But man, delivering bad news was one area where Steve Jobs really shined in a way that Tim Cook just can’t. Look at the tight construction of that message from Apple in 2002. First paragraph: put out the numbers. Second paragraph: it’s an industry-wide problem, but Apple has “amazing new products” coming. And then the kicker, the dagger: “As one of the few companies currently making a profit in the PC business…”.
We’ve got some short term bad news but don’t worry, we have this.” And… out. Short and sweet. Rip off the bad news Band-Aid, express quiet confidence that Apple is in great shape, and that’s it. Message over.
Even if Jobs were still around I don’t think Apple could get away with a message so short with today’s news. But Cook’s letter was just too long. There was no story to it, no narrative. It should have been something along these lines (paraphrasing for succinctness, obviously — well, maybe not obviously):
We all know the Chinese market is fucked up — half because China is China and half because of you-know-who’s dumbass trade war. This quarter that fucked-upped-ness hit iPhone harder than we expected. But China is the whole problem — everything else is noise. Customers around the world love the iPhone XS, XS Max, and XR, and iPhones account for 90 percent of the profits in the entire handset industry. We expect that to grow as our competitors struggle to differentiate themselves from each other.
Boom, drop the mic.
I think he is right that the letter was too long and was all over the place like let’s just throw things at the wall and see which one sticks. But I think the rest of his post focuses way too much on China, especially China & Trump. Apple didn’t revise down guidance because of Donald Trump. And this so-called trade war was well known/discussed when Apple put out guidance for Q1 on their Q4 earnings call. And when you’re revising revenue guidance down $5B to $7B the market is not really going to care that you’re generating the most profits in a segment with declining growth. But Gruber is right that Jobs was better at delivering bad news.
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Yes. Apple should totally be thinking about this. The market for smart TVs isn’t close to being saturated. And the easiest way to get people to sign up for your streaming tv service is to make it easy to access right from your TV set.
Apple isn’t going to compete with LG and Samsung in hardware TV sales since it would have to license LG or Samsung to build the TVs. They could license TvOS if anybody cared.
Samsung and LG are the only companies that make TV panels?
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Yes. Apple should totally be thinking about this. The market for smart TVs isn’t close to being saturated. And the easiest way to get people to sign up for your streaming tv service is to make it easy to access right from your TV set.
Then that’s a big reason to by netflix or HBO
Apple has net 120B. Either of those companies would cost more. Also what’s the advantage? How would Netflix sell more iPhones?
It’s not about selling more iPhones. That market is saturated. It’s about how do we growth revenues off of people who already have iPhones (until the next big revenue driver that replaces iPhone comes along).
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
That makes zero sense. Whats's the difference between your TV plus an AppleTV versus an Apple-built TV with a built-in AppleTV? Nothing.
What’s the difference? A better user experience. And not having to fork over additional dollars for a streaming media box and cable to connect to my TV. With one push of a button I can see all my streaming apps and easily launch Netflix, HBO, Amazon etc. What is the point of having dongles and boxes when it can all be built right into the TV?
You said you have a 4K TV and an Apple TV that you never use because you have Roku in the TV. There's nothing preventing you from simply powering on the TV automatically when you turn on the ATV and only using the ATV interface until it turns off again, yet you said if they made a TV with ATV built in, you'd buy one. That's what I mean makes no sense, both that you don't use your ATV even though you espouse its qualities, and that you'd buy a TV with it built in as if you had some barrier to using the one you have, which you don't — not the product idea itself, which more or less makes sense (I have an ATV, I know how it works).
Again I said it was about user experience. The Roku experience isn’t bad. But if there was an option to buy a TV with tvOS instead of Roku I’d probably do it. Smart TVs that have this stuff integrated are pretty much frictionless. No need to buy and set up a separate streaming box. The only pain is is initially having to log into all the streaming apps with your cable/satellite provider credentials. Of course Apple could make that experience better. And as someone else suggested they could do other things as well like FaceTime, Face ID, HomeKit integration. There are possibilities here.
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Yes. Apple should totally be thinking about this. The market for smart TVs isn’t close to being saturated. And the easiest way to get people to sign up for your streaming tv service is to make it easy to access right from your TV set.
Then that’s a big reason to by netflix or HBO
Apple has net 120B. Either of those companies would cost more. Also what’s the advantage? How would Netflix sell more iPhones?
It’s not about selling more iPhones. That market is saturated. It’s about how do we growth revenues off of people who already have iPhones (until the next big revenue driver that replaces iPhone comes along).
To actually grow revenue Apple actually have an innovation good enough to get people to switch. That was supposed to be faceId but that only got upgrades. Other than that Apple mostly relies on commodity hardware that other companies can also buy and sell.
1. Apple’s reluctancy to do major investments through acquisitions is ridiculous. 2. Apple’s price hikes is a short-sighted stopgap to counter lower unit sales and it’s alresdt failing. Their weak iCloud services need to be improved to match Google’s or Microsoft’s, so that enterprises and pro-users will find it a compelling alternative. iPhones and iPads are just vending machines for services, so stop overcharging for those and focus on SaaS more.
Apple needs new leadership, someone who’s
Is it safe to assume Forstall's phone is ringing right about now? /S
Probably not because most Boards of Directors are picked by the CEO especially when they have been there a few years. But the do need some who is more innovative.
1. Apple’s reluctancy to do major investments through acquisitions is ridiculous. 2. Apple’s price hikes is a short-sighted stopgap to counter lower unit sales and it’s alresdt failing. Their weak iCloud services need to be improved to match Google’s or Microsoft’s, so that enterprises and pro-users will find it a compelling alternative. iPhones and iPads are just vending machines for services, so stop overcharging for those and focus on SaaS more.
Apple needs new leadership, someone who’s
Is it safe to assume Forstall's phone is ringing right about now? /S
Probably not because most Boards of Directors are picked by the CEO especially when they have been there a few years. But the do need some who is more innovative.
Innovative in what way? Where exactly has Apple not innovated that others have? One could argue voice or home automation but I don’t see any big area where others have innovated and Apple hasn’t. Their silicon team is best in the business. My XS and iPad Pro are the best tech products I’ve ever owned. Same with my Apple Watch. I don’t own AirPods but people that do speak very highly of them. Perhaps the tech industry in general is in a lull right now and there won’t be a next big thing for a while.
Personally, I’m not that crazy about the “X” phones and may get an iPhone 8 instead. I don’t want to give up the ease of use I like about having a home button to be honest and I don’t care for Face ID.
Not a great fan of faceid myself and I have a X. The failure rate of the faceid vs finger id is at least 10x higher.
100% flat out wrong. Face ID is almost flawless whereas touch ID depends on the weather, humidity, wetness, etc. all i know os i look at my phone and BOOM: its open and i can navigate 10 times faster without that dumb home button, Wake up: face ID is here to stay
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Yes. Apple should totally be thinking about this. The market for smart TVs isn’t close to being saturated. And the easiest way to get people to sign up for your streaming tv service is to make it easy to access right from your TV set.
Apple isn’t going to compete with LG and Samsung in hardware TV sales since it would have to license LG or Samsung to build the TVs. They could license TvOS if anybody cared.
Samsung and LG are the only companies that make TV panels?
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Yes. Apple should totally be thinking about this. The market for smart TVs isn’t close to being saturated. And the easiest way to get people to sign up for your streaming tv service is to make it easy to access right from your TV set.
Apple isn’t going to compete with LG and Samsung in hardware TV sales since it would have to license LG or Samsung to build the TVs. They could license TvOS if anybody cared.
Samsung and LG are the only companies that make TV panels?
Effectively the only high end makers these days.
Maybe they deserve some competition. Or maybe if this is more about services than selling expensive TVs Apple doesn’t need to play in the very high end space.
If Apple really is transitioning to a services company then they’ll have to move away from every product being a pricy piece of hardware. No one wants to pay $1000 for a phone and then have Apple say give us $10 for Apple Music, and $10 for Apple Video and $10 for Apple News etc.
I wish Apple would move to Apple as a service and offer something like the iPhone upgrade program for all their hardware products and allow people to bundle it with services. I priced out what I currently own + Apple Care + Apple Music and it would cost me about $150 a month. And that’s assuming a yearly iPhone and Apple Watch upgrade and an iPad upgrade every 2 years. I would totally do something like that. And maybe they could offer incentives if you bundle more things. Like if you subscribe to Apple Music + Apple Video + Apple News you get a discounted monthly price. Plus it would satisfy Wall Street’s love of recurring revenue streams.
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Yes. Apple should totally be thinking about this. The market for smart TVs isn’t close to being saturated. And the easiest way to get people to sign up for your streaming tv service is to make it easy to access right from your TV set.
Then that’s a big reason to by netflix or HBO
Apple has net 120B. Either of those companies would cost more. Also what’s the advantage? How would Netflix sell more iPhones?
It’s not about selling more iPhones. That market is saturated. It’s about how do we growth revenues off of people who already have iPhones (until the next big revenue driver that replaces iPhone comes along).
Netflix is very well run, but it doesn't have much IP or a moat. All you get is their customers, which is fine if you want to diversify into being a streaming service for all ( but Apple doesn't), and some of their originals which are, while good, not worth that price. They also have some contracts with some studios but they are probably time limited.
The cost would be > than the net 120B Apple has in cash. The current market price is 116.72B ( as of Jan 3rd 12:45 GMT), a bidding war would push that higher. For that kind of money you can commission a lot of content.
Rene Ritchie (@reneritchie) 1/2/19, 5:24 PM IMHO, complaints about pricing, price points, home buttons, headphone jacks, batteries, upgrade cycles, etc. are all valid but are also all besides the point, which remains: Can Apple transition iPhone from growth driver to platform that enables more growth drivers? That’s it.
This is pretty spot on. Apple has hundreds of millions of iPhone customers. How do you get those people to buy more things? And what are those things? Clearly they aren't Macs. They are AirPods, however. And Apple Music subscriptions. Video is the logical next step.
As someone who has bought Apple products (and stock) for almost 40 years, I remember many long years where Apple sold 1 device for every 1000 the other guys sold. They struck silver with the iPod and then gold with the iPhone. The iPod appealed to all sorts of people. You didn't have to be a techie. Apple built a better mousetrap and the public responded. And then came the iPhone. Everyone needs a phone. Apple built a better phone and, again, the public responded. So what else has incredibly broad appeal and needs a better use experience? And is Apple even the company to deliver these days? I personally wish they'd focus more on home automation and deliver some killer first party products in that area. I also think they should get serious about audio, maybe buy Sonos. HomePod was a huge miss. I would have bought at least 6 for my house if it wasn't such a gimped product.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
I completely agree on TV. Like you, I've also observed that the TV part of the store is always the busiest. I know there are many negatives when it comes to the TV business, but I think Apple could do for TV (hardware, as well as media distribution and discovery) what it did for portable audio and telephony.
Yes. Apple should totally be thinking about this. The market for smart TVs isn’t close to being saturated. And the easiest way to get people to sign up for your streaming tv service is to make it easy to access right from your TV set.
Apple isn’t going to compete with LG and Samsung in hardware TV sales since it would have to license LG or Samsung to build the TVs. They could license TvOS if anybody cared.
Samsung and LG are the only companies that make TV panels?
Effectively the only high end makers these days.
Maybe they deserve some competition. Or maybe if this is more about services than selling expensive TVs Apple doesn’t need to play in the very high end space.
If Apple really is transitioning to a services company then they’ll have to move away from every product being a pricy piece of hardware. No one wants to pay $1000 for a phone and then have Apple say give us $10 for Apple Music, and $10 for Apple Video and $10 for Apple News etc.
I wish Apple would move to Apple as a service and offer something like the iPhone upgrade program for all their hardware products and allow people to bundle it with services. I priced out what I currently own + Apple Care + Apple Music and it would cost me about $150 a month. And that’s assuming a yearly iPhone and Apple Watch upgrade and an iPad upgrade every 2 years. I would totally do something like that. And maybe they could offer incentives if you bundle more things. Like if you subscribe to Apple Music + Apple Video + Apple News you get a discounted monthly price. Plus it would satisfy Wall Street’s love of recurring revenue streams.
I agree with that, and I think they should license tvOS if they could. They kind of have a licensing model in the US for iPhones.
I wouldn't discount accessories either. Apple is spending a lot of money on R&D for something.
Agree 100%. And with a new video service coming maybe Apple should get into the TV business. I know TVs are a low margin business but it wouldn’t be about the TV so much as about tvOS and Apple’s video service. Every time I go into Best Buy the busiest part of the store is their TV section. I have a 4K TCL TV with Roku. I hardly ever fire up my Apple TV box. But if Apple sold a smart TV with tvOS and all the benefits of the Apple ecosystem I’d seriously think about getting one. And it wouldnt have to be outrageously priced because it would be all about getting Apple video service subs.
That makes zero sense. Whats's the difference between your TV plus an AppleTV versus an Apple-built TV with a built-in AppleTV? Nothing.
Well, for one thing, an Apple Television would come with a ridiculously "minimalist" and annoying remote with no way to improve the experience because they will have locked out the use of any third party alternative.
This was also in cook’s letter so it’s not just China.
https://www.apple.com/newsroom/2019/01/letter-from-tim-cook-to-apple-investors/ While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be. While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.
So it is the $29 battery (that cost them less than a $1) fault. Lol
No, it's the fact that a $29 battery replacement is cheaper than a $750+ new phone, and that the publicity surrounding "batterygate" made people stop and actually think about refreshing their current, perfectly good, phone instead of laying out cash for a new one because their old one was slow.
I am holding off on a new iPhone and am sticking with my 6S Plus for a while longer due to Apple's higher prices. I'm sure I am not the only one...
I have a two year ild SE I had thought avout updating. Nope. With the closest replacement starting at $1k ill keep it for another couple. Had thought about an Apple Watch 4. After hemming and hawing I didn’t. The price is just more than I’m willing to pay right now.
Apple has moved from high end to boutique and I've been saying that for a while.
People don't question reasoning or assumptions well enough to get to the root of the problem.
Hey Apple isn't charging too much, people are just holding onto their phones longer.....
Time to question that assumption and what lies beneath it to a far deeper problem......
Why are you holding onto your older iPhone?
Well I bought this iPhone 6s+ or iPhone 7 and it cost me $900-1000 but I JUSTIFIED IT to myself by saying I would keep it for three or four years.
So the real crux of the problem started with the LAST purchase, not the current or next purchase. People loved iPhones but felt they were too expensive when they purchased their CURRENT iPhone.
So you've got a hot economy, a little extra pocket money per chance and you are thinking you've met your prior timelime for the most part and so you go to the Apple Store intent on doing pretty much what you did three years ago, buying yourself a large screen iPhone with some extra storage.
You price it out and it is......nearly $1500 ($1449).
So you reason to yourself, wow..... I guess nothing is really wrong with my current phone. Even if it needs a new battery or screen or home button, there's a place nearly that does that for a reasonable sum. I'll just stretch it a bit longer.
In our house we own an iPhone 7, iPhone 8+ (wife sent her iPhone through the washer) iPhone 6S and iPhone 6... all with second tier storage.
I love having the latest and greatest but was shocked when I went to look at the iPhone 8 and Apple had removed that middle tier while raising the price by $50 for baseline model. My same purchase decision as the year before now cost $150 more.
So I simply decided to skip it.
The iPhone X came out and the of course there was another price increase on top of the prior price increase and the middle storage tier was still gone. My iPhone 7 with extra storage was $750. The same purchase decision with the iPhone 8 was $900. My exact same purchase decision with the iPhone X or XS.... $1150.
So each time I simply decided to forgo the new purchase and keep my current iPhone. It isn't just that people are DECIDING to keep their iPhone longer. It is WHY they are choosing to keep them for longer. Each price increase made me decide to just forgo and wait for Apple to change their behavior. Apple hasn't changed their behavior yet so myself and clearly millions of others have made the decisions we have made which is to stay in the Apple ecosystem but not to buy a new iPhone. We've only bought a new iPhone when one was destroyed.
Now some will chime in and say what about the iPhone Xr and you could go purchase that phone instead. I noted my exact same purchase decision criteria and the price point for it. The iPhone Xr forgoes many of the reasons to buy a new iPhone including features my current iPhone has right now. It doesn't have a second camera and it does not have force-touch ID. Again the price increases justify certain reasoning to some but that reasoning must be applied all the way around. The iPhone Xr is a COMPROMISE. You can own it with the same level of storage as my iPhone 7 for $800. However if I was fine with compromised iPhone I'd just.....keep my current iPhone which is exactly what I have done. My current iPhone doesn't have a telephoto camera. It doesn't have OLED, etc. The compromise becomes....keep the same phone.
Apple has been increasing prices for so long that people are forgetting the prior prices. They've just moved prior models down the chain but it's still an expensive chain.
When I bought my iPhone 7 it was the flagship iPhone and started at $650. I wanted more storage so I paid $750.
The same decision making process today costs $1150. Of course it is a better iPhone but when I bought my iPhone 7 it was the flagship iPhone as well. Like I said if I want a compromise phone, I already own it and it is paid for already.
Here's bit more reasoning about why I haven't upgraded....there's no option to deal with any sort of damage except for Applecare. I owned an iPhone 4s which had a glass back. If you broke that glass back you ordered a replacement (OEM or knock-off) and you removed two pentalobe screws and replaced it. You could do it or have a shop do it at a reasonable cost. If your rear glass is broken now.... $500+ for repair. Apple no longer offers a model of iPhone where I can forgo choices like wireless charging for durability or potentially lower cost repairs.
Finally Apple used to have a hardware/software synergy to help justify their higher prices. When the tent pole features for iOS12 are that they replaced all the bugs and inefficiencies of iOS 11 with something that works properly...that is problematic. When I want to deal with my Apple Watch and I have to go to three different apps .....Watch, Activity and Health apps to try to find the proper information that feels very.....Microsoft-ish. When iMovie, Garage Band, and the whole office suite hasn't been upgraded in ages.....problematic.
In the end it all adds up. I say this as someone who uses Pages on my Mac and iPad Mini 4 (which I can't give Apple more money to upgrade because they've decided they don't need to upgrade it so I've decided the same.) When I buy an iPad Pro... it will have some means of getting headphones attached. The current model doesn't even include a USB C to headphone adapter in the box. It isn't just that tired trope about someone loving wired headphones. Bluetooth has latency and when you use apps like Garage Band to make music, you need to hook to some sort of external speaker so when you play your music in via a controller keyboard, there is no latency.
So give us pro-level money and then give us more money so you can actually use apps without latency and to keep the same workflow you had before. Also the pro-level money is now at a higher price than before as well.
It all adds up and the gestures, software and other efforts that generated goodwill. They are gone....long gone.
Well, that was pretty clear. At least in part, pricing really IS an issue and I think a DED article today was implying China was performing well for Apple.
And yet nothing in Cook’s letter that specifically talks about price. The biggest blunder in the last couple years is the 23% increase in iPhone prices. Apple raised prices to offset declining unit growth and its come back to bite the company.
The longer term problem is not having something to takeover for the iPhone as the smartphone market matures. This is because no one can replace Jobs. Not only the lack of vision but also lighting a fire under Jony's butt and the recent quality problems and design inconsistencies show that Cook can't get the parts of the company to work together like Jobs did.
This press release specifically said all of the guidance shortfall is due to iPhone. There are no quality problems or design inconsistencies with iPhone.
100% flat out wrong. Face ID is almost flawless whereas touch ID depends on the weather, humidity, wetness, etc. all i know os i look at my phone and BOOM: its open and i can navigate 10 times faster without that dumb home button, Wake up: face ID is here to stay
😂. So my experience with my iPhones is 100% wrong. Get over yourself. You don't know everything and in this case you are 100% wrong as that's my experience as many others I know of as well. Never said it was going anywhere just commented on my experience.
Considering the only things they announced at the two keynotes all had price increases... the macs of which were both 5 years old on there previous models (sales had likely hit rock bottom on them).
Of course Tim Cook won’t admit it, but those making products actually attractive to buyers will increase sales.
Mercedes Benz doesnt’ make cars to compete with Hyundai and Apple doesn’t pursue the low end of their market. They are a premium brand.
Comments
https://daringfireball.net/2019/01/steve_jobs_and_apples_last_previous_earnings_warning
I think he is right that the letter was too long and was all over the place like let’s just throw things at the wall and see which one sticks. But I think the rest of his post focuses way too much on China, especially China & Trump. Apple didn’t revise down guidance because of Donald Trump. And this so-called trade war was well known/discussed when Apple put out guidance for Q1 on their Q4 earnings call. And when you’re revising revenue guidance down $5B to $7B the market is not really going to care that you’re generating the most profits in a segment with declining growth. But Gruber is right that Jobs was better at delivering bad news.
If Apple really is transitioning to a services company then they’ll have to move away from every product being a pricy piece of hardware. No one wants to pay $1000 for a phone and then have Apple say give us $10 for Apple Music, and $10 for Apple Video and $10 for Apple News etc.
I wish Apple would move to Apple as a service and offer something like the iPhone upgrade program for all their hardware products and allow people to bundle it with services. I priced out what I currently own + Apple Care + Apple Music and it would cost me about $150 a month. And that’s assuming a yearly iPhone and Apple Watch upgrade and an iPad upgrade every 2 years. I would totally do something like that. And maybe they could offer incentives if you bundle more things. Like if you subscribe to Apple Music + Apple Video + Apple News you get a discounted monthly price. Plus it would satisfy Wall Street’s love of recurring revenue streams.
The cost would be > than the net 120B Apple has in cash. The current market price is 116.72B ( as of Jan 3rd 12:45 GMT), a bidding war would push that higher. For that kind of money you can commission a lot of content.
I agree with that, and I think they should license tvOS if they could. They kind of have a licensing model in the US for iPhones.
I wouldn't discount accessories either. Apple is spending a lot of money on R&D for something.