Cook promises Apple will 'learn' and 'take action' in memo to workers
Following up on the sudden news that December-quarter earnings will be lower than predicted by between $5 billion and $9 billion, Apple CEO Tim Cook promised future changes in a memo to employees.
"External forces may push us around a bit, but we are not going to use them as an excuse," Cook wrote in the memo, obtained by AppleInsider from a source not authorized to speak on behalf of the company. "Nor will we just wait around until they get better. This moment gives us an opportunity to learn and to take action, to focus on our strengths and on Apple's mission -- delivering the best products on earth for our customers and providing them with an unmatched level of service. We manage Apple for the long term, and in challenging times we have always come out stronger."
The memo otherwise reiterated many of the claims in his bombshell letter from Wednesday, blaming weaker-than-expected iPhone sales on "macroeconomic" conditions, as well as problems "specifc to Apple and the smartphone industry."
In the letter Cook specifically highlighted China, noting that the entirety of Apple's revenue shortfall can be traced to the country. He also however blamed factors like a strong U.S. dollar, fewer carrier subsidies, and even people taking advantage of discounted battery replacements, which some saw as an admission that the company depends on degraded batteries to spur upgrades.
Confirmed in the memo are plans for an "all-hands" meeting on Thursday, set to take place at 9:30 a.m. Pacific time. Because of construction work at Apple Park, the meeting is being held in the Town Hall at 1 Infinite Loop.
"I'll have more details about the quarter, and I'm looking forward to your thoughts and questions," Cook concluded.
Some have seen the new guidance -- revised from between $89 billion and $93 billion to just $84 billion -- as evidence that Apple has finally pushed iPhone prices too high, starting the XR at $749 and the XS at $999. That's a hard sell in markets like China, where brands like Huawei and Oppo are now offering mid-range and high-end phones for hundreds less.
"External forces may push us around a bit, but we are not going to use them as an excuse," Cook wrote in the memo, obtained by AppleInsider from a source not authorized to speak on behalf of the company. "Nor will we just wait around until they get better. This moment gives us an opportunity to learn and to take action, to focus on our strengths and on Apple's mission -- delivering the best products on earth for our customers and providing them with an unmatched level of service. We manage Apple for the long term, and in challenging times we have always come out stronger."
The memo otherwise reiterated many of the claims in his bombshell letter from Wednesday, blaming weaker-than-expected iPhone sales on "macroeconomic" conditions, as well as problems "specifc to Apple and the smartphone industry."
In the letter Cook specifically highlighted China, noting that the entirety of Apple's revenue shortfall can be traced to the country. He also however blamed factors like a strong U.S. dollar, fewer carrier subsidies, and even people taking advantage of discounted battery replacements, which some saw as an admission that the company depends on degraded batteries to spur upgrades.
Confirmed in the memo are plans for an "all-hands" meeting on Thursday, set to take place at 9:30 a.m. Pacific time. Because of construction work at Apple Park, the meeting is being held in the Town Hall at 1 Infinite Loop.
"I'll have more details about the quarter, and I'm looking forward to your thoughts and questions," Cook concluded.
Some have seen the new guidance -- revised from between $89 billion and $93 billion to just $84 billion -- as evidence that Apple has finally pushed iPhone prices too high, starting the XR at $749 and the XS at $999. That's a hard sell in markets like China, where brands like Huawei and Oppo are now offering mid-range and high-end phones for hundreds less.
Comments
Apple's other products don't offer any compelling upgrades to the older models I already have. I despise the new MacBook Pro and have zero interest in the trashcan 2013 Mac Pro.
hopefully that’s a lesson Tim learns. Let Angela run the stores, let the professionals run the business.
Ah nevermind, that price is with a trade in.
But Ya, the High prices is not helping on the phones. Really overall, the high prices on ALL of their hardware, Most of which is at least over a year old. The only thing currently you can count on to even be updated yearly is the iPhone and the Apple Watch. The iPads are hit and miss. As for Mac's, look at that 2013 Mac Pro. 5 years old now and still wanting a premium price. Who is foolish enough to buy it at this point?
Apple is just so focused on MONEY and how to make maximum profits on everything. But you reach a point where people have had enough of that. I do wish there was a real 3rd option.
With that said, Apple had to see this coming, the whole battery replacement impacting new sales and the fact consumers are hanging on to phones longer and longer.
As it was said, most of the phone in my house is now on the 4 yr upgrade cycle with at least one battery replacement in the middle. Even if Apple did not have any sort of battery issue, you can only charge and discharge a battery so many times, add any amount of heat to this process and the battery will fall off at some point. The who trade war which had been talk about since the beginning of the summer and Apple did not think this would not have some level of impact on their business, if that was the case it was short sighted on their part. They had to know all this back in the fall and they still put forward higher estimates.
If I really liked my iPhone 7, and it lasted me a couple years because of software improvements, is that a bad thing? It certainly reduces the money Apple makes, but I'm pretty happy that Apple is adding value even as the market matures.
On the other hand, I bought an iPhone XS for a lot more money. It's objectively better in every way, but if I'm being honest, I don't like it better. Why not? The better camera, the better screen, and the faster processor aren't enough better that I notice in day to day life, mostly because the iPhone 7 was already very nice. And there are downsides. It's heavier and bulkier, and some apps (especially games) aren't really made for the screen, even now.
Maybe this is the problem. What's good for Apple the company no longer seems to be good for many of its customers. They want to sell more expensive devices, but people aren't really getting the value out of them.