost history and wishful thinking. 

    Sentences like "At the same time, Apple also worked to adopt Intel chips, USB, and other technologies that ..." is cringeworthy. USB was introduced with the original iMac on System 8.1 in 1998 on a PowerPC based machine, almost 8 years before Intel processors .
    It says that part of Jobs' strategy of Apple was moving to standards used on PCs. It doesn't say Apple moved to both simultaneously, unless you pull a quote out of context disingenuously. 
    At the time Apple moved to USB Apple was all in on PowerPC, and the "only" reason why they left PPC years later was because IBM was not particularly interested in meeting the low power requirements Apple had for processors in their portables. It became a (painful) necessity rather than seeking to move to standards PCs. 
    williamlondon
  • Reply 40 of 69
    The problem Apple faces is that the needs of their customers are changing faster than Apple can realize it and add features to enable it. The wall around Apple's garden works in both directions. It keeps some users in but keeps many more out. An example: Apple dictates what the Apple Watch is for. It is for notifications. It is not for users to download custom watch faces. It is absolutely positively not for playing games or scanning for nearby WiFi networks or recording conversations or 99% of the other possible things users may want to do with it.
    Other watches try do those missing things and they are failures, so maybe that's not the path to success. 

    Custom watch faces would get Apple sued immediately because the only real demand is for a fake Rolex or some other distinctive face with a copyright.

    Games would kill your battery immediately. Apple knows the watch has to have efficiency built in. It already scans for WiFi and joins immediately, and there are lots of voice recording apps on Apple Watch. 
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