eXtensions - Sunday 30 December 2018
Cassandra - Apple End of Year: Tilting at Windmills (Updated)
By Graham K. Rogers
The other comment (which I bet Tim Cook now wishes he had not said, or phrased in a different way) was that, as the new Xs and Xs Plus iPhones had been released slightly early and some sales were included in Q4 2018, sales were probably going to be lower in the next quarter: Q1 2019. I expect these figures will be announced around 28 January. Apple has already factored in the sales with its guidance of between $89 billion and $93 billion, but analysts tend to ignore that: what does Apple know? What was missing from that comment on figures was that the iPhone XR had yet to appear: doing quite well apparently.
Within days, the analyst Ming-Chi Kuo, who for some reason many think is always right on Apple, reported supply chain adjustments. Downwards of course: never up. Tim Cook and others have often warned about making predictions from the supply chain as sometimes they may miss other sources that Apple accesses, and in other countries. However, as Cook had implied reductions, this was hardly a surprise. The shares began to fall. They usually do after a quarterly announcement, and a note from Ming-Chi Kuo never helps. Several other analysts jumped on the same bandwagon and down they went from a high of $232.07 on 2 October, to $156.23 at year end (the price actually hit $146.60 on 24 Dec).
Let me add one other metric that has a personal note. I attended the announcement of the iPhone in January 2007 and my Apple handler (now moved on to other things) was delighted that his Apple shares had moved beyond $200 while we were in San Francisco. Since that time, there has been a 7 for 1 share split, so the current price ($156.23) is an equivalent $1093.61. A look at the 10-year chart shows a significant upward gradient overall with two sharp drops followed by a recovery.
There are several questionable comments which appear with little or no support and appear to be based on opinion. I will however agree about the difficulties with app discovery on the "Apple Store" (sic), by which he may mean either the iTunes App Store, or the App Store for macOS users. Does Chowdhry research his subject? This is sloppy. One comment is worth highlighting: citing the lack of innovation (which he has mentioned in the past) he expresses concern that Apple has relied on on a single product (with upgrades) for so long, which is proof of stasis (ergo stagnation, leading to doom).
Like other smartphone makers, some of whom sell more devices, although may not make the same profits (which Chowdhry seems to object to), the product has been ibn continuous development throughout its life and should not be assessed as a single device. Several developments (64-bit OS, Fingerprint IS, Face recognition) have caught those other handset makers on the hop. Their attempts at copying the concepts have not always met with the same degrees of success. Every iPhone model produced has seen advances over the model it supersedes. Although some see the "S years" as treading water, these models have included improvements in processor feartures and camera technology.
There is also no mention of other projects, like the long-anticipated Apple Car (Project Titan), for which Apple is still hiring new personnel. Rather than have a product road map, Apple would rather avoid the Osborne Effect, which so haunted Steve Jobs that pre-announcing product lineups is still of concern at Apple. [As an aside, the English Department of Illinois State University had an Osborne 1 when I studied there in the mid-1980s.]
Instead Apple has solid lines of computers (notebook, desktop), and handheld devices (iPhone, iPad, iPad Pro). There is room for some consolidation with regard to notebook computers, and expansion of the Mac Pro computer lines. But why spoil what works (in general terms) for a Chowdhry splash? Apple has always preferred evolution of a trusted range of products, with the occasional revolutionary introduction. These are unlikely to be annual events.
Likewise, Apple has improved its ecological approach with regard to materials used: a long-term approach. The wakeup call came after a demonstration by Greenpeace at the time of that 2007 iPhone announcement, although the diesel generators used to power projectors outside the Stockton Street Apple store did weaken the case that Greenpeace tried to present. There has been considerable headway made in selection of sources for raw materials, such as cobalt.
The analyst short-sightedly ignores (or is unaware of) the background work that is constantly underway, some of which may not see the light of day for several years (some never), and may not be in the public sphere: for example improvements in industrial processes that make manufacturing more efficient (and hence more profitable or safer). With WWDC only 6 months away, work on new versions of iOS, macOS and WatchOS are underway. These will integrate with the next versions of the hardware. Apple is not complacent, or inert, and it is irresponsible to suggest that it is.
Graham K. Rogers teaches at the Faculty of Engineering, Mahidol University in Thailand. He wrote in the Bangkok Post, Database supplement on IT subjects. For the last seven years of Database he wrote a column on Apple and Macs. After 3 years writing a column in the Life supplement, he is now no longer associated with the Bangkok Post. He can be followed on Twitter (@extensions_th)
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