Apple in 2019: Will a recession ruin its run?

Posted:
in AAPL Investors edited January 25
Apple has faced profound challenges in the past from powerfully entrenched adversaries that once looked like they might derail the company's advancement, including Microsoft, Nokia, Google, Motorola, and Samsung. But today, with no real competitors standing in its way, will Apple's premium-priced trajectory get knocked out of alignment by a recession in China and global aftershocks? Here's a look at Apple's future informed by its recent past.

iPhone X Apple Watch
How will Apple's affordable luxury survive a global recession?


The modern history of Apple has weathered two previous recessions: one in the early 2000s following the Dotcom Bust, and then the Great Recession of the late 2000s that hit after the 2007 Financial Crisis. Note that both of these happened to coincide with the emergence of major new products that fundamentally changed Apple's core: first iPod and then iPhone.

Apple's 2001 Dotcom survival

In 2001, Apple was just beginning to recover from its 1990s near-death experience thanks to a series of decisive moves by Steve Jobs -- including the slashing of unproductive research and the simplification of the company's product strategy. Yet as Apple rebuilt itself with solid new hits like the consumer iMac and workhorse PowerMac G4, it also launched its first notable mistake in the expensive, high-end, form-over-function PowerMac G4 Cube in 2000.

The G4 Cube was beautiful and featured some impressive concepts, but was beset by poor timing. It had been premium-priced to cater to the lavish-spending Dotcom market that began to implode just as the new machine became available. It only lasted one year as a commercial product. It now sits in various museums including New York's Museum of Modern Art, and in a few AppleInsider staffers' collections


The PowerMac G4 Cube


It's tempting to suggest that Apple's current lineup of high-end iPhones, MacBook Pros and other premium hardware sit in a similarly precarious position as the economy begins to look uncertain globally-- particularly in China, where big-ticket spending has scaled back dramatically. There's an incessant media narrative continuously backed by populist head nodding that claims Apple's prices are just so high now that nobody can afford to buy them, along the lines of the quote attributed to Yogi Berra that "nobody goes there anymore. It's too crowded."

Pundits, columnists, and even many analysts keep talking about Apple's premium pricing as a problem, and seem to think they have discovered pure gold in arriving at the conclusion that rivals are offering competitive hardware at-- get this-- cheaper prices than Apple. The reality is that neither of those things is new for Apple at all.

In reality, the G4 Cube wasn't abruptly discontinued because the public suddenly realized that HP, Dell, and various generic PC makers were selling computers for less. It was largely that the new Cube was trying too hard to be museum-worthy and simply wasn't very good at being a powerful Mac, or as a plug and play consumer hit like iMac, and wasn't really doing anything usefully new.

The pricing of the fancy G4 Cube certainly didn't help its overall popularity, but a larger problem was its rather impractical desktop form factor just as mobility was growing increasingly important.

Apple continued to cope with the Dotcom Bust and economic recession while selling other premium-priced PowerMacs. It also introduced the fancy new Titanium PowerBook G4, a machine that was just as much of a premium-priced showboat as the G4 Cube at a time when tons of cheap PC notebooks were available elsewhere.

Titanium PowerBook G4
Titanium PowerBook G4


And most notably, in 2001 as recession afflicted Apple's primary markets in the U.S., Japan, and Europe, the company introduced iPod, a music player that was far, far more expensive than competing CD, MiniDisc, Flash memory or other hard drive MP3 devices. Yet iPod's premium price did not hold Apple back from clawing its way upward during a serious economic downturn.

Ultimately, the iPod ended up helping the company to completely reinvent itself as a device maker, as well as a global retailer-- because iPods drove the creation and expansion of its new stores.

Jobs' recovering Apple of 2001 could demand premium pricing on its technology products that did rather non-novel things and yet dramatically grew during a recession despite limited corporate resources and a near 100 percent dependence on Mac hardware sales. At the same time, Microsoft exercised near total control over the global PC industry. So, why are pundits today patting themselves on the back for pointing out that the Apple of 2019 is charging more for its iOS mobile devices than Android cloners in China? Are they really that impenetrably ignorant?

iPod
Original iPod


Today, Apple has vast ecosystems that are far more important than the MP3-playing iPod and Mac software titles available in 2001. iOS is critically important to the enterprise globally in ways Android will never be. Consumer interest in data security and privacy has never been higher, and Apple has never had a stronger case to make compared to the data grabbing surveillance advertising of Android as a platform, and particularly as a government surveillance platform built by various licensees who aren't going to resist when the state demands backdoor access.

Apple has never before had such strongly interlocking ecosystems like HealthKit and Apple Watch, HomeKit and HomePod, iTunes and Apple TV, Apple Music and CarPlay, Continuity and Macs, and this year: AppKit iOS software that will become portable to macOS. There are tremendous reasons why consumers and businesses will pay a premium for Apple's products in 2019 regardless of whether the overall economy is growing or not, far greater than there was in 2001.

Apple's 2007 Great Recession survival

Less than a decade later, the U.S. was hit by another recession that grew global by 2009. During the economic expansion between those two recessions, Apple had cranked out a series of iPods and incrementally advanced Macs. But internally, it had been working on the next generation of mobility: a wireless tablet capable of running a touch-driven Safari web browser.

Rather than releasing this new concept to a growing economy, Apple refined its product into a smartphone design that could be subsidized by mobile operators and formed global partnerships with carriers starting with Cingular / AT&T in the U.S. It ultimately launched iPhone just as the financial and subprime mortgage crisis erupted in 2007. The entire world staggered into a global recession in 2009.

During this period, notable Apple analysts kept talking about how the company was going to be hit by "global macroeconomic factors," and many began recommending that Apple needed cheaper products that economically battered individuals and businesses could afford. They were wrong. Apple continued building advanced iPhones at the same or advancing price points, to wild success.

Apple also launched increasingly fancy Macs during the peak of the Great Recession, including the all-new, very expensive 2008 MacBook Air with an advanced unibody aluminum design that was quickly incorporated across its MacBook Pro line as well.

MacBook Air 2008
MacBook Air


To analysts, Apple was doing all the wrong things. It was nearly unanimous for analysts to insist that Apple desperately needed to join Acer, Asus and other failed PC makers in building cheap netbooks, the low-end portable mini-laptops that were cheapened down into a miserable but broadly affordable experience.

Analysts wouldn't stop talking about about this through most of the Great Recession, and tech industry columnists kept giving them airtime to blow out their hot air about how wrong Apple was to be investing in high-end Macs when the PC market was getting eaten up by huge shipments of netbooks. They were wrong.

Just as that recession began to heal, Apple released a followup to iPhone, taking full advantage of the three years of iOS platform development it had built around its new phone to deliver iPad. Rather than being patterned after a $330 Acer Netbook saddled with a sluggish Intel Atom processor running Linux -- or optionally "upgraded" to Windows XP Home -- Apple created iPad as a tablet-sized iPhone with the same snappy quick interface and no exposure to the problems of web Java, Flash, or other malware.

The entire world of netbooks collapsed. PC makers scrambled to copy iPad using Android or Windows RT or anything that might deliver a similar experience of simplicity, long battery life, and ease of use. Every one of these companies failed to build a successful tablet business, but market researchers and analysts desperately worked to cover this up by drawing attention to how many tablet devices were being shipped.

Intel lost billions of dollars trying to pay tablet makers to use its chips. Google derailed the development of Android phones for over a year in a failed stab to deliver Android 3.0 Honeycomb tablets. It kept trying to deliver Android tablets of its own for the next decade, attempting PC-like slates with Motorola, then trying the ultra-cheap Nexus 7 with Asus, then just ripping off Apple's iPad mini verbatim with the Nexus 9 clone job with HTC. Google, and Android, failed miserably.

Reading the work of tech writers from the last decade, you'd only get the impression that it was Apple that was failing with its iPads, due to its "losses" in market share to the loss-leader shipments dumped by PC failures, and then the collapse of sales that occurred when Apple transferred the value of larger iOS screens from iPad to new, larger iPhones. Yet today, Apple still has a roughly $20 billion tablet business and everyone else has nothing to speak of in the market between phones and PCs.

iPad fake news
The honking noises of punditry were consistently wrong

Tim Cook's first recession as CEO will likely look a lot like his two as COO

If the global economy enters another extended downturn, it will be Tim Cook's first recession as CEO of Apple. But Cook witnessed both of the recessions described above while working under Steve Jobs in the period between Cook's arrival at Apple in 1998 and Jobs' passing in 2011.

Cook witnessed the dramatic turnaround of Apple first hand under Jobs during this period, as the company dramatically shifted from being beleaguered during a boom to recovering with iPod in one recession, and then in building up an iOS empire through good years and bad using the same strategies of advancing affordable luxury technology at prices that appeared to be premium relative to the rest of the industry.

How Cook manages Apple through whatever economic waves are to come will likely look a lot like Apple's immediate past. And one facet of that parallel will be that analysts and pundits will be critical of its success while recommending the failed strategies that are clearly destroying Apple's remaining rivals.

Apple's growth during the implosion of conventional PCs

Back in 1996, the Beleaguered Apple was indeed seriously troubled. It's useful to point out that analysts and pundits at the time had almost unanimously and uncritically endorsed the company's various plans over the previous five years. Amongst recovery plans were development of a modern operating system, new chip fabrication in partnerships with Acorn and IBM, developing multimedia as a new market for its computers, the mobile Newton PDA platform, OS licensing to third-party hardware makers, and selling Macs via various retail outlets.

However, those initiatives-- as implemented-- all turned out to be expensive mistakes that failed to make a difference or provide any hope of a solution to Apple's increasing problems in finding demand for its existing primary product of Mac computers. Punditry really didn't predict any of that. They were dumbfounded that the once great Apple had fallen apart in the 1990s, and the only reason they could offer was that Microsoft was so incredible that Apple just couldn't keep up.

However, fifteen years later in 2011, those factors had all changed dramatically. Under a decade and a half of Steve Jobs-- whose leadership and decisions were regularly ridiculed and disparaged by many of those same analysts and pundits-- Apple now had a leading, modern OS; it was successfully building its own custom silicon, it had created new markets for music and apps and new services to sell its hardware; it had successfully launched iPhone and iPad, growing into a leading mobile device manufacturer; it had grown wildly successful in using contract manufacturers to build its devices; and it now had a global chain of retail stores selling them.

But the composite wisdom of most analysts and pundits not only doubted Jobs as he made decisions; it also insisted that everything Jobs had accomplished by 2011 was fragile and temporary. Further, they also insisted that without Jobs Apple would have nothing at all providing the "vision" that they once ridiculed and then pretended to respect in retrospect. In part, this was because few outside the company knew much about Cook or anyone else apart from the great showman who had introduced Apple's new products with such charisma.

At the same time, those critics also turned around and praised the companies pursuing commodity pricing and broadly licensed platforms-- those that in hindsight were clearly doing the wrong things and were being set up to achieve failure.

It was the companies outside of Apple that were hurting in 2011. Microsoft and Google were struggling to catch up in OS technology; Windows was rapidly retracting from being a global monopoly over every facet of personal computing into merely being a plateauing platform being eaten up by mobile devices; it was Texas Instruments, Nvidia, and Intel who were the chip designers running out of mobile design wins; app stores from Palm, Blackberry, Nokia and Microsoft were all fighting to survive; various efforts by Palm, Microsoft, Motorola, HP, Dell and Samsung to build tablets or mobile media devices were flopping; and mobile platform licensing efforts by Microsoft, Nokia and others were imploding as Google distributed its own Android platform for free.

At the same time, Apple's iOS platform kept growing more successful despite a wall of naysaying analysts and journalists who regularly reported how powerless Apple was in the face of a united front of Android licensees-- including shameless fawning over Motorola, then newly aligned with Google. Tech media coverage from 2011 reads like a bunch of clowns trying to flatter Microsoft and Google, not at all like journalists working to accurately report on the current state of the industry.

Motorola
The shameless fawning over Motorola didn't hold up well


Apple's success since 2011 helps to highlight how dramatically false the media's current portrayal of Apple could also be today, once we accept the fact that these pundits have an absolutely terrible track record in charting out the future direction of the tech industry. They really don't know what's happening, and they certainly don't understand why.

Tim Cook expanded Apple's computing business as PCs shrank by a quarter

Since Jobs' passing in 2011, Apple has been lead by Tim Cook. Under Cook, Apple's Macs have grown from almost $22 billion in sales to more than $25 billion annually while overall PCs shipments have collectively collapsed by about a quarter globally-- and that's including Apple's growth. That occurred despite Apple maintaining an ASP of Macs of around $1,200 in an industry where Windows PCs sport ASPs of around $500. Apple's Macs have been growing in spite of a roughly $700 price premium among rivals who are seeing a major decline in shipments, let alone profitability.

That fact alone is a blow to all the self-appointed experts who offer their advice about how Apple needs-- more than anything else-- to offer cheap products. What PC maker is that working for? And why would Apple be any different than Acer if it were doing all the same things?

Note that ASP only compares the average selling price of all products sold, regardless of their quality or bundled specifications. It's not that Apple is pricing its Macs $700 higher; it's that customers are choosing to pay $700 more for a Mac versus buying one of the many, much cheaper PCs available. The myth that Macs were always "too expensive" was generally just as wrong as today's fiction that iPhones are too expensive to survive.

It's tempting to suggest that if Apple had dramatically lowered its Mac pricing over the last decade, it would be selling even more computers, achieving higher market share, and making even more money. But that was the losing strategy for other American PC makers and has not resulted in sustainable profitability for Asus, Samsung, or PC makers in China. Instead, low pricing has lowered the quality and attractiveness of conventional PCs, particularly in comparison with simpler, easy to use, and more mobile devices including Apple's iPad.

Apple's less expensive new product holding up Mac ASP

Over the last decade, Apple changed how it reports iPad revenue. Back in 2011, iPad was already a $20 billion business inclusive of services and accessories. Today it's an $18.8 billion business, solely counting iPad hardware sales. Services by themselves grew in parallel from previously bundled figures plus about $3 billion in non-hardware related services into a $37.2 billion enterprise on their own.

So again, the relatively premium pricing of iPads, serving as Apple's entry-level computing tier below Macs, has helped Apple maintain and grow both of its two non-phone computing hardware businesses while adding billions in related services growth. Outside of Apple, PCs have collapsed by a quarter and tablet sales have all but dried up and blown away.

Cheap Nexus Android tablets, Chromebooks, and Surface models sold by Google and Microsoft over the same period have not developed into growing, sustainable businesses but have been barely maintained as loss leader vanity hobbies that generate minimal revenues and very likely lose significant amounts of money considering the efforts burned up on developing and marketing those duds.

iPad Pro
iPad Pro is growing next to Macs in a PC market that's shrinking


Yet if you read current industry analysis and the thoughts of columnists, you'd get the impression that Apple is plagued with both a desktop and a tablet platform that it doesn't know what to do with, while Surface is a veritable idea factory and Chromebook is revolutionizing education. It's like a newscast from North Korea fretting over whether the rest of the world will ever catch up to the domestic agricultural, economic and defense technology being developed under Dear Leader. It's so fantastically wrong that it sounds like it's trying to be wrong.

Apple is building the foundations of what's next

While the media's attention span has drifted away from tablets since Apple gobbled up virtually the entire market, the company has also successfully moved into new product categories. That's the very thing that pundits keep screaming that Apple isn't capable of doing.

The less-than $10 billion in iPod and "other hardware" Apple was bringing in back in 2011 has turned into a business for new Home and Wearable devices that delivered $17.4 billion in revenues over the past year. Apple Watch alone has become a business bigger than iPod had ever been at its peak, even as Samsung, Google, Microsoft and others have gone nowhere with their own fashion watches, sport bands, or other wearable initiatives.

And in home sales, Apple has not only established both Apple TV and HomePod with an installed base that has surpassed the sales of comparable products from Google, but has also successfully advanced strategies including HomeKit, HealthKit, CarPlay, iTunes and AirPlay 2 that expand the ecosystems that nurture and add value to Apple's hardware sales.

Naturally, a string of analysts and journalists have desperately reinterpreted this success as a fantastical fantasy of failure, suggesting that the recent licensing of iTunes playback to Samsung TVs-- in the model of putting iTunes on Windows PCs and Apple Music on Android phones-- is going to destroy the Apple TV hardware business.

Before that, they were holding up Apple Music's support for Alexa Echo hardware as the end of the road for HomePod. Yet the upgrade path for Echo users of Apple Music who want better sound is quite clearly HomePod, while the alternative upgrade scenario for Echo users of Spotify would be various other competing hardware products. The childlike grasp of the direction of the industry by most analysts and pundits is thought-provoking. Who pays them to utter such nonsense?

The ninth year of Tim Cook's Apple standing on the necks of smartphone rivals

Meanwhile, Apple's iPhone has grown from a $47 billion business in 2011 to a massively profitable $166.7 billion juggernaut, even as other phone makers struggle to make money. Counterpoint Research recently estimated that all of the smartphone factories in China are collectively earning a profit of around $2 billion, despite making so many phones. That was framed as a great success, but in reality, it shows that China entirely missed out on profiting from the golden age of smartphones and is now only minimally profitable in a market that is no longer growing dramatically. That's where PC makers were in 2011. There is no second shot for either group. They missed it.

You could look at the progress of Apple since 2011 as growth from $108.2 billion in revenues annually to $265.6 billion, net income that grew from $29.5 billion to $59.5 billion, or as the development of an installed base of users that grew from around 54 million Mac users and annual sales of 154 million iOS devices in 2011 to an array of over 1.3 billion active devices today-- including 100 million Macs-- used by an audience approaching one billion people.

Or you could imagine that Apple is in trouble because so many of the same columnists who saw no prospects for Apple back in 2011 continue to report their fears that the only consumer electronics company to successfully create multiple, wildly popular new multi-billion businesses "can't innovate" and its "prices are too high," the very same cliches they ignorantly spouted in 2011.

It's a safe bet they are just wrong again.
StrangeDaysmacpluspluslostkiwipalominewatto_cobra
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Comments

  • Reply 1 of 58
    I think Apple has a huge opportunity selling the MacBook Air 5G through wireless providers.  It would have fantastic battery life running an A Series chip, and have Office 365 support for business.  Offer it for $50/month (about the same as the high end iPhone) and it would dominate the PC market.

    I’d buy one...
    sarricagenovellebrucemcMisterKitwatto_cobra
  • Reply 2 of 58
    You mention a number of examples of "foundations of what's next." But the problem is, none of them truly measure up, yet.

    iPod/Watch/Wearables/Other HW: $11B on revenues of $108B in 2011 was 10%; $17.4B as a % of 2018 revenues is 6.5%. The size of needed wins grows at least at the same same rate as the size of the company.

    AppleTV: Apple has lost that race. It never got beyond a self-described hobby. 

    HomePod: Too tiny to even merit mention. Changes of it contributing significantly to anything anytime soon are remote.

    Services: This is a huge bright spot, and what will matter for this is the installed base of iOS devices. But Homekit/CarPlay are, so far, also-rans (there seems to be an issue of Apple not playing well with home appliance and auto manufacturers); competition for ApplePay is growing rapidly (esp. with contactless credit card payments), and moreover, Apple has done a lousy job of marketing it; iTunes is a bloated mess, and needs re-imagining/re-tooling from the ground up; iCloud is not terrible, but other cloud services and offerings such as Dropbox have eaten its lunch; AppleMusic is a solid addition, but I am dubious of its level of success outside the US; Healthkit is a massive opportunity in a multi-trillion dollar health industry, but it is still work in progress.

    I would not be surprised if the next year or two continued to be rocky for AAPL. That said, I am quite happy to hold.
    edited January 25 designrSpamSandwich
  • Reply 3 of 58
    The answer is No.
    Apple will become a services company, including media services, automotive, and medical.

    The iPhone will become secondary because different devices can consume Apple Services...
    iPhone, AppleTV, Apple Watch, Android Phones, Mac computer, Windows computer, automobiles, medical equipments etc...
  • Reply 4 of 58
    tbornottbornot Posts: 106member
    China having a recession might just buy us another decade before the Chinese Military is ready to start a ruckus with the US and Japanese Navies.  So, here’s hoping for confusion to the Emperor of China!
    tmay
  • Reply 5 of 58
    tmaytmay Posts: 3,567member
    tbornot said:
    China having a recession might just buy us another decade before the Chinese Military is ready to start a ruckus with the US and Japanese Navies.  So, here’s hoping for confusion to the Emperor of China!
    Unfortunately, I am in complete agreement with you, but recession or no, China's Ship buildout, per year, compares with the entire British fleet, and most of that will be detailed to the South China Seas and home waters adjacent to Taiwan, South Korea, and Japan.


    watto_cobra
  • Reply 6 of 58
    China’s GDP grew at nearly 10% for twenty years straight. It was bound to slow up at some point. Now it’s merely growing at 6%. I imagine it has to slow if only to prevent catastrophic inflation. 
    Markets always balance out over the long term so eventually it will settle and become normalized. If we can swing a deal with China on trade that lasts, things will probably improve for Apple over there, but for now it’s a tough row to hoe. 
  • Reply 7 of 58
    boltsfan17boltsfan17 Posts: 2,158member
    tbornot said:
    China having a recession might just buy us another decade before the Chinese Military is ready to start a ruckus with the US and Japanese Navies.  So, here’s hoping for confusion to the Emperor of China!
    China is still very far behind compared to the US Navy. Even the 44 ships they made between 2016-17 are still far less advanced than what the US Navy has. China has one soviet era aircraft carrier in service. The carriers the US Navy uses blow that out of the water. Another area where China really lags with its Navy is long range strike capabilities. It will take decades for China to get where the US Navy is now. 
    watto_cobra
  • Reply 8 of 58
    I've been very pessimistic, but you make a lot of good points. I still think there will be a recession, a hell of a bad one, for reason's we won't go into here. But Apple does have a history of weathering these events well. Plus unlike its competitors, Apple has the reserves to deal with severe changes without going bankrupt.

    of course I keep in mind what they say on all those stock broker ads: Past Performance is no Guarantee of Future Results.
    edited January 25 dedgeckolostkiwiwatto_cobra
  • Reply 9 of 58
    I just want more product category disruptions. Obviously I don't want products for no reason but I would love to see Apple shake up some product categories. I'm disappointed with the HomePod. It's barely a foot in the water and completely ignored home theatre enthusiasts.
    watto_cobra
  • Reply 10 of 58
    Apple sales in China are down purely as a tit for tat response to Trump putting a ban on Huawei. The Chinese government has told its people to stop buying Apple products. Once the trade dispute is over China will return to buying IPhones. 
    minicoffeewatto_cobra
  • Reply 11 of 58
    bitmodbitmod Posts: 233member
    I just want more product category disruptions. Obviously I don't want products for no reason but I would love to see Apple shake up some product categories. I'm disappointed with the HomePod. It's barely a foot in the water and completely ignored home theatre enthusiasts.
    HomePod... home theatre enthusiasts? 
     :D  :D :D :D :D
    CheeseFreeze
  • Reply 12 of 58
    tmaytmay Posts: 3,567member
    crosslad said:
    Apple sales in China are down purely as a tit for tat response to Trump putting a ban on Huawei. The Chinese government has told its people to stop buying Apple products. Once the trade dispute is over China will return to buying IPhones. 
    Huawei telecom has been banned by a number of countries including the U.S., for national security reasons, and Huawei has been banned by the U.S. Defense Department on any military installation and is blocked for sale at any Exchanges on or off base.

    Consumers can still buy Huawei, but no carriers have them.

    It is likely that China is experiencing a recession.
    StrangeDaysSpamSandwichwatto_cobra
  • Reply 13 of 58
    The answer is No.
    Apple will become a services company, including media services, automotive, and medical.

    The iPhone will become secondary because different devices can consume Apple Services...
    iPhone, AppleTV, Apple Watch, Android Phones, Mac computer, Windows computer, automobiles, medical equipments etc...
    I agree, partially.
    Apple’s own hardware is positioned to be more secure and more privacy focused. Instead of putting all the processing power on the cloud, they utilize the phone’s hardware more, which is evident in the latest generation of chips. If their strategy is putting power on the device, adding a security enclave chip and what have you they are basically selling devices that are positioned differently from any other manufacturer. You wouldn’t be able to use some of Apple’s services on an Android phone because of that.

    Secondly, Apple is quite behind on services in general. Whether it’s Siri, a team productivity suite (e.g GSuite), or Google Calendar, Apple has a lot of catching up to do if you look at features and usefulness of Google’s offerings. They’ll have to be more enterprise focused and not just consumer focused. Nobody is waiting for Apple Pages to make a nice birthday letter, but many are using Google Docs as an example because it is highly functional and eases in all the way to large group collaboration. 
    designrwillettwatto_cobra
  • Reply 14 of 58
    I think Apple has a huge opportunity selling the MacBook Air 5G through wireless providers.  It would have fantastic battery life running an A Series chip, and have Office 365 support for business.  Offer it for $50/month (about the same as the high end iPhone) and it would dominate the PC market.

    I’d buy one...
    That is an amazing idea
    watto_cobra
  • Reply 15 of 58
    I'm disappointed with the HomePod. It's barely a foot in the water and completely ignored home theatre enthusiasts.
    Where did Apple frame the HP as a home theatre offering? It was squarely marketed for music.

    That being said, I use mine for Apple TV video as well. I even bought a $400 Sonos Beam since I'd read (hear and elsewhere) that it was better for dialog, but in many A:B tests we concluded the HP sounded better there too (music was no a no-question win). Returned. I'd be curious how HP compares to the expensive, big Bose sound bar, but I'm not sure I'm ready to put that in my living room yet. The HP is almost invisible it takes up so little space.
    edited January 25 brucemcwatto_cobra
  • Reply 16 of 58

    crosslad said:
    Apple sales in China are down purely as a tit for tat response to Trump putting a ban on Huawei. The Chinese government has told its people to stop buying Apple products. Once the trade dispute is over China will return to buying IPhones. 
    You're mistaken. The US intelligences agencies (no friend to Trump) are the ones who laid down the case against that brand, telling the intelligence committee they are controlled by China. These are the same US intelligence agencies that said Russia helped Trump win. I see no reason to doubt them because android. 
    brucemcmacplusplusRayz2016watto_cobra
  • Reply 17 of 58

    The answer is No.
    Apple will become a services company, including media services, automotive, and medical.

    The iPhone will become secondary because different devices can consume Apple Services...
    iPhone, AppleTV, Apple Watch, Android Phones, Mac computer, Windows computer, automobiles, medical equipments etc...
    Secondly, Apple is quite behind on services in general. Whether it’s Siri, a team productivity suite (e.g GSuite), or Google Calendar, Apple has a lot of catching up to do if you look at features and usefulness of Google’s offerings. They’ll have to be more enterprise focused and not just consumer focused. Nobody is waiting for Apple Pages to make a nice birthday letter, but many are using Google Docs as an example because it is highly functional and eases in all the way to large group collaboration. 
    I just haven't seen this. IMO all the digital assistants are novelties at best, useful only for routine tasks like reminders, texts, scores, and some useless trivia.

    Waiting on Pages to make nice looking letters? We're not waiting at all, it has for years. In two decades of working in enterprise I've never had to engage in "team productivity" in office apps, most often we each work offline and check-in the document to SharePoint or another repository, but I like what I've seen in the iLife suite's web client, which includes collaboration. And I have no idea what more I need in a calendar?
    macpluspluswatto_cobra
  • Reply 18 of 58
    thttht Posts: 3,110member
    I continually hope that Apple stays a product company, ie, it designs and sell hardware that does stuff, and just thinks of services as a side business or a product amplifier. They are fine coasting with 10% of the phone and computer markets, and really hope they continue them even though it may be boring. Maybe they take a 20% chunk of the entertainment content market, who knows, but that is only a service as it were, not a product that delights.

    Don’t knock the wearables market. It has potential to be just as big as the phone market. A wearable with a noninvasive glucometer? $1000 per unit with tens to hundreds of millions of units that can be sold. It’s really a constellation of products including watches, headphones, clothes, etc.

    There is still a possibly that they’ll sell electric vehicles. Selling a automated driving system is about as exciting as a root canal to me. But an actual vehicle? Exciting.

    I think it would be great if they could get into the home energy/utility business. Offer heat pumps, battery storage, water recyclers, water collectors, solar panels, gas collectors, air recyclers/purifiers, etc. Not a huge market yet, but eventually every household in the world could be in the market to get them.

    There’s also the food business, which is essentially an outgrowth of the health business they are trying to get into. Artificial meat?
    lostkiwiwatto_cobra
  • Reply 19 of 58
    I don't agree that Apple will need to cut prices to sustain a long term China strategy. Rather they can introduce more products for that market's price point, which appears to be the India strategy.

    China's ability to copy is limited, and as Apple's technology continually improves it becomes harder to copy it. Take for example Qualcomm's chip designed for smart watches, benchmarking reveals that it isn't getting faster with each iteration. Effectively hamstringing any Chinese (or Google's partners for that matter) effort to duplicate the advanced features of Apple Watch. Now multiply this across Apple's steadily growing product range, after 3 years there is still nothing on the market that compares to the W-series of chips, the result is that even premium products don't offer the range and stability of Apple's Airpods/Beats range of wireless headphones. The groundwork for further examples can be found, Apple have realised that in order to produce hardware that stays differentiated, they too need to produce the most significant technological advancements entirely in house.
    DoctorQlostkiwiwatto_cobra
  • Reply 20 of 58
    brucemcbrucemc Posts: 1,524member
    tbornot said:
    China having a recession might just buy us another decade before the Chinese Military is ready to start a ruckus with the US and Japanese Navies.  So, here’s hoping for confusion to the Emperor of China!
    China is still very far behind compared to the US Navy. Even the 44 ships they made between 2016-17 are still far less advanced than what the US Navy has. China has one soviet era aircraft carrier in service. The carriers the US Navy uses blow that out of the water. Another area where China really lags with its Navy is long range strike capabilities. It will take decades for China to get where the US Navy is now. 
    Indeed.  I am not American, and don't have a horse in the race, so this is a non-partisan, non-national comment.  A single US carrier battle group has more offensive capability (not including nuclear weapon capabilities in this) than the entire Chinese navy.  US carriers have been refined over 8 decades of combat use, and over 5 decades with nuclear propulsion / very large carrier designs.  

    China currently has a couple of active ex-Soviet units, and are bringing to market their own designed ships based on those (building a 3rd carrier reportedly).  Did you know that the Soviet (and current Russian) ships have ramps (curves up) at the front to launch the planes, and don't use catapults like the US navy?  That is because it is much cheaper to do so.  But is also means the launch weight (in terms of plane type, fuel, and ordinance) is limited.  US carriers do not have this problem, and are FAR more capable in all areas as a result.

    China is over estimated in the media, both economically and militarily.  Yes, they are a market of almost 1.4B humans, and as such there is big $$ to be made in selling to so many (it is a desirable market), but their economy has serious problems that will become more apparent in the next 20 years.  First is that the population as a whole is rapidly aging, due to their very low birth rate and almost no immigration.  25% of the population is estimated to be over 65 by 2030, up from 13% not that long ago.  Their workforce in total numbers is already shrinking.  There are 30M *less* women than men due to the one child policy and family bias.  Macro trends are not in their favour.  Secondly they also have a very state led economy, which tends to be less innovative and flexible.  Third is the continual erosion of civil liberties (it is getting more controlled, watched, and cut off from the rest of the world) which is unlikely to be economically positive.

    If I am Taiwan or the Philippines, I can see being nervous.  Not if I was the USA.
    tmaycorrectionsMacPro
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