Apple Lowers Revenue Guidance for Q1 2019 Citing 'Fewer iPhone Upgrades' Than Anticipated

[Shiro_Simba]

Thank you for saying that. The "Apple r doomed!" sentiment is not contributing anything of value to the conversation.

Apple knows what it is doing. It was reaping the excesses of their reputation for as long as they were able to. Now they'll need to adjust to the market realities. This could've been their plan all along.

If they continue along this trajectory in 2020 THEN it will be the time to begin to express concern. I say 2020 instead of 2019 because of a thing called, "project momentum". Any projects currently in the works will need to work its way through the pipeline and into the market. There are most likely contracts that Apple has with its suppliers/contractors that obligate Apple to certain quantities.



I fit into the category of those who are fading out of Appleland. Lower quality and higher prices is not the recipe for attracting discerning consumers. I'm enjoying the Apple products that I currently have, but as each reaches the end of its productive life, it will be replaced by an non-Apple alternative. If Apple were to change their current direction, I'd be happy to buy Apple products. I have no brand loyalty, I just buy what does what I need it to do and is a good value.

Good observation, i agree with your 2020 statement.

I have lots of Apple gear , but did not see the value of the Mac mini, most recently , and got a intel skull canyon .

My only concern , post 2020, there will be no jobs to return and reset things .

 

[john123]

The apple is doomed is a silly statement , and we need to stop taking that as factual, it’s more of a joke.

Apples great strength was it’s products aimed at the average consumer , it grew fast. With the current price hikes , the average joe is no longer the target audience , so the user base will become smaller ? This has nothing to do with Apple being doomed , it’s a question of who the target consumer geographic is.

From my personal experience, I’ve seen a move away from Apple from my fellow friends , co-workers and family in the last two years, a poor sample group but many did not see the value for money now, nor were they after a fashion accessory (for some users the brand is all that matters)

Domestically I don’t think the target consumer has changed, actually. (That’s really a misnomer as the market has many segments, and Apple simultaneously targets several of them.) There’s simply:
1) more competition within these niches and less room for differentiation; and
2) more marketing dollars being funneled toward the higher ASP products

 

[sracer]

Good observation, i agree with your 2020 statement.

I have lots of Apple gear , but did not see the value of the Mac mini, most recently , and got a intel skull canyon .

My only concern , post 2020, there will be no jobs to return and reset things .

Jobs (or a reasonable facsimile) isn't needed to adjust. When I see the massive untapped potential in each of Apple's currently offerings from the Apple Watch to the Mac Pro, there is plenty of "headroom" to expand and enhance things. If I can see that stuff, I have no doubt that Apple sees that and far, far more. And that's just on the hardware side... they could return to software in a serious way. (but then again, I'm a fan of iWork )

 

[Shiro_Simba]

Jobs (or a reasonable facsimile) isn't needed to adjust. When I see the massive untapped potential in each of Apple's currently offerings from the Apple Watch to the Mac Pro, there is plenty of "headroom" to expand and enhance things. If I can see that stuff, I have no doubt that Apple sees that and far, far more. And that's just on the hardware side... they could return to software in a serious way. (but then again, I'm a fan of iWork )

“John Sculley ruined Apple and he ruined it by bringing a set of values to the top of Apple which were corrupt and corrupted some of the top people who were there, drove out some of the ones who were not corruptible, and brought in more corrupt ones and paid themselves collectively tens of millions of dollars and cared more about their own glory and wealth than they did about what built Apple in the first place which was making great computers for people to use”

This quote - worries me every time I read it . That the culture has gone back to profit above all else.

 

[sracer]

“John Sculley ruined Apple and he ruined it by bringing a set of values to the top of Apple which were corrupt and corrupted some of the top people who were there, drove out some of the ones who were not corruptible, and brought in more corrupt ones and paid themselves collectively tens of millions of dollars and cared more about their own glory and wealth than they did about what built Apple in the first place which was making great computers for people to use”

This quote - worries me every time I read it . That the culture has gone back to profit above all else.

I'm open to the possibility of being completely wrong about Apple not needing a Jobs-like person.

 

[Shiro_Simba]

I'm open to the possibility of being completely wrong about Apple not needing a Jobs-like person.

Nah, I think I’m just nostalgic

 

[OllyW]

Just curious did your circle upgrade to the expensive phones like a note 9 or other android phones that cost over $1,000 or go Oneplus or huawei?

Samsung Galaxy phone’s, not exactly sure which ones. One of them was a S9 which looked pretty good but they were all cheaper than the iPhone upgrades they were offered.

 

[Mainsail]

I have to admit that I really like the Apple ecosystem; iOS, MacOS, TV OS, iWork, HandOff....etc. Everything just works so nicely together. I am willing to pay a reasonable (admittedly subjective) premium for their products. Also, I am less hung up on the specs and more on interested in the overall user experience. We get fixated on the price of Apple's highest end products, but there are ways to buy Apple products without spending huge amounts of money if you are willing to look for some deals. Here are some examples;

refurbished iPhone 8 64GB: on sale through Apple store for $499
2018 iPad: on sale during the holidays for $229
2018 MBA: on sale during the holidays for $999
2017 MBA: on sale during the holidays for $799
2018 Mac Mini: on sale during the holidays for $699

You can still enjoy a great user experience without spending big bucks.

PS - For instance, you can have an Apple Desktop for Home/Office plus a great Tablet for on the go computing all for less than $1,000. Assuming you have a Monitor, Keyboard and Mouse around the house.....which most folks do.

 

[I7guy]

“John Sculley ruined Apple and he ruined it by bringing a set of values to the top of Apple which were corrupt and corrupted some of the top people who were there, drove out some of the ones who were not corruptible, and brought in more corrupt ones and paid themselves collectively tens of millions of dollars and cared more about their own glory and wealth than they did about what built Apple in the first place which was making great computers for people to use”

This quote - worries me every time I read it . That the culture has gone back to profit above all else.

Customers first and profits will follow. Peter Drucker 101. Companies who put profits first tend to die on the vine fairly fast.

 

[nickgovier]

.

 

[john123]

I don't like how everyone assumes price is the key reason for fewer upgrades. I personally cannot stand the X/XS notch, rounded corners, narrow aspect ratio, inability to use with one hand, and overloading of swipe gestures to get around the lack of a home button. I see it as an abject design failure, built simply to do something different (not better) for the 10th anniversary of the iPhone. I will never downgrade to a X/XS, regardless of the price.

However, if Apple released an updated SE with the same design, I would buy it on day 1.

This thread is sadly full of assumption and light on people using facts and numbers.

 

[The-Real-Deal82]

I don't like how everyone assumes price is the key reason for fewer upgrades. I personally cannot stand the X/XS notch, rounded corners, narrow aspect ratio, inability to use with one hand, and overloading of swipe gestures to get around the lack of a home button. I see it as an abject design failure, built simply to do something different (not better) for the 10th anniversary of the iPhone. I will never downgrade to a X/XS, regardless of the price.

However, if Apple released an updated SE with the same design, I would buy it on day 1.

I focus on price as it’s the one thing that pops up in conversation so often when not being discussed among enthusiasts. The media articles here focused on price and continue to do so too. The iPhone XS no longer seems to be marketed and all focus has gone to the XR here which I feel is telling on what the key market here is.

 

[Laki021]

I don’t see any advantage to stainless steel from a practical point of view. It adds weight and cost and it’s purely subjective whether it looks more premium or not. Then again my iPhone is mine and not for the benefit of others so what it looks like is far down the list of necessities for me. Not sure why you’d pay £200 more just for a bit of polished steel edging.

Well that's the very point of premium product, premium look and feel.

It's not supposed to be the best value for money, but an uncompromised product in every aspect, including the materials, no matter if they offer practical advantage (or are necessary) or not.

And yes, it does look and feel more premium, no doubt about that. On top of that it's much more scratch and damage resistant.

 

[nebo1ss]

I’ll be keeping my iPhone 8 Plus for at least 3 years but I’ve no idea what I’ll do when it does become time to upgrade.

I certainly won’t be paying over a £1000 for a new phone and the prospect of paying around £500 for a two year old design doesn’t really interest me either so I may have to look elsewhere if Apple keep raising their prices.

This. I wonder how much of the reduction is really due to China and how much to users just not prepared to pay $1,000 plus for a phone and have delayed any upgrade. It might just be convenient to blame China at the moment but like others i have not upgraded and have no intention of upgrading at the moment. My existing phone works just fine.
It also makes me wonder about the Battery issue where they were slowing down phones and got caught out and had to do a battery upgrade programme.

 

[The-Real-Deal82]

Well that's the very point of premium product, premium look and feel.

It's not supposed to be the best value for money, but an uncompromised product in every aspect, including the materials, no matter if they offer practical advantage (or are necessary) or not.

And yes, it does look and feel more premium, no doubt about that. On top of that it's much more scratch and damage resistant.

Then why are people even worried that it sells less units than iPhones prior to it? If it’s a premium product as you say then it’s market is much smaller to begin with.

Personally I prefer a lighter phone as I carry it everywhere. My 8+ is far too heavy and I dread to think what a heavier phone would be like in general use. Looking premium is irrelevant to me as it’s a business tool first and foremost and not something I need to use to give out false impressions of social standing. Not that the 8+ looks any less premium than any other iPhone IMO. It works the same as any other iPhone too and that’s what counts.

 

[rmsanger]

I think some perspective is in order.... Was Apple's results disappointing yes. Where they unexpected no.

Amazon made $4B of operating profit on $178B of revenue last year while Apple's operating profit was $71B on $266 B. Apple closed the year with over $130 B in current assets and significant surplus over their current liabilities.

Is the valuation of Apple to optimistic on future profits, of course. But Amazon would kill to have a product portfolio as profitable as Apple. I would argue it's healthy for Apple to find a price point of elasticity as up to this point they have been able to raise prices without impacting volume. We have finally found the inflection point where consumer's price sensitivity around i-phones has been reached. There is significant value for apple to know this point and re-shape the product portfolio, positioning, and pricing strategies.

What apple needs now is 1 additional significant product innovation that provides a pipeline for future growth. I don't mean in low growth low margin businesses like watches and tvs. What they need a product hits in areas like OS for autonomous driving vehicles.

 

[Romeo_Nightfall]

I think some perspective is in order.... Was Apple's results disappointing yes. Where they unexpected no.

Amazon made $4 B of operating profit on $178 B of revenue last year while Apple's gross profit was $71 B on $266 B. Apple closed the year with over $130 B in current assets and significant surplus over their current liabilities.

Is the valuation of Apple to optimistic on future profits, of course. But Amazon would kill to have a product portfolio as profitable as Apple. I would argue it's healthy for Apple to find a price point of elasticity as up to this point they have been able to raise prices without impacting volume. We have finally found the inflection point where consumer's price sensitivity around i-phones has been reached. There is significant value for apple to know this point and re-shape the product portfolio, positioning, and pricing strategies.

What apple needs now is 1 additional significant product innovation that provides a pipeline for future growth. I don't mean in low growth low margin businesses like watches and tvs. What they need a product hits in areas like OS for autonomous driving vehicles.

Will not happen
Car manufacturers won’t let in apple or google as an os. Apple can only build a car, which they seem can’t

 

[rmsanger]

Will not happen
Car manufacturers won’t let in apple or google as an os. Apple can only build a car, which they seem can’t

I respectfully disagree as the major carmakers are not in the business of software and designing AI. It will be a total flop for Ford and GM to start trying to build their own tech. They will focus on the hardware deliverable and leverage somebody like an Apple to build the OS/Algs.

There is a huge windfall for any company that can crack the nut and get a beachhead on this market. I'm betting against Tesla on this front.

 

[Romeo_Nightfall]

I respectfully disagree as the major carmakers are not in the business of software and designing AI. It will be a total flop for Ford and GM to start trying to build their own tech. They will focus on the hardware deliverable and leverage somebody like an Apple to build the OS/Algs.

There is a huge windfall for any company that can crack the nut and get a beachhead on this market. I'm betting against Tesla on this front.

GM Has an auto pilot afaik
If they play with the bad boys, they will disappear - You can only survive if You have SW and hw

Samsung is in trouble too having no sw, they try to push Bixby, but their os was a fail

Tesla is an energy and AI company far superior to the closed mind car business. Cars are like Apple TV for them, a hobby.
They want transform world to energy autarcticiy and self driving. Cars where just needed, because You can’t get them from major manufacturers

Same problem apple has, no one sells them a Plattform!

 

[rmsanger]

GM Has an auto pilot afaik
If they play with the bad boys, they will disappear - You can only survive if You have SW and hw

Samsung is in trouble too having no sw, they try to push Bixby, but their os was a fail

Tesla is an energy and AI company far superior to the closed mind car business. Cars are like Apple TV for them, a hobby.
They want transform world to energy autarcticiy and self driving. Cars where just needed, because You can’t get them from major manufacturers

Same problem apple has, no one sells them a Plattform!

All of the major autos have tried for the last decade to develop a tech/entertainment system only to get beat out by carplay and android auto. IMO Apple has the capability to build out a full AI platform that could be standardized across all auto manufacturers. Time will tell...

 

[Shiro_Simba]

All of the major autos have tried for the last decade to develop a tech/entertainment system only to get beat out by carplay and android auto. IMO Apple has the capability to build out a full AI platform that could be standardized across all auto manufacturers. Time will tell...

CarPlay is nice - and a game changer to get a common platform across cars - very welcome .

AI platform for cars - do we need this ? Maybe

 

[Gilligan's last elephant]

I think some perspective is in order.... Was Apple's results disappointing yes. Where they unexpected no.

They were to Apple. No company sets a predicted revenue they do not expect to meet. Bonuses are at stake.
[doublepost=1546636904][/doublepost]

I respectfully disagree as the major carmakers are not in the business of software and designing AI. It will be a total flop for Ford and GM to start trying to build their own tech. They will focus on the hardware deliverable and leverage somebody like an Apple to build the OS/Algs.

There is a huge windfall for any company that can crack the nut and get a beachhead on this market. I'm betting against Tesla on this front.

Based on the comparison between Google Maps and Apple Maps or Google Assistant and Siri, who would pick Apple

 

[Rob_2811]

When growth stalls, the next logical step is to raise prices, not lower them.

I would love to see the absolute chaos that would result from Apple putting the price of the iPhone up even further.

Anybody who doesn't think that the slow sales owe partly to the price of the new phones is very naive.

While you do have a valid point in that it is not really my business as a consumer how profitable the iphone is, it does also strike me as an extremely short-sighted one. What do you think are the odds of Apple continuing to meaningfully support a device that earns them only $1 in profit? Heck, why even bother releasing a device that is not going to earn Apple much money, if at all?

Have you never wondered why the iOS App Store seems to be so much more successful than the google play store? How it continues to attract the best apps first despite having the smaller market share? Might it be precisely because customers are willing to pay more for quality apps, which in turn draws developers to the platform, and the promise of a greater payday motivates developers to create better-quality apps for iOS relative to Android?

Refuse to pay, or turn to piracy, and see what happens. Apps for android come late or not at all, and they are sometimes of worse quality than their iOS counterparts. In the end, the ones to lose out are the consumers themselves.

The apps are better quality because the platform is vastly easier to develop for than Android. You're also ignoring the fact that developers are forced to put their apps on the App Store, you can sideload apps on an Android device.

 

[I7guy]

I would love to see the absolute chaos that would result from Apple putting the price of the iPhone up even further.

Anybody who doesn't think that the slow sales owe partly to the price of the new phones is very naive.

Yes, it may be a factor this year but wasn’t last year. The market was wild in 2018 maybe more people are holding on to their cash.

Tim is a “steady as she goes” type of guy, not worried about something extreme being done.

The apps are better quality because the platform is vastly easier to develop for than Android. You're also ignoring the fact that developers are forced to put their apps on the App Store, you can sideload apps on an Android device.

The apps MAY be better quality due to the forced review, more potential income etc

 

[linkgx1]

Well, if I was a typical consumer, I just don't think I would be in the market for an XS. I would be looking at the XR. So, I am looking at the comparable options 3 years ago....from a typical consumer's perspective. If I wanted a big iPhone 3 years ago, a typical consumer would have bought the 6s plus.

The problem is that the XS is really not comparable to the prior offerings, since it has OLED display, multiple cameras, stainless steel construction, etc... I really don't see it as an everyday consumer product. The 6s plus was a consumer product for folks that wanted a bigger display.

It is kind of like you can't really compare the iPad Pro with the iPad Air 2 (which was the flag ship before the pro). It is more reasonable to compare the 2018 base iPad......which is more of an everyday consumer product.

However, I do see your point that the introduction of these various product tiers (consumer and "pro") confuses matters.

If you were buying the XR as a typical consumer, what would be a better comparison from 3 years ago? The reason this is important is that prior purchase prices set expectations with many consumers. Especially, those folks that don't endlessly scan tech sites and fixate on specs.

I have the XR and came from an 8plus (6 plus before that). It's weird in that I thought the XS Max would be my dream phone, but the sheer size and cost were a bit much (6.1'' at 999 would have been great). I mean my XR does 99% of what the X does. I feel like instead of making a pro phone with the max they made a luxury phone.