Apple Had Five Ways to Fuel Earnings. Only One Still Works(bloomberg.com)
bloomberg.com
Apple Had Five Ways to Fuel Earnings. Only One Still Works
https://www.bloomberg.com/opinion/articles/2019-01-03/questions-on-apple-aapl-earnings-strategies-after-outlook-cut
152 comments
I suspect Apple is working through a long-term secret plan to phase out all MacOS products and replace them with upgraded iPad Pro devices instead. With some increased hardware resources and iOS enhancements, iPads could eventually meet the needs of most knowledge workers and content creators. Until that plan comes to fruition I suspect Apple will put minimal effort into their existing line of laptops and desktops.
A vocal minority of power users and developers will hate being forced onto iOS, but most customers will be satisfied. And Apple will be able to consolidate their engineering work behind a single platform.
A vocal minority of power users and developers will hate being forced onto iOS, but most customers will be satisfied. And Apple will be able to consolidate their engineering work behind a single platform.
What's happening is that it's been too long since they introduced something that was not an incremental upgrade.
I don't agree that's a sufficient explanation. The current line of MacBook pros marked a big departure in design. The problem was a lot of the design changes were of questionable merit.
This. It's hard to explain but it's the same with the keynote events. They used to be exciting to particular class of nerd such as me. Now they seem to be more about the celebrities in the audience and the cheesy looking people in the product videos.
I assumed that they were just switching to a more popular and lucrative demographic based of who buys iPhones.
The current Apple makes more money now but the products and the way they are marketed are boring IMHO (subjective I know).
I assumed that they were just switching to a more popular and lucrative demographic based of who buys iPhones.
The current Apple makes more money now but the products and the way they are marketed are boring IMHO (subjective I know).
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I own the very same 12" iBook G4 from 2004, and it ran Mac OS X 10.3 Panther. It was a beauty.
But the market has shifted dramatically since 2004. Outside of software devs and people who need laptops for work/school, the number of people who own a personal laptop has significantly decreased since. (can google stats if needed) Plus there's a whole demographic of people who have never owned a laptop and don't see the need.
I'm a techie and I haven't owned a personal laptop since 2007. I travel with my iPhone and iPad Air 2, and they're more than good enough for my needs. I have Linux desktops at home/work. Even if Apple made a really innovative laptop computer today, its target market is a lot smaller than it was in 2004.
But the market has shifted dramatically since 2004. Outside of software devs and people who need laptops for work/school, the number of people who own a personal laptop has significantly decreased since. (can google stats if needed) Plus there's a whole demographic of people who have never owned a laptop and don't see the need.
I'm a techie and I haven't owned a personal laptop since 2007. I travel with my iPhone and iPad Air 2, and they're more than good enough for my needs. I have Linux desktops at home/work. Even if Apple made a really innovative laptop computer today, its target market is a lot smaller than it was in 2004.
It would help if the MBP were actually a professional level device instead of being a souped-up, hyper-expensive consumer laptop.
That would mean more ports, a higher minimum spec, and the ability to upgrade the internals. The touchbar could be dropped entirely, it’s really just a marketing gimmick.
That would mean more ports, a higher minimum spec, and the ability to upgrade the internals. The touchbar could be dropped entirely, it’s really just a marketing gimmick.
The lack of touchbar (retaining the touchID login) is one of the reasons I'm digging the latest MB Air. The ports issue... I'm not sure if Apple will ever resolve that.
How's the screen? I've heard it's less bright than the MBP.
I mean you could compare the figures for the nits but, as an example, I feel like my retinas are burning off at 100% brightness.
And MagSafe. Please bring back MagSafe.
I agree it should be an option, but I do really like being able to use one connector to satisfy all my charging, keyboarding, mousing, videoing, sounding, and other peripheraling needs.
A MagSafe-like magnetic connector that spoke USB 3.1 or whatever Type C uses would be perfection and would make me seriously consider buying a modern Mac.
A MagSafe-like magnetic connector that spoke USB 3.1 or whatever Type C uses would be perfection and would make me seriously consider buying a modern Mac.
I find it odd that being a big in a large market that isn't growing (like the mobile phone market) is seen as a problem. Why does the company need to grow if it's profitable as it is?
I think what apple will find is that the market won't stand for their high-priced iPhones forever. If they have any sense, they'll notice this and put their prices down again.
I think what apple will find is that the market won't stand for their high-priced iPhones forever. If they have any sense, they'll notice this and put their prices down again.
Because for shareholders, the stock price only appreciates if the company grows.
In many ways, it mirrors the issues for Hacker News entrepreneurs. To get VC capital, you have to dangle promises high returns on your equity — even if a consistent cashflow business is a great outcome for an entrepreneur (these businesses are pejoratively called "lifestyle businesses").
In many ways, it mirrors the issues for Hacker News entrepreneurs. To get VC capital, you have to dangle promises high returns on your equity — even if a consistent cashflow business is a great outcome for an entrepreneur (these businesses are pejoratively called "lifestyle businesses").
Which is why dividends exist. Mature companies may grow less, but they produce profit, which can be distributed to shareholders in the form of dividends.
Dividends are not some magic; they are taken out of the share price. There's not really a difference between reinvested dividends vs. no dividends at all. And non-reinvested dividends are less optimal as you'll pay taxes on them, so you actually have less net worth from collecting and not reinvesting dividends vs. either reinvesting them, or investing in a company which doesn't yield a dividend.
It's a fallacy that many people fall for though. See Berkshire Hathaway for the prime example.
It's a fallacy that many people fall for though. See Berkshire Hathaway for the prime example.
But that would require me to own the stock for months or years rather than milliseconds
And this is why I oppose the current system of shareholders having control of companies.
What exactly do you oppose? Founders are the original shareholders, so I guess you don't oppose them having control of their own company? Since they are in control, nobody forces them to raise investment and give away shares in exchange for money. In other words, it's their decision whether to introduce new shareholders (either private or public ones).
I guess I oppose the system where we give control of companies to people who put capital into the company. As opposed to the people who run the company, or rank and file employees.
I've started two nearly automated lifestyle businesses specifically in areas where this exists. They are extremely low overhead and time cost and generally low revenue.
Any decent vc funded company could blow my product out of the water but they won't bother
Any decent vc funded company could blow my product out of the water but they won't bother
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It's only a problem if you're a public company and have shareholders. If you're private, it's not really a serious problem if you have a large enough buffer to support current operations. I think Bloomberg is in the latter category. Revenues from selling their terminal have declined every year for awhile, but since they're private, they're not panicking as much.
There are public companies that operate this way as well, like utilities. There is no reason a tech company couldn’t as well, but the stock price would need to drop to reflect minimal growth. No more 20x multiples.
Because when you do not largely innovate, it doesn't matter if you are in a large market or not it signals grave danger. Apple knew this years ago when they started their large services push (i.e. collecting rent). Apple has a good challenge in front of them for the next 5 years, they have enough cash in the bank to ride it out and try some moonshots, but there will be some big changes/chances in the next 5 years, and I'd be willing to bet that Cook will leave as CEO by 2024.
I think this is a common misconception based on both the way innovation is perceived and the role it played in years past vs. the current state of the technology market.
1. Apple does innovate. Every year. But doesn't tend to follow fads or new technologies for the sake of newness and those tend to be confused with innovation all the time.
2. As markets saturate and the smartphone becomes an everyday object, the behavior starts to resemble the fashion and accessories industry where brand image, and customer loyalty plays a larger role in purchase decisions. If Louis Vuitton sales 10% less bags YoY in China, nobody thinks it's because they have not innovated enough in handbag technology.
Apple is ok. At least as of now. They are still selling 84 billion $ worth of products on a given quarter.
1. Apple does innovate. Every year. But doesn't tend to follow fads or new technologies for the sake of newness and those tend to be confused with innovation all the time.
2. As markets saturate and the smartphone becomes an everyday object, the behavior starts to resemble the fashion and accessories industry where brand image, and customer loyalty plays a larger role in purchase decisions. If Louis Vuitton sales 10% less bags YoY in China, nobody thinks it's because they have not innovated enough in handbag technology.
Apple is ok. At least as of now. They are still selling 84 billion $ worth of products on a given quarter.
Investers could also ask for all that cash to be issued to them.
See altababa / Yahoo for example
See altababa / Yahoo for example
That won't happen. Apple is still wildly successful, just not as successful as in the past. Yahoo was a dumpster fire for years, and thus people wanted the cash before Yahoo burned it.
> Apple has a good challenge in front of them for the next 5 years, they have enough cash in the bank to ride it out and try some moonshots, but there will be some big changes/chances in the next 5 years, and I'd be willing to bet that Cook will leave as CEO by 2024.
I don't believe apple's shareholders would let them burn a singificant amount of their cash reserves for R&D over next 5 years...unless investors truley believe said R&D has solid ROI.
I don't believe apple's shareholders would let them burn a singificant amount of their cash reserves for R&D over next 5 years...unless investors truley believe said R&D has solid ROI.
It has been issued steadily for the last couple of years in the shape of buybacks and dividends. Will probably keep happening going forward.
It's current valuation is based on an assumption that the revenues will continue to grow significantly.
If it turns out that in reality the revenues will be stable/stagnant, then the owners of Apple are in for a rude shock (since it'd mean that Apple is worth much, much less), would not consider this situation as acceptable, and would be ready to install new management and approve radical changes to try and continue growth (of both revenues and share value) by any means possible.
If it turns out that in reality the revenues will be stable/stagnant, then the owners of Apple are in for a rude shock (since it'd mean that Apple is worth much, much less), would not consider this situation as acceptable, and would be ready to install new management and approve radical changes to try and continue growth (of both revenues and share value) by any means possible.
> It's current valuation is based on an assumption that the revenues will continue to grow significantly.
Is it? It has a P/E of ~10, the same as IBM ('big and steady')
Is it? It has a P/E of ~10, the same as IBM ('big and steady')
> [the shareholders] would not consider this situation as acceptable, and would be ready to install new management and approve radical changes to try and continue growth (of both revenues and share value) by any means possible.
IMHO, that's not "creative destruction," it's more "we had to destroy the village in order to save it." "By any means possible" will inevitably turn into short-term, customer-hostile actions that will erode the value provided by the company to society.
Narrow focus on financial metrics by shareholders sometimes seems to be more of a destroyer of real value than a creator of it.
IMHO, that's not "creative destruction," it's more "we had to destroy the village in order to save it." "By any means possible" will inevitably turn into short-term, customer-hostile actions that will erode the value provided by the company to society.
Narrow focus on financial metrics by shareholders sometimes seems to be more of a destroyer of real value than a creator of it.
I agree, that has always bugged me as well. Growth is not the end goal, it's the desired temporary state for a company to make profits.
Here's a serious question: what should the valuation be for a company that is not growing, but generating $X amount of profit year after year, with no risk, forever (and assuming the profit keeps up with inflation).
Logically, companies are valued on their expected future profits. Since you want those to be as big as possible, growth in general is good. But at some point, in rare cases, a company may get so big that it has reached the point where it's just extremely profitable. Wasn't that supposed to be the end-goal?
Here's a serious question: what should the valuation be for a company that is not growing, but generating $X amount of profit year after year, with no risk, forever (and assuming the profit keeps up with inflation).
Logically, companies are valued on their expected future profits. Since you want those to be as big as possible, growth in general is good. But at some point, in rare cases, a company may get so big that it has reached the point where it's just extremely profitable. Wasn't that supposed to be the end-goal?
Valuing a future revenue stream (called the “net present value”) is simple using something called the “discounted cash flow model”.
The main variables are the annual cash flow amount and a “discount rate” which is the interest rate you would earn at equivalent risk.
Each year’s cash flow is divided by (1 + i)^n where I is the interest rate, and n is the number of years out.
For example, 10 years of future annual recurring revenue of $100mm per year, at a discount rate of 5%, has a net present value of $772mm.
That 10th year’s $100mm is only worth $61.4mm in present value based on the 5% interest rate. It is the same thing as saying: $61.4mm invested at 5% would turn into $100mm in 10 years.
If Apple’s net profit turned into a steady $50b stream from here on out, at a 5% discount rate, it comes to a NPV of $673b over the next 20 years. Their current market cap is $680b by the way.
The main variables are the annual cash flow amount and a “discount rate” which is the interest rate you would earn at equivalent risk.
Each year’s cash flow is divided by (1 + i)^n where I is the interest rate, and n is the number of years out.
For example, 10 years of future annual recurring revenue of $100mm per year, at a discount rate of 5%, has a net present value of $772mm.
That 10th year’s $100mm is only worth $61.4mm in present value based on the 5% interest rate. It is the same thing as saying: $61.4mm invested at 5% would turn into $100mm in 10 years.
If Apple’s net profit turned into a steady $50b stream from here on out, at a 5% discount rate, it comes to a NPV of $673b over the next 20 years. Their current market cap is $680b by the way.
I think what complicates it is that the shares themselves are a tradable commodity. The price of a commodity isn't just a function of the underlying value of the asset, but also expected change in price, the overall health of the economy, the attitude of other investors, etc. Many short to medium term investors may not care directly about profits at all, because they hope to make their money from growth in the price of the share as a commodity.
> Many short to medium term investors may not care directly about profits at all, because they hope to make their money from growth in the price of the share as a commodity.
Indeed, which breaks down the entire market rationale of capitalism right. It seems that we ought to put minimum hold times on shares. There shouldn't be any medium and certainly no short-term shareholders.
Indeed, which breaks down the entire market rationale of capitalism right. It seems that we ought to put minimum hold times on shares. There shouldn't be any medium and certainly no short-term shareholders.
There are minimum hold times, otherwise 2 things happen: short term capital gains(high taxes), and the SEC flags you as PDC(high liquid capital requirements, compared to non-PDC).
Right, but how long are they?
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Reducing prices almost certainly means reducing profit. Which means now they're in a market that is delivering shrinking revenues and profits.
>I find it odd that being a big in a large market that isn't growing (like the mobile phone market) is seen as a problem. Why does the company need to grow if it's profitable as it is?
It's anything but odd. That's the basis of how the stock market works. If Stock XYZ is big in a large, not-growing market, and trades at $50 per share... why would the stock price ever appreciate?
It's anything but odd. That's the basis of how the stock market works. If Stock XYZ is big in a large, not-growing market, and trades at $50 per share... why would the stock price ever appreciate?
why would the stock price ever appreciate?
Reinvested dividend money; see a sibling comment somewhere in here that addresses this. If the company doesn't pay a dividend, that money has to go somewhere, so it gets accounted for in the stock price (a vast oversimplification, yes).
Reinvested dividend money; see a sibling comment somewhere in here that addresses this. If the company doesn't pay a dividend, that money has to go somewhere, so it gets accounted for in the stock price (a vast oversimplification, yes).
That was likely my own comment; and it was comparing a company that didn't pay dividends to the exact same company which does pay dividends. In this scenario with equivalent cash flows, expenditures, and expectations of future growth the non-dividend company will have a higher share price.
Share price _increases_ however only occur when the market expects the company to _grow_ revenues (profits), not sustain them. In other words, your comment isn't accurate, that would not cause the share price to increase. Only actual growth, expectation of growth, or market manipulation will cause share prices to increase.
Share price _increases_ however only occur when the market expects the company to _grow_ revenues (profits), not sustain them. In other words, your comment isn't accurate, that would not cause the share price to increase. Only actual growth, expectation of growth, or market manipulation will cause share prices to increase.
As several people have pointed out, the stock market investors care. But putting that aside, a company can be profitable with a stock price of $0 (though not likely). So at first glance it would seem that just staying profitable is enough to get by, and technically it is. But the problem is staying profitable. If a company has been growing rapidly, then the growth slows, then the growth stops, that's a big indicator that they'll start shrinking. Of course there is a non-zero probability that they will stay profitable for quite some time, but the odds are against them.
A publicly traded company needs to either grow or pay an attractive dividend. Otherwise investors will put their money into companies which can provide those things.
> Why does the company need to grow if it's profitable as it is?
The word "profitable" covers wide range of possible outcomes.
The word "profitable" covers wide range of possible outcomes.
it's not "seen as a problem," the company just gets valued differently if growth is expected to slow
> Why does the company need to grow if it's profitable as it is?
This is how capitalism works. Everything has to be growing all the time, or it's seen as failing. Requiring infinite growth on a finite planet is a problem, but so far all the alternatives are considered fringe: https://en.wikipedia.org/wiki/Steady-state_economy
This is how capitalism works. Everything has to be growing all the time, or it's seen as failing. Requiring infinite growth on a finite planet is a problem, but so far all the alternatives are considered fringe: https://en.wikipedia.org/wiki/Steady-state_economy
Isn't the main problem the same one that beset PC manufacturers as the computers got fast enough that no one needed to upgrade anymore? Couple that with Apple making phones that cost >$1000 and it seems like the natural end this was headed to. My iPhone SE does every single thing I need a phone to do and it costed about $99.
I’ve had similar thoughts. I currently have an iPhone 6S, I’ve had it for 30 months, and don’t really have a need to change it. I remember when I started changing laptops only when they broke, and it’s a similar feeling
I've had my 6S Plus now for 36 months and definitely don't need a change, though I do like the screens on the newer iPhones.
One interesting thing about the my phone is I managed to crack the screen on the 3 iPhones I had before, sometimes multiple times. I've put this one through hell and back and it just keeps going. I wonder if the build quality (not just features and performance) has been a factor in slowing upgrades...
One interesting thing about the my phone is I managed to crack the screen on the 3 iPhones I had before, sometimes multiple times. I've put this one through hell and back and it just keeps going. I wonder if the build quality (not just features and performance) has been a factor in slowing upgrades...
Apple can't make them much faster because they keep making them thinner and lighter.
Each MacBook has been a very slight upgrade from the previous model since they went Retina. Often times the first of a new generation is actually slower than the one it replaced.
Plus, Apple won't work with NVIDIA so their GPU is always going to be behind when compared with the PC market.
It's not just nvidia, a modern gpu needs a lot of power to run properly and it doesn't work with apple's idea that their laptop can't have noise/heat/be large/need a large powerbox. Even if they went nvidia they would go for what, a 1050 Ti or 1060 at best ? Compared to a "regular brand" laptop at half price it's ridiculously weak.
Personally I "solved" it for my need by having two laptops (I don't have a desktop at home anymore), one is a 15" made for mobility with tons of battery and low weight, the other is frankly more of a "transportable" 17", too heavy to hold it in one hand and lasting less that two hour on battery but with insane power for all my work and gaming need.
Interestingly enough both end up costing almost the same.
Personally I "solved" it for my need by having two laptops (I don't have a desktop at home anymore), one is a 15" made for mobility with tons of battery and low weight, the other is frankly more of a "transportable" 17", too heavy to hold it in one hand and lasting less that two hour on battery but with insane power for all my work and gaming need.
Interestingly enough both end up costing almost the same.
In Apple's glory years and resulting growth, their os and hardware were the epicenter of your personal computing. today thin client laptops and smartphones connect online, which is now your personal computing epicenter. It's hard to see how Apple can innovate new devices and OS's to achieve massive growth again in the era of cheap chromebooks
I'd say that his point is more that Apple refuses to work with nVidia for various reasons. AMD's chips run far hotter than nVidia ones, so this further limits their options considering the thermal constraints of their devices.
I think Apple's situation is a bit different from most PC manufacturers: because they aim for "quality/brand/recognition" they can get a crowd that is fine with replacing their computer more often even if they don't need to. "the new thingy that does mostly the same as before but new" won't work on someone who buys the $600 HP laptop. It does still work on phones, but the improvement are a lot more massive both hardware (camera especially) and software. That's why apple NEEDS to go with touchbar and new connectors magic and everything because why else would you change, already on HN you see plenty of people saying they're fine with their 4+ years old mbp.
If you rely on a "premium product at premium price" you need to make people want to have it, and for them to replace it that's either obseleting the old one, or making the new one
Downside of this of course, is that it's harder to rely on that anymore when you try to grab mass market too.
If you rely on a "premium product at premium price" you need to make people want to have it, and for them to replace it that's either obseleting the old one, or making the new one
Downside of this of course, is that it's harder to rely on that anymore when you try to grab mass market too.
The problem I see is that as the iPhone became big they shifted focus towards it instead of trying to focus on everything they already have. But I could be wrong, and maybe someone else might have more insight. I want Apple to succeed, same with Microsoft. They are imho necessary companies, otherwise we're stuck with whatever Google, Facebook or Amazon feed us.
The mobile phone market was already becoming the largest electronics market in the world before Apple entered it. It made perfect sense to focus on that.
Eleven years later, there is still not a single electronic item that is larger than the smart phone market.
PC's aren't making a comeback, TV's are low margin and bulky, etc.
Eleven years later, there is still not a single electronic item that is larger than the smart phone market.
PC's aren't making a comeback, TV's are low margin and bulky, etc.
You still need proper machines to develop for those phones though, and since Apple requires Macs for it, they really should of never neglected their computer market. I am pretty damn sure if they hadn't we'd have seen a lot more Macs all throughout. Now we're seeing plenty of dedicated Mac users jump ship to Linux or even Windows 10.
I think you misunderstood the parent comments point. “PCs aren’t making a comeback” doesn’t mean they disappear entirely. It means that they’ve now been relegated to niche use cases, like the ones you point out.
Not only have mobile phones cannibalized the “a PC on every desk” for people at home, they’ve expanded to “a computer in every pocket”.
Not only have mobile phones cannibalized the “a PC on every desk” for people at home, they’ve expanded to “a computer in every pocket”.
Dedicated iOS developers are by definition, not abandoning Macs and “Creatives” are not flocking to Linux.
Even if other developers are leaving Mac (and the numbers don’t support that) and if Apple could have grown Mac sales by (an unrealistic) 50%, it still wouldn’t have made a noticeable change in their profitability.
Even if other developers are leaving Mac (and the numbers don’t support that) and if Apple could have grown Mac sales by (an unrealistic) 50%, it still wouldn’t have made a noticeable change in their profitability.
The vast majority of the world consumes content only — doesn’t even touch an IDE, hence the proported shift away from PCs in the first place.
Man, we really have come full circle.
Of course they focused on the iPhone. As a corporation you can't blame them, focusing on that market led to them becoming the most profitable company in the history of capitalism on the planet Earth, to say that a publicly traded company should not have done that is basically economically insane (or at best naive). It is problematic, however, because in many ways the earning of massive profits was almost too easy, and that's led to a significant degree of laziness in the industry. Worse, the combination of massive profits and consolidation means that there are lots of plenty viable markets and customers who aren't being well served at present. Because the talent and capability to do so is locked up in these megacorps who can't be bothered to pay attention because they are drowning in money from the mobile devices business. There is a similar problem at google where the vast majority of the company's revenue comes in from search ads, rendering everything else the company does (even if it's important, even if it represents the foundation of a multi-billion dollar business) basically "for funsies" in comparison.
I think perhaps the Dutch East India company was the most profitable company in history. But yeah, they have done very well.
Most "valuable", certainly, especially at the height of the speculative bubble, but in terms of actually generating net positive cash flow from ongoing revenues?
The real story here is the sharp economic downturn in China.
The fact that Apple hit or exceeded their sales goals in most regions but crashed in China is telling.
Perhaps China is decoupling from global growth much like Japan did in the early 90s.
The fact that Apple hit or exceeded their sales goals in most regions but crashed in China is telling.
Perhaps China is decoupling from global growth much like Japan did in the early 90s.
Speaking only for myself, a single iPhone has always cost more than I want to pay. I'm doubly concerned with dropping it. My main thought with buying a phone is would I be willing to buy a second one if something happens to the first one.
Ive had many iphones. When they first came out, it was very common for all other phones to have a bracket on them to attach a lanyard, lanyards with decorative items were common.
After breaking and dropping several, i had lamented that i really wished that they had included the little lanyard bracket so i would drop it less.
I was literally told i was an idiot for not appreciating Ive's design asthetic.
Screw that. Personally, given how many times i have broken a screen, and then being told that "if you wanted to protect it, get a rugged case, all i can think is that the base design is faulty.
I dont want a case, but an unprotected phone is just too fragile. Apples response was to come out with a model which had glass also on the back.
I cant stand that people think that apple is withought fault...
After breaking and dropping several, i had lamented that i really wished that they had included the little lanyard bracket so i would drop it less.
I was literally told i was an idiot for not appreciating Ive's design asthetic.
Screw that. Personally, given how many times i have broken a screen, and then being told that "if you wanted to protect it, get a rugged case, all i can think is that the base design is faulty.
I dont want a case, but an unprotected phone is just too fragile. Apples response was to come out with a model which had glass also on the back.
I cant stand that people think that apple is withought fault...
I feel the same way. Especially with my new iPad (non-Pro). I don't want to ding the sides in my bag or accidentally dropping something on its back, but it's form factor and weight is perfect without a case.
I long for a future where iPads (or devices with similar capability) costs 10$s and Apple Pencils costs 5$s to not worry about them anymore. Because hoping companies to make things reliable/rugged anymore is such a false hope (or it's too expensive anyway).
I long for a future where iPads (or devices with similar capability) costs 10$s and Apple Pencils costs 5$s to not worry about them anymore. Because hoping companies to make things reliable/rugged anymore is such a false hope (or it's too expensive anyway).
> After breaking and dropping several, i had lamented that i really wished that they had included the little lanyard bracket so i would drop it less.
> I was literally told i was an idiot for not appreciating Ive's design asthetic.
That's ironic, since I have an old iPod Touch that has a build-in lanyard bracket.
https://gizmodo.com/5942681/the-ipod-touchs-newest-banner-fe...
> I was literally told i was an idiot for not appreciating Ive's design asthetic.
That's ironic, since I have an old iPod Touch that has a build-in lanyard bracket.
https://gizmodo.com/5942681/the-ipod-touchs-newest-banner-fe...
Their products have always been high priced. But they need to change. Cook has destroyed entire parts of their ecosystem and people have been moving away. Plugging my first iPod into my Mac felt polished in a way their products no longer do with one another. Even their services feel slapped onto their hardware. I shouldn’t ever get a message that my local hard drive is a limiting factor in my iCloud access or vice versa. I also shouldn’t have to wait for files to download from the cloud. Just do a network mount. That’s the sort of thing that would have been handled gracefully with Apple engineering in the past. They’ve stripped functionality out of their applications to force people to purchase software or services they don’t need - ala iMovie/FCP (to my understanding). The list goes on.
Which is why I have been using a cheap moto G for the last 5 years costs me < £150 and £7 a month.
If I lose it or drop it I am not concerned.
If I lose it or drop it I am not concerned.
Moto G here as well. Great battery life, decent everything else, if I run over it with the truck I just buy a new one.
A decent camera is the only thing I missed.
Got burned by HTC's obligatory flaws, LG's shipping known broken hardware, and didn't find the last premium iPhone I carried delivered enough value.
A decent camera is the only thing I missed.
Got burned by HTC's obligatory flaws, LG's shipping known broken hardware, and didn't find the last premium iPhone I carried delivered enough value.
Out of curiosity, do you have that same mindset (i.e. a factor of your decision to purchase is whether or not you're willing to buy another one if the first one is unusable) with anything else in your life? Also, Applecare+ is a worthwhile deal if you're that concerned about breaking the phone (and probably even moreso now with the glass-backed phones).
The difference for me is the "good enough" factor.
I'm fine with paying an explanation premium to go from 90 -> 100% functionality.
But only when 90% functional doesn't already cover my needs.
Apple goosed the iPhone price exactly as phone processors started hitting Moore's cliff of diminishing performance returns. High performance across the market + most users served by "good enough" processors = commodity
Apple's never done well with commodities.
I'm fine with paying an explanation premium to go from 90 -> 100% functionality.
But only when 90% functional doesn't already cover my needs.
Apple goosed the iPhone price exactly as phone processors started hitting Moore's cliff of diminishing performance returns. High performance across the market + most users served by "good enough" processors = commodity
Apple's never done well with commodities.
“Moore’s cliff”?
iPhone processors (unlike Macs) are still getting much faster every update. You can debate whether that extra speed is actually useful in everyday life, but they are getting faster.
iPhone processors (unlike Macs) are still getting much faster every update. You can debate whether that extra speed is actually useful in everyday life, but they are getting faster.
The A12 made some extremely smart memory µarch changes and benefited from a node shrink to TSMC's 7N.
We'll see how EUV scales for everyone.
We'll see how EUV scales for everyone.
There's an interesting psychological dynamic here that's probably relevant for other high visibility purchases, too.
I'm thinking cars in particular. There's a subset of us that under-spends relative to what we could own if we really wanted the greatest wheels on earth. It's not so much that we're in constant dread of an engine failure or crash that would turn a $90K Tesla or BMW into scrap metal. But we get most of what we want with Toyotas and Fords. And we're spared the stress of worrying about the well-being of one more precious element in our lives. (Houses, spouses and little kids create plenty of those stresses as is.)
I'm thinking cars in particular. There's a subset of us that under-spends relative to what we could own if we really wanted the greatest wheels on earth. It's not so much that we're in constant dread of an engine failure or crash that would turn a $90K Tesla or BMW into scrap metal. But we get most of what we want with Toyotas and Fords. And we're spared the stress of worrying about the well-being of one more precious element in our lives. (Houses, spouses and little kids create plenty of those stresses as is.)
The only thing I can think of is the $400-ish digital camera I bought to take pics when I really want something nicer than my cell phone. If I lost that, I might replace it.
To summarize the comments here...
Apple sells outrageously-overpriced commodity technology, coupled with gimmicky features, buggy software, and planned obsolescence, to naive consumers who buy it every year regardless.
AND
Apple’s products are so well-designed and reliable that customers remain satisfied for years and don’t feel the need to upgrade on an annual basis because their current devices do everything they need.
Also, Apple’s constant incremental innovation combined with the fact that they stopped all innovation a decade ago (save for headphone jack removal) will be the death of the company.
Apple sells outrageously-overpriced commodity technology, coupled with gimmicky features, buggy software, and planned obsolescence, to naive consumers who buy it every year regardless.
AND
Apple’s products are so well-designed and reliable that customers remain satisfied for years and don’t feel the need to upgrade on an annual basis because their current devices do everything they need.
Also, Apple’s constant incremental innovation combined with the fact that they stopped all innovation a decade ago (save for headphone jack removal) will be the death of the company.
Here's an idea on how to make billions selling a product in a market that seems in decline.
1) Take the latest Macbook Pro
2) Remove the Touchbar, add back F row buttons and ports.
3) Replace the LCD with a 4K OLED display with thin bezels
It is that easy.
1) Take the latest Macbook Pro
2) Remove the Touchbar, add back F row buttons and ports.
3) Replace the LCD with a 4K OLED display with thin bezels
It is that easy.
Agreed, they basically need to reverse direction:
1. Remove the touchbar 2. Bring back magsafe 3. Bring back the old keyboard
You're right about the screen bezels but I think it being a touchscreen is more important than OLED. That's basically standard on other laptops now.
1. Remove the touchbar 2. Bring back magsafe 3. Bring back the old keyboard
You're right about the screen bezels but I think it being a touchscreen is more important than OLED. That's basically standard on other laptops now.
I dont care about touching the screen. I care about it emitting as little light as possible.
Dark theme + OLED would be glorious for coding and battery life.
Dark theme + OLED would be glorious for coding and battery life.
I'd suggest replacing the LCD with a touchscreen model so the touchbar can appear at the bottom of the display. This would please the handful of users who'd miss it otherwise, and anyone who'd gone out of their way to develop an interface for the touchbar wouldn't feel that their work had gone to waste.
A touchscreen could also be a step toward being able to run iOS apps on Macs. I wouldn't claim this last piece is easy, but it could be a huge win if done right.
Apple should should make iPhones and Macs work so seamlessly together that they feel like different hardware extensions of the same device. Say, starting an application like FaceTime on one device and shifting it to the other without breaking the session. (Maybe they can do this already? If not, they should.) Again, not easy, but Apple has the resources to pull it off, and if they nail the execution they could boost the value of both product lines.
Also, greater memory options in their higher end Macs. Obviously most people don't need 64 gigs of RAM on their laptops, but for those who do, Apple should be working hard to make a Mac their first choice.
For lower end Macs, include a dongle with USB 3.0, Ethernet and 3.5mm audio jacks in the base package. It wouldn't cost that much to produce and it would give people peace of mind that their old peripherals will still work out of the box.
EDIT: Oh, and fix the keyboard. They need to set a standard for keyboard quality and typing comfort and accommodate that standard. If it means making their laptops a few millimeters thicker then so be it.
A touchscreen could also be a step toward being able to run iOS apps on Macs. I wouldn't claim this last piece is easy, but it could be a huge win if done right.
Apple should should make iPhones and Macs work so seamlessly together that they feel like different hardware extensions of the same device. Say, starting an application like FaceTime on one device and shifting it to the other without breaking the session. (Maybe they can do this already? If not, they should.) Again, not easy, but Apple has the resources to pull it off, and if they nail the execution they could boost the value of both product lines.
Also, greater memory options in their higher end Macs. Obviously most people don't need 64 gigs of RAM on their laptops, but for those who do, Apple should be working hard to make a Mac their first choice.
For lower end Macs, include a dongle with USB 3.0, Ethernet and 3.5mm audio jacks in the base package. It wouldn't cost that much to produce and it would give people peace of mind that their old peripherals will still work out of the box.
EDIT: Oh, and fix the keyboard. They need to set a standard for keyboard quality and typing comfort and accommodate that standard. If it means making their laptops a few millimeters thicker then so be it.
Even if they revised the MBP to be everything people want on these forums, it still would not make a dent in the problem mentioned in this article (how they can grow beyond the iPhone era). There aren't enough people buying computers and many people buying the Mac really have no issue with the Touch Bar at all. If Tim Cook said that the Mac was going to be their future growth engine, he would be laughed at.
For the record, I hate the Touchbar, but I still see no suitable option in place of Mac. Linux on the desktop is still not there and Windows is atrocious (I use it for my gaming PC, but that's it).
For the record, I hate the Touchbar, but I still see no suitable option in place of Mac. Linux on the desktop is still not there and Windows is atrocious (I use it for my gaming PC, but that's it).
Another suggestion:
1) Take the latest iPhone XS
2) Give it a better camera
3) Make it iPhone-SE sized, get rid of the huge display crop
4) Include 5G support
1) Take the latest iPhone XS
2) Give it a better camera
3) Make it iPhone-SE sized, get rid of the huge display crop
4) Include 5G support
You might as well ask for wings on it. So far 5G phones have to be extremely big and ungainly as they need antennas facing in numerous directions.
(and there is a large percentage of the population that prefers larger screen phones).
(and there is a large percentage of the population that prefers larger screen phones).
The XS camera isn't bad, but it does seem ridiculous that it takes worse portraits than the XR.
Thats not super suprising. I still recall my Samsung i997 if I recall correctly, from 2010. It made better looking, more vivid crisp and detailed photos than newest iPhone X does today. And got very decent photos with limited natural light. All iPhones gave up immediately the moment you dim or turn the lights off.
http://www.steves-digicams.com/camera-reviews/samsung/infuse...
I'm sorry, but I don't think that image is as crisp and clear as what a modern iPhone, Android, or any other modern smartphone produces in a similarly lit situation.
All small sensor-ed cameras, give up when lights get dim. Even some 35mm cameras have a hard time in low light situations. This problem is barely being solved with some of the computational photography that the Pixel does. Why? Physics of light collection on tiny image sensors.
I'm sorry, but I don't think that image is as crisp and clear as what a modern iPhone, Android, or any other modern smartphone produces in a similarly lit situation.
All small sensor-ed cameras, give up when lights get dim. Even some 35mm cameras have a hard time in low light situations. This problem is barely being solved with some of the computational photography that the Pixel does. Why? Physics of light collection on tiny image sensors.
Lived and invested in India for the last four years. This is definitely not China and I dont see the inclination among Indian consumers to shell out $1000 for an iPhone. India is the most competitive Android market in the world, with high-end, competitive phones with same features as an iPhone retailing for $200 - $300 (see Pocophone F1 by Xiaomi). Apple would need a radically different game-plan if they are serious about India.
Apple will just have to make a car, release a ring, move into healthcare AI, make their own Netflix, and come up with new things like a search engine or something completely new (yes I know you all think search is done and it’s impossible to compete with the incumbent). Or they could make a purchases in cash of up to $285bn which if you take that pile of money out of their stock price they look extremely cheap today.
I know that growth is obviously important, and Apple has had bigger quarters, but estimating $84 billion of revenue with a 38% gross margin in a SINGLE quarter is wild.
It is important for share price speculators
The company itself is okay of course
People that overbid its shares will not be
The company itself is okay of course
People that overbid its shares will not be
Seconded. Apple under Tim Cook can't invent interesting new things any longer, only play MBAish games with prices. But the company is fine.
Apple's greatest innovation might be that it leaves a bunch of Wall Street fools out of jobs. Does an economy need as many people predicting quarterly iPhone shipments to speculate on stock price as it takes to actually design said iPhone?
Apple's greatest innovation might be that it leaves a bunch of Wall Street fools out of jobs. Does an economy need as many people predicting quarterly iPhone shipments to speculate on stock price as it takes to actually design said iPhone?
And employees who count on stock options in their financial plans will not be happy.
Correct, employees of liquid publicly traded companies should get restricted stock units or restricted stock awards
Stock options holders simply wont exercise, and can buy shares for cheaper in the ESPP window
Too bad about the time used in the best years of their lives though, better to optimize that with better negotiation
Stock options holders simply wont exercise, and can buy shares for cheaper in the ESPP window
Too bad about the time used in the best years of their lives though, better to optimize that with better negotiation
Financially, Apple continues to be a well-managed company. It is generating returns for shareholders in spite of operational missteps.
What "operational missteps"?
What "operational missteps"?
Maps, BatteryGate, the unpopular decision to kill the jack, Butterfly KeyboardGate, the increasingly vocal unhappiness of professional users...
There are probably more, but those are the obvious ones.
There are probably more, but those are the obvious ones.
And outside of the tech bubble. No one cared.
Volume sales didn’t take a noticeable hit because of any of those issues...
And they have reported volume sales up through last quarter.
iPhone users are not flocking to Android in developed countries. Even in China, prices have more to do with Apples issues than anything.
Volume sales didn’t take a noticeable hit because of any of those issues...
And they have reported volume sales up through last quarter.
iPhone users are not flocking to Android in developed countries. Even in China, prices have more to do with Apples issues than anything.
One thing this article misses is Apple's strong 1 Billion+ installed base. Here is the thing: It is hard to make more money from a few million (and declining YoY) new devices that Apple sells every year. But Apple can make more and more money from every Apple ID currently active. This is a big change in their business model I agree but it just makes sense.
Bloomberg seems to love gory stories . Apple still has quite the low P/E ratio.
It's not just Bloomberg. Many others have been expecting this for a while because Apple has been disproportionately dependent on iPhone revenue and they don't have some new product that will push them to the next level.
Both the iPad and Watch are not the home run product that is needed.
In many ways Apple's extended software support of their older hardware gives users even less of a reason to buy a new device. I think that shows they are a company not primarily focused on profit because they could make changes to push people to upgrade their device faster.
It seems like they need to do more with services or start buying up some other businesses with all that cash they're sitting on.
Both the iPad and Watch are not the home run product that is needed.
In many ways Apple's extended software support of their older hardware gives users even less of a reason to buy a new device. I think that shows they are a company not primarily focused on profit because they could make changes to push people to upgrade their device faster.
It seems like they need to do more with services or start buying up some other businesses with all that cash they're sitting on.
It has a low P/E because it's revenue is falling, not growing.
Apple is failing the same way IBM had failed. It saw itself as a hardware company with software only promoting hardware sales. Sure they have the app store and apple music but that's a sliver of their income.
Apple has both failed to diversify into other areas and run out of ways to innovate in current ones. I'm not sure why they went for autonomous cars when they were such a easy sell as a consumer electronics brand, they could have sold TVs and home theatre systems that are so much easier to use than existing ones without much effort.
Apple has both failed to diversify into other areas and run out of ways to innovate in current ones. I'm not sure why they went for autonomous cars when they were such a easy sell as a consumer electronics brand, they could have sold TVs and home theatre systems that are so much easier to use than existing ones without much effort.
Unfortunately, I think one of their problems is that iPhones last too long. I'm still very happy with my iPhone 6. The spec updates aren't as tantalizing as they used to be.
Don't worry. Many people buy new ones based on gimmicks (the notch, marginally thinner devices, etc). But they're running out of those too.
Having a reputation for low quality would kill the demand they have now. Their strategy is to entice upgrades, not to replace on breakage. Which is better, as it makes for a happier consumer that had choices on this.
BTW: did you change your battery?
Having a reputation for low quality would kill the demand they have now. Their strategy is to entice upgrades, not to replace on breakage. Which is better, as it makes for a happier consumer that had choices on this.
BTW: did you change your battery?
Apple tried a slow drip of already ready features for half a decade
But they couldnt do it forever
But they couldnt do it forever
The good news for Developers is that native smartphone apps will start disappearing over the next 5-10 years in favor of WebAssembly apps (no more annoying app updates!) and we'll see a full swing back to a browser-based Internet.
[EDIT: Not implying Apple will support wasm, but their plateau enables other wasm-first platforms to emerge. Content providers will give away $100 phones to secure subscription revenue.]
[EDIT: Not implying Apple will support wasm, but their plateau enables other wasm-first platforms to emerge. Content providers will give away $100 phones to secure subscription revenue.]
WebAssembly isn't a magic bullet. The UI toolkit is the browser (DOM/HTML/CSS) and that's where everything will live and die. Whether the app is executing JavaScript or WebAssembly ultimately doesn't matter that much.
Apple still has to provide a solid web browser for mobile internet and they don't seem to be too keen on that anymore. So I'm not sure where your optimism is coming from.
Also, no more annoying app updates? Web apps are even worse with no way to hold onto on old versions! You're updating every time you open the app. Are app updates really that annoying?
Apple still has to provide a solid web browser for mobile internet and they don't seem to be too keen on that anymore. So I'm not sure where your optimism is coming from.
Also, no more annoying app updates? Web apps are even worse with no way to hold onto on old versions! You're updating every time you open the app. Are app updates really that annoying?
Properly structured assemblies should only download incremental dependencies.
Perhaps an RFC is required for secure background updates.
Perhaps an RFC is required for secure background updates.
Do actually ever notice your regular mobile apps updating? I don't. It happens automatically in the background when I'm connected to Wifi. If anything, mobile apps are worse as I don't control the time of the download at all.
It's not just updates. Having to install a one-time use app to book an airline or hotel reservation is a dated concept.
So you want developers to support a platform where their app is used only once?!? I think they'd prefer native 100x over web applications for that reason alone!
A simple web app is sufficient for most online transactions today. Even better if that web app can directly access GPU and interact with the hardware more natively using Javascript.
Nothing for the end user to install. Just use the next-gen mobile browser.
Nothing for the end user to install. Just use the next-gen mobile browser.
You haven't addressed the business case. The business case for a web app is terrible compared to natively installed app store app.
And certainly Apple has no incentive to give web applications more abilities to access the GPU and hardware so it's moot point anyway. It's a fantasy.
And certainly Apple has no incentive to give web applications more abilities to access the GPU and hardware so it's moot point anyway. It's a fantasy.
Web assembly is definitely a threat to apple’s app revenues, though maybe not an existential one. Given that apple are already experiencing a slowdown, and big names like Netflix are trying to avoid the “apple tax”, I’d expect to see them fight this tooth and nail. Even to the extent of blocking wasm on some sort of security grounds, wether valid or not.
> I’d expect to see them fight this tooth and nail. Even to the extent of blocking wasm on some sort of security grounds, wether valid or not.
Do you have an example of precedence that supports this extremely user hostile view of Apple?
Do you have an example of precedence that supports this extremely user hostile view of Apple?
PWA support. Safari was late to the party, and iOS doesn’t make adding a PWA intuitive at all.
Microsoft fought rich browser standards in favor of their own (ActiveX, Silverlight) and ultimately lost that battle.
Apple fought rich browser standards in favour of app store which provides an interface for installing applications as easy as web browsing and won that battle.
And they will continue to win that battle because they provide discoverability, monitization, hosting, and full device access and performance. The web alone can't compete against that.
And they will continue to win that battle because they provide discoverability, monitization, hosting, and full device access and performance. The web alone can't compete against that.
Which is not going to work.
"You can browse everything... except everything you want" is not going to be a popular USP.
"You can browse everything... except everything you want" is not going to be a popular USP.
Maybe so, but holding out is a strategy that could only be pursued by the bigger players, the smaller ones would have to cave and release via the App Store.
> Not implying Apple will support wasm, but their plateau enables other wasm-first platforms to emerge. Content providers will give away $100 phones to secure subscription revenue.
I don't understand the former has to do with latter. It would make more sense for content providers to go native than to use WASM if they are providing the hardware. If content providers are giving away hardware they'd want it completely locked down -- not open.
Also, Apple's plateau exists because the market is saturated. Everybody already has a smartphone how is there a market for yet another new platform?
I don't understand the former has to do with latter. It would make more sense for content providers to go native than to use WASM if they are providing the hardware. If content providers are giving away hardware they'd want it completely locked down -- not open.
Also, Apple's plateau exists because the market is saturated. Everybody already has a smartphone how is there a market for yet another new platform?
WebAssembly is native code targeted for and running in a browser virtual machine. The difference between JavaScript and WebAssembly is that there is a machine abstraction.
As someone wishing to change careers is moving into Wasm development a solid move? I've been hearing more about it over the last six months but I don't have much knowledge in the browser application arena.
I think it’s still too early. Right now, JavaScript is the language of choice because it’s easy to prototype in and more importantly hire developers for. I don’t see any startups putting in the massive costs in terms of time and labor to port their JS codebases to Rust any time soon. Slack doesn’t get THAT much better than it is now in JS. Wasm might be used in the future for easy cross platform mobile apps and desktop apps, but for web, unless you’re doing something high performance like 3D gaming, it doesn’t really matter.
Thank you for the information!
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I wish apple would consider creating a rack-mount server to compete with Intel. They clearly have the silicon expertise to mint their own CPUs. I realize this isn't a sexy industry with lots of growth, but neither is the phone market anymore.
Has Apple really done much on high TPD chips? The only ones we've really seen them make are low power draw mobile chips for their phones. The rest they just use Intel chips for all their laptops and even the iMac.
I don't really see them doing it because it's not somewhere they can really get away with their usual "we control the whole stack and you can only run our software on our hardware (legally)" mess they pull with macOS.
I don't really see them doing it because it's not somewhere they can really get away with their usual "we control the whole stack and you can only run our software on our hardware (legally)" mess they pull with macOS.
> I realize this isn't a sexy industry with lots of growth, but neither is the phone market anymore.
Samsung figured this out already. Their proportion of revenue from phones is decreasing while their semiconductor business is growing leaps and bounds.
Samsung figured this out already. Their proportion of revenue from phones is decreasing while their semiconductor business is growing leaps and bounds.
Having previously had experience with their old server line, I'd prefer they don't enter the space.
Please, not again. Their server hardware was such crap, and OSX really just isn't a great server OS.
Isn't the general server market dying because of the cloud?
10 years ago they use to?
[reiterating]*
-1 points by eruci 62 days ago | parent [-] | on: Apple Used to Be an Inventor. Now It’s Mainly a La...
Apple died with Steve Jobs. No new products just same shit with double and triple price. Shrinking customer base due to overpricing is the death of any company and utter betrayal of Jobs vision.
-1 points by eruci 62 days ago | parent [-] | on: Apple Used to Be an Inventor. Now It’s Mainly a La...
Apple died with Steve Jobs. No new products just same shit with double and triple price. Shrinking customer base due to overpricing is the death of any company and utter betrayal of Jobs vision.
Apple will need to focus more on the quality of its software (which has lagged) as the hardware is commoditized and they've maxed out our willingness to pay more for the iPhone.
Not surprising when you put almost all your eggs in one basket and the fad dries up.
It's been 143 years, and finally the fad of... phones is behind us.
Having the latest and greatest marginally improved status symbol of a phone fad.
I have a 2018 MacBook Pro and while I think it's objectively the best MacBook Pro they've ever made, it's just depressing to use. It feels like all the desire has been sucked out of it. It doesn't feel like Apple is making the best computer they can make, it feels like they're making the best computer for their bottom line. Most importantly, it feels like Apple has lost respect for their customers.