Apple's Problems have Nothing to do with the Economy!
Last Thursday the US financial markets were sent into a painful sell-off due to Apple’s announcement of missing expected first quarter 2019 revenue. Apple forecast a revenue figure of $84 billion in expected sales for the first quarter versus $88 to $92 billion expected by Wall Street. Furthermore in November CEO Tim Cook announced that Apple would no longer be releasing individual unit figures for total iPhones sold by Apple, which should have raised alarms.
This action by CEO Cook was especially scary for Wall Street veterans who see the lack of unit transparency as a precursor to the end of a positive business cycle for Apple. Simply speaking when a company is doing well it wants to brag about its performance and metrics, however when a company wants to become less transparent and more vague about their business, this causes deep worry among investors.
Apple’s CEO Tim Cook blamed the economy, trade wars and a slowing China. However when was the last time Apple announced a new product that was very exciting to consumers? The Apple Watch failed to make a dent or move the financial needle, accounting for less than 2% of last quarter’s sales. The iPhone X, which many people traded in their iPhone 7’s for, has caused a lot of buyers remorse among the Apple community. For a significantly higher cost than the Apple 7 the Apple X tends to be more frustrating to use and offers no new improvements and function or usage.
At a fraction of the cost, Samsung is offering phones that are essentially complete copies of the iPhone! Unlike a car where you can save a lot, but the difference between a Ford and a Mercedes is notable, the difference between an iPhone and a Samsung phone has narrowed substantially in both performance and luxury.
Why will John Q consumer continue to pay up for an iPhone? Most consumers will seek out the most efficient use of their dollar. Apple might be able to continue to offer barely improved products to the wealthier classes of the world who want to keep up appearances, but even they will lose their patience and simply stick it out with their older models.
Apple’s CEO Tim Cook blamed the economy as a major factor in the reduction of estimated sales. However, Nike has seen no weakness in the economy, the December jobs report was one of the best in a long time and this only further shakes investor confidence in Tim Cook as a leader and a manager.
What has Tim Cook done since the passing of Steve Jobs? What new products has Tim Cook brought to market as CEO? Apple has been acquiring a substantial amount of very new tech firms, start ups and expensively-glitzy real estate, but has very little to show for it in regards to its products for the everyday consumer.
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Written & Edited by the Rebellion Team
Sources: Apple's Quarterly Filings