“Three years ago, Apple was in a real bind, or so you would have thought. Steve Jobs, its mercurial founder, had died 18 months earlier, and pundits wondered if the company had lost its spark,” James Titcomb writes for The Telegraph. “Shares fell almost 40pc in the five months to January 2013, as sales growth slowed considerably, and Apple lost the title of world’s biggest company to oil giant ExxonMobil.”
“Apple is now once again close to being usurped as the world’s biggest company, this time by a rival it would be loath to lose the title to: Alphabet, Google’s parent company (which unveils fourth-quarter results on Monday),” Titcomb writes. “And people are asking once again if Apple is past its best… But before saying Apple is over the hill, it pays to know that we’ve been here before. The prophets of doom that heralded Apple’s downfall three years ago were proven wrong.”
“After a gloomy 2013, it rebounded the following year, launching well-received new phones that once again sent it on an upward path,” Titcomb writes. “While the fears are greater this time round – growth is slower and revenues will actually fall this quarter – they are not that different. And, as in 2013, another growth spurt could be just around the corner.”
Much more in the full article here.
MacDailyNews Take: Apple is in “trouble” because they’re considered to be dependent on iPhone and because just sold the most iPhones ever. Wall Street logic.
Yes, they have a tough iPhone unit compare this quarter. Yes, they will probably not beat last year’s Q2 iPhone unit sales. This too shall pass.
But to me, it does seem to be losing it’s touch — not in terms of profitability but in terms of its ability to delight. It’s been a while since I got that unmistakably-Apple thrill about a new product. I thought the Watch would do that, but after having one since launch day, it remains just a “meh”, horribly inconsistent and buggy experience. The “new” Apple TV was supposed to be something revolutionary, when it turned out to be just a very modest interface update to the old TV. Anyway, I know every new product can’t be game-changing, but it does seems like Apple has lost it’s touch…
Too true. Apple appears to be moving glacially and incrementally with current products hoping that something worthy from R&D can be quickly brought to market.
Demo of Apple Pencil last week rekindled my faith.
First time ever that a graphic device felt just right from the first moment.
Have to say the iPad Pro was pretty nice too.
Pretty much agree. And frankly, if Apple doesn’t do something to the OS Desktop…. like fixing iTunes and Photos, I’ll be off to another platform soon. Not much “Just Works” anymore….and you certainly can’t do now what could be done before.
Apple used to thrill because they invented things that we didn’t know we wanted until we had them. Now, the innovation bar is very high so things like 3D touch and Live Photos aren’t really very exciting. The iPhone needs to be water resistant (which apparently the 6S is without being advertised as so to avoid problems). The Apple Watch sales are not what the Street expected and frankly, its slow. But hey, its the first. Maybe the next will be better. But it does do some pretty incredible things, like show my boarding pass at the airport which has been really convenient. I have also used Keynote and Numbers on the Watch. AppleTV Siri is GREAT! Love it. Love how it says if it isn’t on iTunes I can find it on Netflix. That’s great. The games; not my thing. Looking for better TV apps to come. Swift is going to change things, I believe. so while next quarter may look disappointing, next year might be another blow-out because Android is losing its current high-income users that find it clunky, unreliable and too difficult to work with on unusual items. And we need the car.
The Apple Watch is great. Apple is really selling itself short by not pushing it harder, but maybe the 2nd version is close to release so they don’t want to hype the “beta” 1st gen too much.
My only gripes with the Watch, as with other products, is the software and services. The Remote App on my Watch rarely works, the camera viewfinder doesn’t work anymore, iCloud started not backing up until I upgraded to a paid plan, Airdrop is inconsistent etc.
Apple doesn’t need amazing new products every year, just give us the rock solid user experience. I was used to “it just works” with my first MacBook in 2009. The new MacBook Air I bought in 2013 was a lemon that wouldn’t even turn on. Perhaps just a fluke, but in my experience it was a sign of things to come.
Why do I smell unregistered TROLL here???
Since I’m kinda bullish on Apple right now, I do have a positive long-term view of the stock. I’m not sure what innovation is yet to come but here are some recent things that I liked and a few I’ll respond to from your post: Live Photos probably would not have drawn me to the iPhone 6S but once I got the phone (since I was on the AT&T Next installment plan), the features has really been an absolute delight – even more so because it includes sound. You mentioned water-resistance and I’m sure that would cycle quite a few, but the feature I’d love to see is wireless charging. If they brought that, I’d cycle my phone, watch and two iPads (mini and an Air) for one iPad Pro. The Apple Watch I’d still give 4 out of 5 stars simply because of the notifications feature. Everything else is just a big bonus. The Apple TV for me was just a big flop due to personal issues – I can’t see it on the white background. White blinds me – especially on a 55″ or 65″ tv so I returned mine. I have a friend with one and found two things: Siri search into Netflix just doesn’t work or is spotty. I don’t remember the details but it seems he was able to find one movie in Netflix using the feature but the only one he could select to play was the iTunes version. It’s just quirky. Now, to the positive, I’ve never been a gamer but he had Asphalt 8 (I think) installed and was using a wireless joystick and it was a downright slick experience – so much so that I thought he was playing an XBox game. Another negative equally important to me on the tv was the lack of a streaming package. I guess the rumors just got me but it was disappointing seeing my cable bill go from $195 to $220 per month as my contract ended in January and was perfectly timed for a “fruitful” change. By far, the tv was just the most disappointed I’ve ever been with Apple. But a Mac is by far the best computer on the market,the iPhone reigns supreme and the watch is the perfect sidekick to the phone. If all that is well, I don’t project doom for Apple just because I’m happier with my Apple TV 3rd gens. I like what I’m hearing about them putting features in the off season releases rather than stuffing everything in the main iOS release with new hardware. I’m still waiting for the high-quality releases though. I came to Apple because I was SICK of Microsoft’s cartoon interface and floppy releases that caused more issues than the features added in pleasure. My iPhone 6S sound volume just inexplicably cut in half and the quality is like low quality music. But even that brings up something that many people discount about Apple. When you have a problem with something under warranty, that company is UNPARALLELED in resolving the problem or replacing the hardware if that’s the issue.
Makes a change for a Telegraph journalist to write a semi-sensible article without the usual ‘Apple is doomed’ rhetoric.
I’d rather be dependent on the iPhone and have a raft of other highly profitable and large revenue streams than be reliant on advertising offering comparatively small margins backed up only by a load of pie in the sky money draining pieces of garbage like Google. I can’t see Google magically making more money on advertising or suddenly making any of their other projects massively profitable.
So true. Google is always talking about, and funding, “moonshots”. None have become overwhelmingly profitable ventures in their own right. As we now know thanks to court filings, Android, their most successful by far, has only made a modest profit.
On the other hand, Apple regularly (a couple of times each decade, or more), spins up an entirely new product the size of a Fortune 500 company.
Google is a blue chip company. The Yellow Pages. Good returns, and predictable growth. If their continuous yapping about inventing something new ever turns into something the higher valuation will be justified. We’ve just been given no evidence they can do it. (Nesting your one profitable company under an umbrella with 25 other ‘slots’ is not proof of a viable strategy to duplicate the model.) Until we see them do it, Google is just a profitable Amazon. A good company that only justifies a well-grounded valuation.
It doesn’t matter what brings in the growth, it simply matters that the growth occurs. Google announced 18% revenue growth, but Apple announced 1%.
If you take off the labels and you have no moral scruples and, like Wall Street, the only thing you care about is where to get the biggest return on your next dollar of investment, where do you think you would put your money?
Yep, sadly, it’s not going to be AAPL.
So if Apple wants to turn the ship around, Apple needs more new customers and more new products to attract those customers. The several years that Cook underinvested in new product development has caught up with him, as I have long predicted.
Cook would be best advised to use his cash horde to build new products instead of paying his VPs hundreds of millions of dollars to deliver near-zero growth by milking Steve Jobs’ app store and company reputation, something a chimpanzee can do as well as they have been.
Mike, it seems obvious to my that you do not know business.
That may be the situation now, but AAPL has been as unfairly viewed even as it was starting it’s big surges in growth and long before this supposed peak. Google has never been driven down despite it’s results not showing the growth levels Apple was achieving. AAPL has been manipulated during good and not so good times. The logic of how people have viewed the potential of these various companies has not been remotely consistent.
Wall Street laments not maintaining blockbuster releases every year.
Think about that for a moment. What company can or has done that?
Carefully thought out & then improved products over time seem to make for better long term company value.
The absence of Steve Jobs is definitely being felt.
1. Innovation — Tim Cook’s biggest innovation so far is the Apple Watch. In my opinion it is a flop. Why? The watch is an answer looking for a question. Not very intuitive. Much technology cobbled together without a clear purpose.
2. Wall Street — Cook & Co. spent too much money and time trying to impress Wall Street with share buy backs and dividends and not enough on innovation and their core market such as education.
Yes, Apple has peaked. It reminds me of RIM/Blackberry in the first couple of years after the announcement of the iPhone. Blackberry announced fantastic sales growth the first couple of years. Absent a miracle, Apple is on a downward trajectory.
1-AppleWatch is a success for any company but not for a company the size and success level as Apple
2-Agreed – Apple should be using its cash to buy growth companies instead of giving it to hedge funds
3-Apple services – all of them fail to impress – they simply do not have the executive with the experience and understanding to manage services. Can you put your fingers on any service that any investor considers a success? iTunes is not a service, it is a product. The parts that are a service suck royally.
1 – Apple Watch, by itself, is a Fortune 500 company sized enterprise, with over $3.5 billion in revenue in the last quarter attributable to just the Apple Watch alone. You can figure it from the massive increase in revenue in the Other Revenue category and working backwards to get the numbers of Apple Watch sales after discounting for Apple TV4 sales.
2- Apple should not be just buying growth companies unless they fit with Apple’s ecosystem. Otherwise, that is growth for growth’s sake and is pointless.
3- It matters NOT what the investors considers a success, especially when you re-define “investors” as “traders.” Apple is not in the business of pleasing “investors” or even “traders.” Let me provide an analogy: The traders and investors are essentially merely trading a “product” that Apple once sold many years ago: its equity stock. Once it is out on the market, Apple has no control of what is done with it and what this product is sold for. What THEY pay for the product called “AAPL stock share” is of about as much interest to Apple as what someone pays for an old Macintosh computer, except that Apple, the company from time to time, has to provide a dividend payment to a holder of that product. That “dividend” is more akin to a product with a lifetime warranty with a repeated breakdown every quarter. . . and expense that drains Apple’s coffers. Think of Apple buying the product (the stock) back—the equivalent of buying back the defective computer and junking it—as a means of forever removing the expense of repairing it (the Dividend) every quarter, stopping the bleeding of funds from the coffers. Apple is no longer selling that product (they don’t need to sell any more stock to raise money), so it’s current price is of little consequence to the company.
What iTunes does is a service. The music the customer buys, whether streaming or individual purchased tracks are products. Many people would beg to differ with you about the level of “suckage,” otherwise, why would millions of people subscribe to Apple Music? Rent movies from iTunes, buy music through iTunes, or use it to manage their music libraries? For those millions it doesn’t suck. Perhaps you use it on an operating system that sucks, say Windows?
By the way, MShahsavar, it’s been estimated that the Apple Watch will, when annualized, be a $21 BILLION revenue product. Using Apple’s stated 40% company wide margin, that would translate to an operating profit of $8.4 BILLION. THAT by any measure is a successful product for even a business of the size of Apple!
Wall Street and the anal-ists constantly predict Apple’s doom.
Record quarter after record quarter they have a doom excuse for everything. Doesn’t matter they took in the most profits of any company in the world for 1 quarter. They always have an excuse of doom somewhere to be made up and lower Apple’s stock price. Google could fall flat on its face and they would raise there stock price $60 a share in one day with never a mention about there imminent failure is around the corner.