In the past couple of months, Apple CEO Tim Cook did two things that make Apple look guilty today:
The first is the decision to stop reporting iPhone unit sales numbers on the very quarter when Apple had a massive iPhone unit sales miss resulting in having to issue a startling earning warning.
This makes Apple look guilty of trying to hide dropping iPhone unit sales. (Before the warning, the concern was “stagnation,” today it’s about meaningful, impactful drops in sales.) The confluence of events, stopping reporting and missing guidance by billions, makes people question Apple’s stated intention of getting people to focus on other, more important things like recurring services revenue. It looks a heckuva lot more like they’re trying to hide bad iPhone sales performance from analysts and investors.
The second is that Cook stated in his letter to investors and in a CNBC interview that other factors negatively impacting Apple’s iPhone sales performance included “some customers taking advantage of significantly reduced pricing for iPhone battery replacements.”
This makes Apple look guilty of trying to hide the fact that a relatively inexpensive battery replacement would make an iPhone feel pretty much new again with the intention of selling relatively expensive new iPhones instead. You’ll remember that in 2017, Apple was accused of secretly throttling performance on iPhones with aged batteries (i.e. “Batterygate”). Apple claimed they did this to prolong the life of older iPhones, but it left many to assume that their iPhone’s processor and/or RAM couldn’t keep up with new, more demanding versions of iOS. After Cook’s letter and interview, it’s likely that more people today think that Apple deliberately obfuscated this battery replacement issue in order to encourage new iPhone sales.
It would have been better and smarter for Apple to stop reporting iPhone unit sales when they had a clear idea of a looming iPhone unit sales beat next quarter or at least one that wouldn’t adversely impact earning to the point of having to issue a shocking warning. It most certainly would have been better and smarter for Cook to not blame inexpensive battery replacements (the reason for which was Apple’s lack of transparency to begin with) or even mention battery replacements in his list of excuses in print or spoken on TV.
I’m not saying Apple is guilty of either of these things (trying to hide poor iPhone unit sales and deliberately slowing down iPhones with old batteries in order to sell new iPhones), just that they look a lot more guilty today than they did before Cook’s warning letter and TV interview.
SteveJack is a long-time Macintosh user, web designer, multimedia producer and, when he awakes from Rip Van Winkle-esque slumbers, a contributor to the MacDailyNews Opinion section.
SEE ALSO:
CEO Cook issues memo to employees after Apple slashes revenue outlook for the first time in almost two decades – January 3, 2019
Apple’s earnings warning means CEO Tim Cook now has a major credibility problem – January 3, 2019
Loup Ventures: We continue to expect AAPL to outperform the rest of FAANG in 2019 – January 3, 2019
Open thread: Does Apple need new leadership? – January 2, 2019
CEO Tim Cook on why Apple lowered first-quarter revenue forecasts – January 2, 2019
Apple CEO Tim Cook issues public letter to investors, lowers guidance – January 2, 2019
The most annoying things about Apple’s iPhone ‘batterygate’ apology – December 29, 2017
What? Customers taking ADVANTAGE of Apple and their battery problems? Give me a break.
Did he Actually SAY that?
No. Read it again:
“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.” – Cook’s letter to Apple investors, 1/2/2019
Tim Cook did say SOME so he is including people that are using the battery replacement program.
I’ve been telling the poeple of MDM since 2012 that Apple needed to get rid of Tim Cook, when he killed the 30-pin connector industry, in order to set up his multi-billion-dollar, buy back dongle industry. He takes ports away, then charges us to “buy back” the fuctionality he stole… at a steep premium of course. The rest is history. This greedy reprobate has now effectively destroyed Apple, some 7-years later.
Have you lost your mind? Who misses the 30 pin connector? That thing was hideous. I was glad to see it go and YES I had a iHome speaker in my bathroom and a Sony one in my bedroom that used it as wall as about 15 cables and chargers. Lightning is far better. Bet you still hate Whirlpool because the guys don’t deliver Ice to your house anymore for your “ice box”. Cook is not perfect but looks like he’s done a better job than you, I or almost anyone else could do. He’ll learn from these mis-steps.
yup, a new battery in my 6s plus caused me to delay purchasing a new iPhone from fall of 2018 to AT LEAST the fall of 2019.
yup, I’d LOVE a new XS but it’s real hard to justify the price.
🙂
Similarly, a new battery in my 6s meant that I have a two year reprieve from having to change my headsets over from the 3.5mm jack, since all of the later iPhone models don’t have a headphone jack.
(why should I pay $1K for a product with fewer features that I care about?)
And to be told they are leading in so doing, to boot!
Amen…
The mistake was not clarifying battery technology in relation to use… had that been mentioned up front, there would have not been an uproar and litigation in claiming Apple was purposely causing battery drain to sell more iPhones, when in reality the opposite was true…
people might have still went with a $79 battery change vs a $1000 (or trade in priced $549-749) iPhone.
What Tim Cook is guilty of is makin Apple too reliant upon the iDevice product lines then pricing them out of the reach of people.
I’ve seen my own extended family members either stop upgrading iPhones or switch to Android phones. None of them are poor but all of them are in Apple’s target demographic.
There’s a malaise at Apple and it’s down to Pipeline’s lack of vision. The product line is as boring as one of his keynotes.
Tim’s Apple, as usual, is trying to blame other factors instead of their own shortcomings. It makes them really petty.
They are emphasizing a China issue hence Trump together but they have been struggling to deal with the Chinese market quite some time, not just this quarter.
Battery? They used to replace the battery (mind you, only for certain models) at $79 but after the planned obsolescence issue, they immediately reduce the cost down to $29. Then, they announced that $29 will be good only until the end of this year, and people rushed whether they really needed a new battery or not. I did. I replace the battery for the 8 which is still under the warranty. Did it really influence their unit sales in this quarter? I don’t think so, People who rushed to replace batteries in the last minutes in the year-end have already decided that they will wait out until at least next year anyway. So, Tim says things very carelessly, shooting his own foot and opening the wound even wider.
It’s the price, stupid!
Apple has been struggling in the Chinese market for quite some time. Yes, it is probably one of the price-sensitive markets, but Apple is also trying to pass the buck to Trump. The fact of the matter is, in China, really tough and formidable competitors have been raising their stake and Apple could not compete. Certainly, it did not suddenly happen in this quarter.
Making too obvious excuses is interpreted as Apple insulting the intelligence of consumers. Come up with more believable, logical and professional excuses rather than usual first-aid, patch-up and impromptu style ones.
Investment sector/community is obviously not believing Apple, which is reflected in the stock market so clearly.
Apple is going down and taking shareholders with them. Apple needs to find some new revenue solutions to replace the iPhone. It’s not too late to acquire a cloud business that doesn’t rely on China.
Have a full loaded IPhone X from last year that performs just as well now as then so tell me again why should I upgrade again?
I did upgrade my Apple Watch from a first gen to this new 4th gen and that was a satisfying upgrade. Waiting 6 years though now to upgrade to a Mac Pro I want to buy…
From technology leader to a maker of gimmicks, child labor and people at Foxconn committing suicide, Mr. Cook is the worst of the lying, cheating, murderous insiders of what this world is being run by, a kakistocracy of psychopaths with no remorse and empty words.
He has destroyed Apple’s presence in computing, adding to the Stone Ghost tracking system of complete and total surveillance society where he and his cronies hope to become rulers of “lesser people”.
I worked at Motorola and watched it implode from within from politics and pushing the concept of “best” (ie uncompetitive) practices by incompetent leadership which eliminated the workforce that actually cared about the company and it’s product, particularly semiconductors and the foundation of networking products.
Apple OS X is the reincarnation of NeXT STEP as it’s APIs show so the OS is now 31 years old. The Newton which is the basis of it’s mobile products was a better product than those that replaced it, the tablets in particular.
Cook and his staff need a replacement that can bring it back to being a class leader in safe, inventive technology.
Gulty?.. 🤦♂️give me break… trolls are out spewing senseless garbage..
Few day of opportunity to talk BS again ……
So yojimbo007, did you buy any Apple stock today since the price is just temporarily hammered down?
If you think the stock is underpriced there is a sale on Apple stock. However, if you think Apple is overpriced- like I do- it has a way to go. I stopped buying shares long ago on the way up before the 7-1 split. In the low-mid 300s/share I stopped buying.
The difference between the Apple I bought shares in then and the company now is that instead of sitting on a cash pile with no debt, they are sitting on a mountain of debt in a declining market with no answer as to how to replace it. Apple Music and iCloud are not going to offset a saturated market of cell phones.
Glad I didn’t buy at the top. When the recession fully hits, Apple will be cheaper than today. My guess it should be no more than the 110-120 range at best.
Buy low- sell high.
Welcome back Steve Jack! Nice to read your take.
Apple really needs to up their game in three areas.
Keeping Products up to date (Mac Mini, Mac Pro) for example.
Software quality: Apple really needs dedicated internal test team.
Pricing
For Apple to charge premium prices, products must be up to date, software must be free of glitches, design quirks and crashes.
Every good author needs a good editor. This is what Apple is missing an editor. Steve Jobs was their editor. Apple now needs a dedicated team of product testers tasked with making certain that every function works and that the software is easy to use and logical. Apple lately seems to mess up on a lot of small details. Premium products, get the details right.
This year after reviewing the iPhones I decided to upgrade the battery in my iPhone 7+. The difference in functionality is not worth $1,000 to me. Sure I could afford it, but the new features were not worth $1,000 to me. I am not wild about the notch nor am I enthused about an all glass phone. Too easy to break.
Up to this point, I have owned every new iPad released except one. This year will be my second time not to purchase a new iPad. Why? The new iPad’s are just simply overpriced. After reviewing the new features I decided to keep my existing 2nd gen iPad Pro 12.9.
Apple is not doing themselves a favor by overpricing Macs. People have price points they are willing to pay up to. Most are not willing to pay $1,000 more for a Mac. Costco over Christmas was selling Dell XPS 15’s with an i7 processor, 32gb ram, and a 1tb ssd along with a four year warranty for $1,900. Apple wants over $3,400 for a similar configuration. If I wasn’t a really dedicated Mac user I would have purchased the Dell. This is overpricing is limiting sales, which hurts Apple software developers and users.
If Apple is serious about improving services revenue they need to become more competitive on their device prices. I know a lot of people who used to buy a new Mac every four years. Not now, they are still using their 2009 with an SSD upgrade.
Apple needs to remember – Device sales drive service sales.
Again, nice to see Steve Jack in action.
Yup as I mentioned last week echoes the point made here as to why didn’t Apple stop reporting numbers when it didn’t matter. One presumes it’s because they liked to boast about increasing numbers when it suited them or just didn’t consider the issues involved sufficiently early enough to make the change from a position of strength. It makes them look reactive rather than proactive by nature, u like Jobs Apple. Either way it just makes Cook look incompetent or duplicitous … Or both. If he isn’t believable or appears competent, I really don’t see him as appearing to be safe hands any more. He has had issues to put right for years now but instead of getting a grip on those he now seems to be losing grip altogether. In a hostile analyst world for Apple and Cook himself, it really isn’t clear how he will turn perceptions round, or worse still, stop the real issues clearly developing now, due to internal complacency and deteriorating world affairs out of their control getting far worse.
It scares me what happens this year after this, if after much of the opposition launch notch-less phones as they will Apple later has only what seems moderately upgraded notched phones to launch. Imagine the slating they will get even if they posess less visible improvements. The door has consistently been slammed in the face of analysts negativity, this time Cook and co have left the door off the latch and sporting a giant welcome sign.
When SteveJack serves up a blog I get misty eyed.
Ok, so SteveJack could you please just give the full run-down of what Apple needs at this moment? If you just chime in on this reporting-gate or whatever thing, we won’t hear from you again until Apple is too far gone. We need your wisdom now.
Hey, by the way friends…I replaced two family phone batteries for $29 as well as received a replacement keyboard for my MacBook (Keyboard-Gate?!) — which by the way, those non-techies like myself—gave me a brand new laptop battery when they replace the top case for the new keyboard. A would-be $500-repair…free.
*for those non-techies