“Apple’s reported plans to cut iPhone production by 10 percent in the first quarter of 2019 make increasingly clear that the company’s base of loyal users isn’t an inexhaustible resource from whom it can forever extract a rent through its services offerings,” Leonid Bershidsky writes for Bloomberg. “Apple needs to compete more vigorously in all the other markets in which it’s present, without relying on the network effects of its large installed base.”
“In the medium to long term, the decline can only undermine Apple’s ability to feed off the ‘halo effect’ from its installed base, estimated at about 1 billion iPhones globally at the end of last year. In the company’s other markets, its products and services will increasingly compete on their own merits, with less help from the network effects that push iPhone users toward everything else Apple,” Bershidsky writes. “The company inevitably will need to face up to the fact that, as things stand, few Apple products are strongly competitive among the non-iPhone users.”
“Weaning itself from iPhone dependence will be a painful experience for Apple, not only because the stock market will punish it for being overoptimistic for too long, but also because the importance of each market in which the company is involved will increase. The iPhone’s enormous shadow won’t hide errors as well as it did in the past,” Bershidsky writes. “And competing hard against specialized players with a lot of skin in the game will become more of a necessity. The new situation requires a sharper focus from people in each of Apple’s lines of business and more multitasking from Cook, whether or not he’s willing to see things this way.”
Read more in the full article here.
MacDailyNews Take: We’ve been warning of an unfocused Apple for many years now.
Hopefully having several hundred billion dollars lopped off the company’s market value within a couple of months will sharpen some minds in Cupertino.
If he retired today, Tim Cook’s Apple would be known for coasting along on Steve Jobs’ innovations, rolling up tremendous profits that any halfway competent CEO would have accrued (or more), and devolving into being lazy, sloppy and routinely late. That’s a great legacy, Tim. — MacDailyNews, April 10, 2018
SEE ALSO:
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’s newest Mac Pro turns five years old today – December 19, 2018
Apple’s 2013 Mac Pro, five years later – May 31, 2018
3 things to expect from Apple’s 2019 Mac Pro – April 11, 2018
Why can’t Apple keep their products up-to-date? – April 10, 2018
Why is it taking Apple so long to update the Mac Pro? – April 10, 2018
Apple’s latest announcements about the modular Mac Pro really ramp up expectations – April 6, 2018
Apple needs to stop promising new products and start delivering them – April 6, 2018
Apple: No new Mac Pro until 2019 – April 5, 2018
Apple reiterates they’re working on an all-new modular, upgradeable Mac Pro and a high-end pro display – December 14, 2017
The culture at Apple changed when Tim Cook took over as CEO – April 10, 2017
Why Apple’s promise of a new ‘modular’ Mac Pro matters so much – April 6, 2017
Apple’s cheese grater Mac Pro was flexible, expandable, and powerful – imagine that – April 6, 2017
More about Apple’s Mac Pro – April 6, 2017
Apple’s desperate Mac Pro damage control message hints at a confused, divided company – April 6, 2017
Who has taken over at Apple? – April 5, 2017
Apple’s embarrassing Mac Pro mea culpa – April 4, 2017
Who’s going to buy a Mac Pro now? – April 4, 2017
Mac Pro: Why did it take Apple so long to wake up? – April 4, 2017
Apple sorry for what happened with the Mac Pro over the last 3+ years – namely, nothing – April 4, 2017
Apple to unveil ‘iMac Pro’ later this year; rethought, modular Mac Pro and Apple pro displays in the pipeline – April 4, 2017
Apple’s apparent antipathy towards the Mac prompts calls for macOS licensing – March 27, 2017
Why Apple’s new Mac Pro might never arrive – March 10, 2017
Dare we hold out hope for the Mac Pro? – March 1, 2017
Apple CEO Cook pledges support to pro users, says ‘we don’t like politics’ at Apple’s annual shareholders meeting – February 28, 2017
Yes, I just bought a ‘new’ Mac Pro (released on December 19, 2013 and never updated) – January 4, 2017
Attention, Tim Cook! Apple isn’t firing on all cylinders and you need to fix it – January 4, 2017
No, Apple, do not simplify, get better – December 23, 2016
Rare video shows Steve Jobs warning Apple to focus less on profits and more on great products – December 23, 2016
Marco Arment: Apple’s Mac Pro is ‘very likely dead’ – December 20, 2016
How Tim Cook’s Apple alienated Mac loyalists – December 20, 2016
Apple’s not very good, really quite poor 2016 – December 19, 2016
Apple’s software has been anything but ‘magical’ lately – December 19, 2016
Lazy Apple. It’s not hard to imagine Steve Jobs asking, ‘What have you been doing for the last four years?’ – December 9, 2016
AirPods: MIA for the holidays; delayed product damages Apple’s credibility, stokes customer frustration – December 9, 2016
Apple may have finally gotten too big for its unusual corporate structure – November 28, 2016
Apple has no idea what they’re doing in the TV space, and it’s embarrassing – November 3, 2016
Apple’s disgracefully outdated, utterly mismanaged Mac lineup is killing sales – October 13, 2016
Apple takes its eye off the ball: Why users are complaining about Apple’s software – February 9, 2016
Open letter to Tim Cook: Apple needs to do better – January 5, 2015
this down turn should be pretty hard to ignore – but it wasn’t that hard to imagine, let alone predict.
it has been evident for some time to a great many apple aficionados that the current leadership has not been minding the store, or thinking very far ahead.
and where has the board of directors been all this time ? with the foolishness of such ha heavy dependence upon i phones, allowing its mac line to stagnate – and not even be advertised?
seems to have been an over emphasis upon style rather than substance. and a foolish dependence upon increasingly expensive products powered by the mantra of premium products at premium prices for premium customers.
newsflash: one hell of a lot of us either cannot or are unwilling to afford or spend nearly a thousand dollars on a damn phone – no matter how may millions of times more powerful it is than the computers that put appollo 11 on the moon.
one can only hope that this financial kick in the hinder will travel up some several inert spines and register in the frontal lobes that it is time to take a serious look at operational dogma and see where it falls short and remedy the situation.
otherwise apples fate may well be a slow protracted death by hubris.
Apple’s post iPhone future is relying on proceeds from a Steve Jobs museum in Palo Alto.
They waited too long and Cook has destroyed Apple.
Three months ago, the rhetoric was quite different. There were people actually talking about iPhone supercycles (massive iPhone sales). Just one financial quarter changed everything about how Apple is fairing. Apple was the first trillion-dollar company, so there must have been some people who thought Apple was being run properly. I think all this current talk of doom and gloom about Apple is quite excessive. A company valued at more than $700B and flush with cash isn’t exactly a bankruptcy candidate.
Another likely scenario was the boost in investor confidence Warren Buffet’s investment in AAPL created. Short lived as it was.
AAPL: From stock to laughingstock.
Bershidsky – like most Bloomberg contributors – trashes AAPL as clickbait. The article is clueless in so many ways. He laments decline in units sold in one region, without noticing that the installed base of Apple users has increased by 100 million in the past twelve months. There are now 1.4 million users in Apple’s “installed base.” He is repeating the advice that Apple should sell more units lest they lose market share to cheapo Android competitors, a group that, though much larger, fights over a small fraction of the total profits in the smartphone business. Apple has NEVER played that game, and should not start now.
He recommends that Apple increase interoperability with competitor products. Where has he been? iTunes to be included to built in options in top-tier TV manufacturers next year. Airplay 2 is widely built into audio products now. Apple Music is available on Android.
This clickbait piece was either written long ago — hence Bershidsky’s failure to notice the interoperability improvements — or Beshidsky is too clueless to know about them. I’d bet lots on the latter. Bershidsky is a polemicist who knows little about most things he writes about, which never seems to stop him from opining boldly.
He — and MDN in its daily Cook slam – overlook the wearables story. Apple Watch Series 4 is still demand constrained, meaning they can’t make enough of them due to its cutting edge nature. It – along with AirPods – have each sold 3 to 4 times as much as iPod did when one adjusts for the date it was introduced. It’s early days for wearables. And the very day that AW becomes available that will measure blood pressure or glucose in real time, is the day Apple Watch becomes a must-have item for the over 50 crowd. Health insurers will eventually insist upon it (and likely subsidize it with premium reduction). With its unique combination of privacy safeguards, customer trust, and control over hardware and software — Apple is miles ahead of the competition in the wearables healthcare space. Virtually all of that has taken place under Cook’s stewardship.
To write a hit piece on AAPL without mentioning wearables tells you all you need to know about Bershidsky’s competence to write about the company.
DT, I have been lamenting for some time now Apples seemingly in ability to drive multiple products and services to great results. iPhone, iPod, and watch have been really good, but HomePod, Siri, airport, Mac Pro, Mac mini and iCloud have all languished. I admire amazon for what they have accomplished across a broad spectrum of business and products. Apple has to up its game a lot and expect excellent products in each category where it needs to play.
I think Apple could benefit from a reorganization to one focused on product with accountability for results.
Apple Net Income in 2007 was 3.3 billion, in 2018 was 59.5 billion. Of course MDN and the other Tim Cook haters could have done much better, because they are so much smarter.
Correction: That’s 1.4 billion in the installed base. Not million.
Hopefully there is no such thing as a post iPhone future.
Just as there should never be a “post Mac” future or a “post iPad” future.
This is part of the problem with Apple’s current leadership. They’re focused 99% on a single product line even if that product is only 60% of their current sales base. They are too focused on the current top sellers when their focus should be diverse and making sure all current products are properly evolving as well as tracking future products (even if only one or two out of 10 early development projects make it to the real product stage).
Bottom Line: if anyone at the VP level or above cannot adequately multi-task then they need to be replaced ASAP.
The Mac are still the best machines ever created, has the greatest operating system ever developed and runs efficiently even on aging machines. Your exaggerated claims make you sound spoiled and whiney.