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

[rafark]

Scary news for iPhone users. Apple will be under pressure to make you buy a new phone. You know what that means.

 

[Rob_2811]

Time going in on Timmy ..

In addition, Cook wrote on Wednesday that economic conditions slowed in China in the second half of 2018 and that shopping traffic was hurt by uncertainty about the U.S.-China trade war. Here, too, Apple missed opportunities to caution investors.

Cook said two months ago that Apple’s China business was “very strong,” even amid signs of an economic slowdown and months of headlines about trade tensions with the U.S. He consistently told investors that he thought the U.S. and China would resolve their trade dispute amicably and didn’t give any indications that consumers were on edge or reluctant to shop because of the geopolitical fracas. It’s possible that the last couple of months of economic circumstances in China, Taiwan and Hong Kong caught Apple by surprise, but executives failed to give any hints of red flags in the region.

This is a trend years in the making. But at each and every opportunity, Cook has dismissed questions about whether changes in upgrade behavior will hurt Apple’s revenue.

Apple failed in the No. 1 mission of being a public company: being honest with investors about its business. The company simply denied the reality that was staring it in the face, until denial was no longer an option.

http://time.com/5492878/apple-stock-iphone-sales/?xid=tcoshare

 

[john123]

Good. Time for Tim to stop the grift. Price products appropriately. Customers first, not shareholders. A return to the days of a 30% 'Apple Tax' (as opposed to whatever eye-watering number it is at now) is long overdue.

It’s the same damn number.

 

[I7guy]

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.

I don't know what a "pro" phone means. I love using my max. Love the camera, battery life and screen size.

What do you think that s10 is going to cost with 1TB SSD?

 

[Abazigal]

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.

One should not make the mistake of confusing the vocal minority here at Macrumours for the sentiments of the overall user base of Apple.

In the same vein, I don’t see why everyone here is so darn sure that lower prices would have necessarily translated into better financial results, especially when it has been revealed that the iphones cost more primarily because they are more expensive to make.

So yes, you may sell more iPhones at lower prices, but then margins will also be way less, and the end resulting profit could still have been less than if Apple had sold fewer iPhones at higher prices.

The high end smartphone market is getting saturated. Apple knows this. Their solution is not to lower prices, because that would be silly, but instead to pivot to wearables and transportation.

Apple has been telegraphing their intentions to move away from the iphone for many years now, but for now, they are content to continue milking the iPhone because why not?

I don’t know why people are suddenly pretending like it’s a new thing.

 

[Michael Goff]

Scary news for iPhone users. Apple will be under pressure to make you buy a new phone. You know what that means.

Never understood the argument that Apple slows down phones to make you buy a new one. It makes no sense.

 

[mib1800]

Never understood the argument that Apple slows down phones to make you buy a new one. It makes no sense.

Makes perfect sense to apple to the extent they lied and concealed the fact for years.

 

[ipponrg]

Never understood the argument that Apple slows down phones to make you buy a new one. It makes no sense.

Did you not forget that the performance on the iPhone 6S before the iPhone X diminished greatly due to battery throttling? Then it turns out that Apple wanted to throttle the iPhones because the newer OS required more power to perform close to the previous OS on that phone. The noticeable sluggish performance in my 6S was what prompted me to buy the X.

Now let's take a step back. Let's assume Apple didn't throttle. You know what's an indirect way to slow down a phone? Make the OS use more CPU/GPU power. For each new iOS release, we are seeing more fancy animations and features. This will chew up performance on older compatible phones.

 

[Michael Goff]

Did you not forget that the performance on the iPhone 6S before the iPhone X diminished greatly due to battery throttling? Then it turns out that Apple wanted to throttle the iPhones because the newer OS required more power to perform close to the previous OS on that phone. The noticeable sluggish performance in my 6S was what prompted me to buy the X.

Now let's take a step back. Let's assume Apple didn't throttle. You know what's an indirect way to slow down a phone? Make the OS use more CPU/GPU power. For each new iOS release, we are seeing more fancy animations and features. This will chew up performance on older compatible phones.

No, that’s not even why. Over time, peak performance cannot be obtained by an older battery. Even if every OS used the same peak draw, the same thing would eventually occur.

 

[ipponrg]

No, that’s not even why. Over time, peak performance cannot be obtained by an older battery. Even if every OS used the same peak draw, the same thing would eventually occur.

Perhaps I phrased it wrong. When I said battery throttling, I meant that Apple was throttling your iPhone to conserve battery life. After they stopped this, the UX performance wasn't as sluggish before with the newer OS.

 

[rafark]

Never understood the argument that Apple slows down phones to make you buy a new one. It makes no sense.

It makes perfect sense. In fact, apple just admitted sales dropped in part because of the battery replacement program.

What is the #1 reason 99% of users upgrade? It's not to get new features, it's because their current device gets slow or incompatible. when your device gets slow the first thing that comes to your mind is "I need a new one".

With that in mind, Apple has the power to make your device slow so that you get a new one. Some people may complain, others may leave the plattform, but most would just buy a new phone and forget about it.

 

[john123]

It makes perfect sense. In fact, apple just admitted sales dropped in part because of the battery replacement program.

What is the #1 reason 99% of users upgrade? It's not to get new features, it's because their current device gets slow or incompatible. when your device gets slow the first thing that comes to your mind is "I need a new one".

With that in mind, Apple has the power to make your device slow so that you get a new one. Some people may complain, others may leave the plattform, but most would just buy a new phone and forget about it.

1) You’re assuming that there was an intentional action to cripple performance to drive sales rather than that being a side effect. Big assumption and, to date, zero proof or evidence.
2) Don’t make up statistics, even for dramatic effect. Users upgrade for lots of different reasons. Features is #1 to a sizable fraction, especially the niche of annual upgraders.

 

[I7guy]

....The noticeable sluggish performance in my 6S was what prompted me to buy the X

Apple replaced the battery on my 6s and then 11 months later I bought the max. People can claim anything in the internet.

 

[Michael Goff]

Perhaps I phrased it wrong. When I said battery throttling, I meant that Apple was throttling your iPhone to conserve battery life. After they stopped this, the UX performance wasn't as sluggish before with the newer OS.

They were throttling it because peak power draw was shutting down phones. Also, iOS 11 ran worse than 10 what are you talking about?

 

[chatin]

Jeff Reeves is saying Apple stock will never recover. iPhone X variants in an "awkward position". I don't agree knowing the products have some good years left just with different management.

 

[0388631]

Yeah, maybe. But the real reason perhaps is that they're too damn expensive.

Unfortunately, this seems to relay towards makers of flagship Androids. I've read rumor reports of the midrange S10 costing close to $1,000 with the lite/light version at just a hair under $800. And I suspect those are at base storage prices. The top end of the spectrum will supposedly be a 5G phone with up to 1 TB in flash storage. Can't begin to imagine the price it'll be at.

It won't be long before a mid-range Android becomes a $500-700 phone.
[doublepost=1546679206][/doublepost]

Stop focusing on the money. Yes, they are a profitable company. So was RIM, so was Nokia, so was Microsoft with the RAZR.

.

Motorola, not Microsoft.

 

[Shanghaichica]

The market is saturated. That's all there is to it.

 

[sofila]

1) You’re assuming that there was an intentional action to cripple performance to drive sales rather than that being a side effect. Big assumption and, to date, zero proof or evidence.

Apple refused to replace iPhone (paid) batteries until forced by negative news spreading all over the place. Many customers were driven to buy a new phone. That is what I'd call an intentional action.

 

[john123]

Apple refused to replace iPhone (paid) batteries until forced by negative news spreading all over the place. Many customers were driven to buy a new phone. That is what I'd call an intentional action.

Again, that’s still not the same thing as crippling the devices in order to spur sales. Causation versus correlation.

To be clear, “planned obsolescence” is most definitely a real thing. Of course each (free for a reason) iOS release will be optimized for the newest devices.

I simply don’t believe the battery issue was part of that strategy. Nearly anyone who was an MBA student post Enron wouldn’t even hint at such a thing. The number of people who would have to be “in” on that conspiracy is pretty large. Occam’s Razor says that selling more new phones was a side effect of that one particular (bad) design choice, not the intent.

 

[Rob_2811]

One should not make the mistake of confusing the vocal minority here at Macrumours for the sentiments of the overall user base of Apple.

In the same vein, I don’t see why everyone here is so darn sure that lower prices would have necessarily translated into better financial results, especially when it has been revealed that the iphones cost more primarily because they are more expensive to make.

So yes, you may sell more iPhones at lower prices, but then margins will also be way less, and the end resulting profit could still have been less than if Apple had sold fewer iPhones at higher prices.

The high end smartphone market is getting saturated. Apple knows this. Their solution is not to lower prices, because that would be silly, but instead to pivot to wearables and transportation.

Apple has been telegraphing their intentions to move away from the iphone for many years now, but for now, they are content to continue milking the iPhone because why not?

I don’t know why people are suddenly pretending like it’s a new thing.

Ok few things here,

1. The idea that the phones are too expensive is not a point of view that is only expoused on the Macrumors forums, one look on social media will tell you that this is a commonly held opinion.

Piper Jaffrays research after the release of the iPhone X had "Phones being too expensive" as the second most commonly cited reason that people didnt upgrade. 31% cited the price as an issue.

https://9to5mac.com/2018/03/05/didnt-upgrade-to-the-iphone-x/

2. The fact that the iPhones were more expensive to build is not the only reason the phones cost more. Tech Insights had the iPhone X build costs as 25% higher than the iPhone 8 but retail cost at 43% higher. With margins of 59% on the 8 and 64% on the X.

https://www.reuters.com/article/us-...gin-than-iphone-8-analysis-idUSKBN1D62RZ?il=0

3. Wearables isn't likely to be as big a market as the phone any time soon, if it was Apple would be breaking out those Apple Watch numbers. As for transportation that is absolute pie in the sky. The profit margins for car manufacturers is tiny. They wont be selling many cars with 30-60% margins that's for sure.

 

[sofila]

Again, that’s still not the same thing as crippling the devices in order to spur sales. Causation versus correlation.

To be clear, “planned obsolescence” is most definitely a real thing. Of course each (free for a reason) iOS release will be optimized for the newest devices.

I simply don’t believe the battery issue was part of that strategy. Nearly anyone who was an MBA student post Enron wouldn’t even hint at such a thing. The number of people who would have to be “in” on that conspiracy is pretty large. Occam’s Razor says that selling more new phones was a side effect of that one particular (bad) design choice, not the intent.

It is not a conspiracy. The "large number of people needed" amounts to Apple's employees in stores, following management's instructions and refusing to replace a battery on your iPhone even while you were willing to pay the replacement. And again, I'm not talking about software releases. Just used old batteries no more working as expected while the rest of the phone is doing well. 29 dollars or 69 or 89....quite different than buying a new iPhone. From a customer's point of view that does'n sound good. Maybe an AAPL stockholder was happy with that.

 

[Radon87000]

What message, the $84B message? I would hate to explain to the board how my company only made $84B in one quarter.

The drastic decrease in sales which resulted in Apple hiding unit sales and the forecast going down from 93 to 84. Apple hiding the sales due to a decline is confirmed.

What’s throttlegate?

https://www.wired.com/story/how-to-stop-apple-throttling-iphones/

I’ve cited multiple times android shutting down. Please provide sime citations of a generic, endemic problem with the max.

You cited nothing but clickbait blog articles. Lets match the circumstances for proper comparisons

Were multiple lawsuits filed for random shutdowns?
Was an investigation initiated in multiple countries for shutting down phones to increase sales?
Were the shutdowns addressed and a public apology letter issued which later resulted in an even bigger decline in sales?

The official response is the opposite

https://www.cultofmac.com/521005/samsung-lg-dont-throttle-phones-like-apple/

"“Never have, never will! We care what our customers think.” said Samsung in a statement to The Verge. “We do not reduce CPU performance through software updates over the lifecycles of the phone.”"

Android won’t get sued their phones just shut off.

Samsung is an even bigger manufacturer than Apple. If they were shutting down as you claim, the lawyers worldwide would be all over it by now. No one says no to a pile of cash. Do you have anything more concrete than forum links and blogs?

In the mean time

https://forums.imore.com/iphone-se/383776-iphone-se-unexpected-shutdown-issue.html
https://forums.imore.com/iphone-xs-max/407444-iphone-xs-max-random-shut-off.html
https://discussions.apple.com/thread/8564528
https://discussions.apple.com/thread/8181554

So this means even iPhones are randomly shutting down!

Sure, I put this opinion in exactly the same place I put other opinions found on the internet.

However I upgraded and enough people upgraded or bought new to have an $84 billion quarter. Apple has to face the music, the days of decimating other companies in terms of revenue are over.

Tim Cook flat out said battery upgrades slowed iPhone sales. This means prior to this they were increasing sales. You are literally contradicting Tim's own words

Planned obsolescence was never started.

Which is probably why battery upgrades have slowed sales right?

These aren’t my figure, I’m citing someone else who appears to know the subject matter being discussed

And the sites the guy was citing were estimates
[doublepost=1546705684][/doublepost]

Scary news for iPhone users. Apple will be under pressure to make you buy a new phone. You know what that means.

Yeah. DO NOT UPGRADE TO IOS 13 NO MATTER WHAT

 

[I7guy]

The drastic decrease in sales which resulted in Apple hiding unit sales and the forecast going down from 93 to 84. Apple hiding the sales due to a decline is confirmed.

What drastic decrease? Apple didn't go anywhere, guidance is guidance. Their prediction was wrong. They didn't make their guidance.

https://www.wired.com/story/how-to-stop-apple-throttling-iphones/

User controlled power management?

You cited nothing but clickbait blog articles. Lets match the circumstances for proper comparisons

Were multiple lawsuits filed for random shutdowns?
Was an investigation initiated in multiple countries for shutting down phones to increase sales?
Were the shutdowns addressed and a public apology letter issued which later resulted in an even bigger decline in sales?

The official response is the opposite

https://www.cultofmac.com/521005/samsung-lg-dont-throttle-phones-like-apple/

"“Never have, never will! We care what our customers think.” said Samsung in a statement to The Verge. “We do not reduce CPU performance through software updates over the lifecycles of the phone.”"

The articles are only clickbait, in your (subjective) opinion because they don't support a narrative of planned obsolescence. These "clickbait" articles show android phones just shutdown with marginal batteries. There's no way around that "fact". As far as suits, it's much easier to file a suit than to win one.

Samsung is an even bigger manufacturer than Apple. If they were shutting down as you claim, the lawyers worldwide would be all over it by now. No one says no to a pile of cash. Do you have anything more concrete than forum links and blogs?

In the mean time

https://forums.imore.com/iphone-se/383776-iphone-se-unexpected-shutdown-issue.html
https://forums.imore.com/iphone-xs-max/407444-iphone-xs-max-random-shut-off.html
https://discussions.apple.com/thread/8564528
https://discussions.apple.com/thread/8181554

So this means even iPhones are randomly shutting down!

I don't claim android phones are shutting down. The internet is claiming that and I can cite links where this is happening. Only you seem to be saying apple is the only manufacturer with bad batteries (note 7, remember them?).

Tim Cook flat out said battery upgrades slowed iPhone sales. This means prior to this they were increasing sales. You are literally contradicting Tim's own words

No he said it may be a contributing factor, which is different than being the sole reason. Apple doing the right thing has imo, upped the ante for customer service and customer longevity in the long run.

Which is probably why battery upgrades have slowed sales right?

No, as I mentioned above.

And the sites the guy was citing were estimates

You were claiming they were my numbers, which was flat out incorrect.

Yeah. DO NOT UPGRADE TO IOS 13 NO MATTER WHAT

I'll be first in line for the update.
[doublepost=1546707457][/doublepost]

The slow decline of Apple has begun. They will never "beat" estimates again, not for years at this rate. The phones designs have been flops - the computers haven't been refreshed in years - the product line has been completely fragmented and not in a beneficial or intelligent way. The culture of Apple *IS* disappearing.

Stop focusing on the money. Yes, they are a profitable company. So was RIM, so was Nokia, so was Microsoft with the RAZR.

It doesn't matter when you start losing consumer confidence and brand image. ANY major competitor emerges in a slight downslide like this, and it could totally snowball effect and lead to a rapid decline of sales and interest.

FIRE TIM COOK! Apple needs real vision again, before it is too late.

I'll bet for apple every day, over a post like this.

 

[john123]

It is not a conspiracy. The "large number of people needed" amounts to Apple's employees in stores, following management's instructions and refusing to replace a battery on your iPhone even while you were willing to pay the replacement. And again, I'm not talking about software releases. Just used old batteries no more working as expected while the rest of the phone is doing well. 29 dollars or 69 or 89....quite different than buying a new iPhone. From a customer's point of view that does'n sound good. Maybe an AAPL stockholder was happy with that.

That's not what we were talking about though. You responded to my response to @rafark in which he said:

With that in mind, Apple has the power to make your device slow so that you get a new one. Some people may complain, others may leave the plattform, but most would just buy a new phone and forget about it.

Whether we use the word "conspiracy" or not—that's just semantics. The point is that Apple didn't make this design decision regarding batteries to fuel sales. That's all. Everything else—pricing, perceptions, etc.—is a quite separate issue.

 

[MyMacintosh]

Seeing this trending on Twitter this morning

https://www.nytimes.com/2019/01/05/technology/apple-iphone-replacement-mom.html