Oppenheimer: Apple 'lacks the courage to lead the next generation of innovation'
Oppenheimer analysts have issued an unusually scathing Apple investor memo, charging that the company is headed in the wrong direction and poised for a "decade-long malaise" as a result.
"We believe Apple lacks the courage to lead the next generation of innovation (AI, cloud-based services, messaging); instead will become more reliant than ever on the iPhone," senior analyst Andrew Uerkwitz wrote in the memo, seen by Business Insider. "We believe Apple is about to embark on a decade-long malaise. The risks to the company have never been greater."
Apple has often been accused of being too dependent on the iPhone, which by far represents the biggest share of its revenue. In the September quarter for instance the company generated some $28.16 billion from iPhones, but a little under $5.74 billion from Macs, and still less from iPads.
Since the death of former CEO Steve Jobs in 2011, Apple has only introduced one new device category -- the Apple Watch -- which has sold better than most smartwatches, but is still marginal to the company's bottom line. Most of Apple's efforts have been devoted to revamping or expanding existing categories, for example overhauling the Apple TV or adding more iPhone and iPad models.
Oppenheimer's complaints refer to things like the Siri voice assistant, which critics have complained is less powerful than similar assistants from Amazon and Google. Apple did introduce major enhancements to Messages in iOS 10, including support for built-in apps, but the platform is still iOS/Mac-only and lacks some of the features in alternatives like Skype or Facebook Messenger, such as bots.
Reports have hinted that Apple is working to fix gaps in Siri, and indeed release a smartspeaker in 2017 that could compete with the Amazon Echo and Google Home.
Uerkwitz is keeping a "Perform" rating for Apple stock, arguing that for now investors will be attracted to "strong profitability, a cash hoard for protection, and one last 'growth' hurrah from the tenth-anniversary phone."
"We believe Apple lacks the courage to lead the next generation of innovation (AI, cloud-based services, messaging); instead will become more reliant than ever on the iPhone," senior analyst Andrew Uerkwitz wrote in the memo, seen by Business Insider. "We believe Apple is about to embark on a decade-long malaise. The risks to the company have never been greater."
Apple has often been accused of being too dependent on the iPhone, which by far represents the biggest share of its revenue. In the September quarter for instance the company generated some $28.16 billion from iPhones, but a little under $5.74 billion from Macs, and still less from iPads.
Since the death of former CEO Steve Jobs in 2011, Apple has only introduced one new device category -- the Apple Watch -- which has sold better than most smartwatches, but is still marginal to the company's bottom line. Most of Apple's efforts have been devoted to revamping or expanding existing categories, for example overhauling the Apple TV or adding more iPhone and iPad models.
Oppenheimer's complaints refer to things like the Siri voice assistant, which critics have complained is less powerful than similar assistants from Amazon and Google. Apple did introduce major enhancements to Messages in iOS 10, including support for built-in apps, but the platform is still iOS/Mac-only and lacks some of the features in alternatives like Skype or Facebook Messenger, such as bots.
Reports have hinted that Apple is working to fix gaps in Siri, and indeed release a smartspeaker in 2017 that could compete with the Amazon Echo and Google Home.
Uerkwitz is keeping a "Perform" rating for Apple stock, arguing that for now investors will be attracted to "strong profitability, a cash hoard for protection, and one last 'growth' hurrah from the tenth-anniversary phone."
Comments
I still love my Apple products (most of the time), but I've been feeling there's been a slide...
Specifically, I always felt that Apple wanted everything it "made", hardware or software,
to be cosmically as close to perfect as they could get it. More and more often, it "feels" as if
they are willing to settle for "better, or what we can argue effectively is better, is good enough".
And, that this is an acceptable standard, so long as stock options are still vesting,
and nobody "ahems" too loudly when they are cashed in.
Still, it's in their history to suddenly astound with something we didn't even know we were missing.
But the longer that goes without happening (and they've set that bar so high), the harder it is to assume
that patience will pay off...
Also, I also feel like some really interesting acquisition possibilities -- e.g., Harman Kardon -- have been left on the table or lost to competitors. Even a McLaren (or a Ferrari, now that it's a publicly traded company) would send a tremendous signal.
So to say they don't innovate means that the writer does not understand the meaning of the word. What he wants to say is "invent". But Apple is not known for invention. Yes they do R&D and have a huge patent portfolio, but they don't come up with new classes of computing.
All the things that are mentioned that Apple isn't doing, I can guarantee you they ARE doing. But they aren't going to announce it to the world because most of them are probably business flops. What they will do is hone that technology until it's ready and then market it. Apple always maintains the element of surprise.
Don't get me started on Siri. Who actually uses that?
And here's an ad for a samesung VR device with people enjoying it.
Perhaps there's a legitimate fear that Apple will be targeted (again) by the powers that be for not collecting data to be used for "advertising".
Break out the labor concerns, the tax concerns. Apple will be the biggest offender ever!