Apple’s biggest problem? My mom

“When Apple lost more than $75 billion in market value this past week after a surprise announcement that it is expecting lower iPhone sales than originally projected, the company put most of the blame for its troubles on China, where a slowing economy and the trade war with the United States have hurt sales,” Kevin Roose writes for The New York Times. “But a bigger issue for Apple might exist much closer to home, in a small, leafy town in Ohio.”

“That’s where my mom lives. She’s a relatively tech-savvy retiree and a longtime Apple fan who has used many of the company’s products over the years. I learned to type on an Apple IIGS at her office, and she was an early adopter of the original turquoise iMac,” Roose writes. “Her phone isn’t the latest model — it’s a three-year-old iPhone 6S — and it’s missing some of the latest features… But she’s happy with it, and doesn’t feel the need to upgrade.”

Apple's 4.7-inch iPhone 6s and 5.5-inch iPhone 6s Plus debuted on September 25, 2015
Apple’s 4.7-inch iPhone 6s and 5.5-inch iPhone 6s Plus debuted on September 25, 2015

 
“But for my mom, and the many people who are probably in her situation, the company’s slowing iPhone sales aren’t at all a disaster. In fact, they make total sense, and they don’t have much to do with China,” Roose writes. “The most consequential hit to Apple’s bottom line may be from people who are holding on to their phones for longer.”

Read more in the full article here.

MacDailyNews Take: Yes, the iPhone replacement cycle is lengthening, but with so many iPhone (and iPad) users and with customer satisfaction so high, it really doesn’t matter. The market is mature and there are only so many quality users on the planet. Apple has that market cornered. The types of people who’ve settled for Android aren’t likely to buy as many apps or subscribe to services. They want free. They’re not worth much after the sale. The iPhone knockoff peddlers like Samsung can have them.

This is, of course, Apple’s point with ceasing the reporting of unit sales. It’s the user base, the quality of the user base, and services that matter more now. That’s where the growth is and where it will be for many, many years to come.

30 Comments

  1. I feel the same way as this person’s mom, though I write code for a living. I spend most of my time in front of my Mac, and probably do 90% of my texting, email, and web browsing on it. I can even answer my phone on my Mac. I use my phone mostly for phone calls, music (my iPod now lives in my car), and the occasional photo. I have an iPhone 7, and I’m perfectly happy with it now and for the foreseeable future. The only reason I would update my phone is if some radical new feature came out, and I needed it to test apps on. For me, having a big screen and a fast computer are far more important than some new phone features I probably won’t use.

    1. My wife and I upgraded from our iPhone 4 models to the 6 and 6 Plus and since they work like new we see no need to upgrade. With our iMac, MacBook Pro and iPad there is simply no logical reason to spend the money.

  2. I have an iPhone X and for the first time in many a moon I haven’t been tempted to upgrade it even though I’m on a plan that allows it easily. Doubtful I will until the 5G iPhone appears. The iPhones of the last couple of years are good enough, fast enough and gosh darn it people still like them.

  3. Assuming 90-day quarters, Apple’s Q117 quarter was $981 million a day, and despite the tariff war between the US and China and the maturing phone market, the Q119 quarter is projected to be $933 million a day. That’s an estimated decline in revenue of 4.9 percent.

    And projections are that Apple’s Q119 quarter will generate the largest dollar profit figure in the company’s history, even with the lower revenue figure.

    How does this support all “the sky is falling” BS regarding AAPL? Yes, the market looks to the future, but it’s focusing solely on the iPhone and ignoring the spectacular growth in services and other aspects of the company’s business model.

    1. Apple and MDN can keep ignoring the Android customers to their peril, as if all of them have no interest in apps or wont buy anything off of their phone, thats ridiculous, They are good customers that Apple needs.

  4. The tech industry is ignoring all of seniors, now on low fixed incomes, who were the first to use computers in everyday careers and our lives. I started with a 1K Mac as a technical illustrator and graphic artist using software like MacDraw, MacPaint, then MacDraft, until Illustrator 88 launched. When I went to another company in ’89, they were using Lisa’s! We can’t afford the new versions of products. And myself, former colleagues I’m in touch with, and friends who also happened to graphic artist simply can’t afford a monthly fee for using graphics software we paid thousands of dollars for over our careers to keep up to date in the industry. I live in Silly Cons Valley, 4th generation SF Bay Arean, and I’m being pushed out of where I live and totally ignored by the tech world. A huge majority of us baby boomers aren’t wealthy, we’re barely hanging on financially. So yea, I’m happy with my iPhone 6, my 2009 MacPro and the last version of Adobe Software I paid approx $500 to use.

    1. Not just the tech industry, all industries are focusing more on those that have disposable income because none of this stuff is NEEDED (unless your job requires you to be on the latest and greatest).

      I know folks still using the first iPhone because it does what they need. It would be senseless for Apple to try to sell to this person.

    2. Insightful post, Cherri N. Yes, us aging baby boomers are certainly in the same boat in all ways you mentioned. Loyal to Apple from the very beginning and other software companies like Adobe. Our loyal patronage is not recognized or rewarded as we age. Local restaurants and grocery stores offer Senior discounts everyday. In fact, tech has gone in the opposite direction of charging more while delivering less (dongle tax, minus headphone jack, etc.), forcing monthly subscription fees after we paid thousands for decades to OWN the software. It’s all about GREED NOW. Fixed incomes, they could not care less. In with the new and out with the old.

      The article is highly recommended and required reading for everyone, including the high-priced bean counters inside Apple. One minor error is the iPhone 6 Mom uses is older than three years. Bottom line: Mom speaks for millions exactly what is going on in all aspects of the Apple slowdown.

      BTW, good to hear we both used all the same graphics programs you mentioned in the 1980s. The only difference is I chose Freehand over .ai88…

  5. This issue is “good enough.” PC’s with power and feature set hit this quite a long time ago. If you don’t need a write-on display, a laptop has the power and performance to meet 95% of what people do 95% of the time.

    Smartphones, specifically iPhone, accelerated this invention much faster than the PC, and thus “good enough” for 95% of the users 95% of the time happened around iPhone 6S/iPhone 7…

    Face ID replies Touch ID, and while it provides for a larger display with less bezel, Touch ID is proving – for many – to be “good enough” as are the speeds and display sizes, shape and weight of iPhone (say iPhone 7 or so).

    The high-end market is also matured and has little room for expansion. Much like carriers, it’s about stealing others share, but that is a slow slog.

    Until the “tablet” of the smartphone market hits changing the game, little is going to change, no matter the incremental, even if efficient, additions come to iPhone, because most iPhones people have now are “good enough” for what they do.

    Replacement units due to battery life drain, small/slight frame damage, etc… or just feeling “out of date” with enough new features piled up over time to make an upgrade worth while.

    AKA – the car market.

  6. I upgraded from the iPhone 6 to a X and probably won’t upgrade again for another 4 or 5 years (unless my phone breaks). I’m using a 2012 retina MBP 15″ in which I’ve replaced the screen twice, the batteries twice and upgraded the hard disk to 1 TB. This computer is still going strong (still plenty fast for the things I need to do). I see NO reason to upgrade to the latest MBPs which will require me to buy dongles for my home, dongles for my office and dongles for the plane when my current MBP has all the ports I need already built-in (not to mention the $3K price tag for an equivalent machine).

    I use an old (2009) iMac 27″ as an external monitor for my rMBP. AFAIK, the new iMacs can’t do this and I don’t know if this iMac can be used in this way with the latest MBPs (I will ask if and/or when the time comes). But I’m going on “if it ain’t broke, why fix it?” philosophy…

    P.S.- I’m still on Sierra b/c I don’t want to the new file system. Plus, every time I upgrade (albeit for free) to a new OS, I have to upgrade a number of the apps I use (which are decidedly NOT free). It’s just too expensive to upgrade and I don’t miss the new features…

    As an investor in AAPL, that’s troubling. As a user, it’s great. Sometimes it’s hard to hold the dichotomy.

  7. It’s hard to justify an upgrade at $1000 plus. My next upgrade is a number of years away as Pipleline hasn’t put any must have features in the new phones.

    He just jacked up the prices.

  8. 6s?!? This is being typed on a 6 Plus. I also do not see any reason to “upgrade” to a device lacking a head phone jack.

    So yes, if it ain’t broke why fix it? Not everyone likes Apple’s newer designs, features, or the LACK thereof. Butterfly keyboards, lack of ports, etc. Everyone reading this knows the list.

    I LOVE my user upgraded 2012 Mac Mini -16 gGB and a 2 TB SSD. Apple, for once in a long time did a fairly good job with the 2018 Mac Mini model. Given my new job out of state, new house we purchased and other things, I need to save for a new 2018 / 2019? Mac Mini with a decent capacity, built in Flash storage drive.

    1. But that’s OK.

      I think that even Tim Cook acknowledged in an interview that Apple does not expect anybody to own all of their products and spend all day in front of them.

      I’ve also got a 2012 i7 Mini and I currently just don’t need anything faster.
      I did need a phone faster than the 4S (battery died too soon) and so an Xr is coming next week.

      There’s no point in devoting all your disposable income to Apple.

      I do believe they make the best products you can buy these days – but that does not mean I’m throwing money after them.

      1. Apples marketing is a disaster. They are making poor decisions regarding pricing, and are way over priced and underlivering in the growth areas like home automation. Smart phones are peaking, and I’m fearful that Apple’s way behind google and amazon in the growth markets. Apple needs to speed up the transformation into a services company and better seed the market with more reasonably priced hardware to lock in the service revenues.

        1. “Apples marketing is a disaster.”

          Gawd, yeh!!! Such a disaster! They must be making — what — maybe a few million a year. They clearly need to replace all of senior management with you.

  9. I had an iPhone 6s going on 3 years and was perfectly fine until it started dying last month. I upgraded to an iPhone XR but would’ve been perfectly fine with my 6s for at least another year or two. Up until my iPhone 6s I upgraded every two years but feel I don’t need to do that anymore.

  10. Yea but his mom is a ho. 😀 Could not resist the cheap joke.

    More seriously, the mom article comes to EXACTLY the wrong conclusion.

    Apple announced that average hold time of a phone is now 3 years. BUT DESPITE THIS, they had RECORD YoY growth in every geographic region (except collapsed economy China).

    So this is great news, because despite moms and others not upgrading their phones often, they still have record sales. That is ALREADY BAKED IN.

    The conclusion is precisely wrong. It’s not a problem/bug, it’s a good/feature. The market recognizes you get a quality phone that will last a long time, they partake in that phone, and reward Apple as a manufacture of that with record sales.

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