tjwolf

cmka~+ said:

Interesting analysis. 

From a consumer point of view I think when apple has been at its best, it has brought a class of product with a level of functionality, reliability, fit, and finish, that couldn't be gotten elsewhere at any price. The original iPods and early iPhones were clear examples of this. When they came out they were an order of magnitude more expensive than alternative products, and orders of magnitude better (think $50 CD player or fully subsidized flip phone). 

...

But the fit-and-finish (or joy-spark) premium has its limits.

While I still prefer apple designs, competitors are closing the fit and finish gap, and while the processors in the current iPhones are quite arguably the best in class, the value added proposition of feature set in the high end models doesn't set apple apart in the way that it used to....

The value proposition Apple makes isn't just its design, fit-and-finish, or even processor speed.  It is, increasingly, the integration between devices.  There is no other competitor who has the breadth of widgets - from TV streamer to speaker to watch to smartphone to headphone to laptop to desktop....to music & video services - all integrated seamlessly, out of the box.  And people, increasingly, notice & value this convenience.

gatorguy said:

80s_Apple_Guy said:

How can Apple be forced to pay for an invalid patent?

Samsung had to pay Apple for a patent that was eventually declared invalid IIRC. The law is not what you might expect. If a company is found guilty of infringement and later on, a month, a year, 10 years later, that patent is ruled invalid the "infringing" company doesn't get their money back. 

Not automatically, but I imagine they could sue for it back, no?  That would certainly jibe with other lawyer-friendly aspect of the American justice system.  Keeping lawyers in business is what it's ultimately all about.

lenn said:

China has been taking advantage of the US markets for many decades restricting/charging huge tariffs for products made in the US and past US Presidents and Congress have done NOTHING to change this. President Trump has said enough of this! In order to bring about a level playing field between China and US trade there is going to be some suffering. But this is the only way to force communist China to change it's way. Apple will survive. They might have to lower their sky high margins and lower the outrageous prices on their iPhones but in the end an even playing field between the US and China will only help America and it's workers.

Let's remember that Apple and so many other countries moved all their manufacturing to China years ago to get away from US EPA and labor regulations here in the US. Apple talks a big game but they like China because of it's cheap labor and little to no environmental regulations not to mention all the labor lawsuits they would face here in the US.

Let's also remember that the whole point of a company is to maximize profits.  Which includes manufacturing at the lowest possible price.  It is the *responsibility of the government* to balance company's success with looking out for its citizens when company behaviors would harm its citizens economically.  Time and again, Republican-led presidents and congress abdicated that responsibility by not creating regulations that would inhibit outsourcing or actively removing regulations that would have.

I don't buy the assertion that China did the US great harm for decades by restricting trade or charging huge tariffs.  Do you have any evidence that China's overall tariffs are any bigger than the US's?  The largest tariffs/restrictions I'm aware of were on automobiles - but "decades" ago, most Chinese couldn't afford a car anyway, so how much damage did those high tariffs actually do?

China also takes US companies' IP.  But to me it's not even clear if that it is "theft" as described by the administration.  Isn't it more of a devil's bargain?  When the Chinese government tells an American company that, in order to sell its cars in China, it has to "partner" with a Chinese firm, the US company knows what it's getting into - how can you not share IP when you setup shop in a foreign country?  The company can say 'no'.  By saying 'yes', it's agreeing to give up some of its IP in return for access to a market.

I'm against this tariff war - but I do agree that some Chinese behaviors are unfair (e.g. the aforementioned requirement for partnering) and create a tilted playing field.  The right place for this all to be addressed would be the WTO.  Unfortunately, it was created without "fangs" - it doesn't have the wherewithal to punish those countries that don't follow agreed-to rules - and it was created with some countries having a larger say than others, ensuring built-in unfairness.

tylersdad said:

That was then, this is now.

Back then, nearly every new generation of phone brought with it exciting features. That's not really the case now. New phones pretty much get you a faster version of the old phone you're currently using. For all but the hardcore enthusiast, this just isn't enough to spend $1200 every two years on a new phone. 

I'm not saying Apple won't survive. They obviously will. But I really doubt that they will reach the sales heights they once did unless they truly begin to innovate again or price their products more reasonably. Faster just isn't good enough anymore. And adding features that 99.9% of us don't need isn't helping. 

The innovation has moved from the iPhone itself to the pieces that integrate with it: the watch, the headphones, and soon the glasses.  The 'faster version' itself is not what's going to drive future sales of iPhones - it's that the faster speed of the iPhone will allow for better experiences with the wearables (e.g. faster CPU/GPU, better AR experience with your future AR glasses).

anantksundaram said:

Clearly something happened within the last month or so that Apple execs didn’t see coming.

This to me is the MOST concerning thing. It suggests to me that it’s not trade (old news, if anything tariffs have been delayed), it’s not the government or Huawei (Chinese competitors have been gaining share for a year now), it’s not the dollar (which is no worse than what it has been in the past six months), it’s not the slowing of the Chinese economy (this is also old news). 

IMHO, it could well be the product and the price. Especially the XR, starting at $750 (for a laughable 64GB). Frankly, when it was introduced, my reaction was “meh, some candy-colored overpriced crap”. Apple did something similar before (5s? 6s?) and those colored phones did not do well, IIRC. And, while I did buy the Xs Max, I can’t say it does anything different or better than the X that I bought last year. Interestingly, two people in my family have no interest upgrading from their iPhone 8, and one had to be bribed to switch to my X (so that I could get the Xs Max). 

I think the XR — I have not seen one in the wild yet! — could well be history in the next product iteration. And Apple had better get on the 5G game asap, or the next product cycle could be tough too. 

The trade tariffs may be "old news", but the effect it - along with the recently intensified witch hunt of Huawei - has had on the Chinese is not.  I submit that the Chinese consumer has turned much more against American products than folks, including executives at AAPL, thought.  The average AAPL Chinese consumer thinks the US initiated trade war and pursuit of Huawei is completely unjustified and is doing his/her bit to fight back against the "American aggressor".  How?  By buying Chinese (e.g. Huawei) and shunning American products.

Apple is "collateral damage" in Trump's ill-conceived trade war that only his simple mind thinks is "easy to win".

I don't think it's product and price at all.  If that were the case, how do you explain the record or near record sales in other regions?  IMHO, you're letting your personal opinion of Apple's products cloud overall judgement.  BTW, the "colored" phone that didn't do well was the 5c.  If you bought an Xs Max this year and an X last year, you're clearly in the minority (of people with too much money and too little sense).  And, at the very least, if you're being disingenuous by saying it does nothing different/better: it has a friggin' bigger screen!  That's *different*.

Finally, according to AAPL, the Xr was Apple's best-selling phone this xmas quarter.  That alone invalidates your opinion that its destiny will be similar to the 5c.