Apple's Profit Downturn and Negative Customer Opinions Threaten 'Decade-Long Malaise' for Company

[Bakeev]

Analysts at financial firm Oppenheimer today added to the pile of criticisms aimed at Apple and its current, and future, state of innovation within the technology industry. In a recently published note (via Business Insider), the firm addressed a few "strategic issues" it currently has with Apple, as well as concern for the future trajectory of the company.

In the near-future, Oppenheimer believes that iPhone sales will peak, specifically in 2018, and that "the company lacks the ability to raise prices across its iPhones, iPads and Mac products," which is hurting its growth. The firm also described a disharmony between "Apple's primary role as 'the hardware platform' ... with its secondary role as 'the software and service provider.'"

While the "Apple is doomed" mindset has been prevalent for much of the company's lifespan, the "universe of negativity" surrounding the company became more noticeable throughout 2016. In April, Apple reported its first year-over-year decline in iPhone sales and quarterly revenue since 2003, and although initial shipments of the new Touch Bar MacBook Pro models were reported as strong, subsequent user experiences have largely varied between positive and negative opinions.

In October, Apple forecasted a retur to growth for the last half of 2016 thanks to the holiday shopping season, potentially putting an end to the company's downturn after its first annual revenue decline since 2001 and three consecutive quarters of negative growth. The constant bright spots in Apple's revenue remain its services category, including the App Store, iCloud, and Apple Music.


Article Link: Apple's Profit Downturn and Negative Customer Opinions Threaten 'Decade-Long Malaise' for Company

 

[sbuttler77]

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[gugy]

My main concern with Apple is that they are becoming greedy and all they think about is profits. Yes companies are supposed to make money but my point is Apple is alienating a huge segment like professionals and people who does really need computers. Yes I am talking about the Mac. Their current offerings are too expensive, cripple and while beautiful are not very functional (Dongles anyone?). Their disregard for the MacPro, Mini, iMac, Displays, etc are criminal.
Steve is sorely missing on this equation. The Apple executive boys club are enjoying their millions and just getting fat while becoming very out of touch. I honestly don't see anyone right now that can help Apple go in the right path and innovate.

 

[deany]

The other major problem is their Key Notes

I just dont trust what they say anymore Phil Schiller comes across like a second hand car salesman.

The best person for product launches is Tim, why?

• he comes across as EXTREMELY trustworthy

• Tim is the Steve Jobs of apple but he isn't doing what Steve did at keynotes, Tim just introduces and passes it on to amateurish sales people.

 

[Bakeev]

**** Tim Cook. He is good for nothing. He want to sell only iphones, not improving them at the same time. Three years in row we have the same phone. Even worse. And all the products he changes or starts all of them totally sucks. Apple watch is useless and expensive piece of crap. Macbook pro 2016 is unrepairable expensive ****. ****, we need adapters to connect two different products of new line of products, iPhone 7 and macbook 2016? Is it really happening? They killed apple routers, why, they were so convinient. Tim Cook kills the company on daily basis and the end of great era of apple is nearer and nearer with every new prrsentation of new Apple's crappy products

 

[deany]

**** Tim Cook. He is good for nothing. He want to sell only iphones, not improving them at the same time. Three years in row we have the same phone. Even worse. And what products he changes or starts it totally sucks. Apple watch is useless and expensive piece of crap. Macbook pro 2016 is unrepairable expensive sheet. ****, we need dongles to connect two different products

Well considering you only joined MR today and its your 2nd post can we assume you are shorting AAPL stock.

 

[swajames]

In the past, that Apple believed it knew best resulted in some truly innovative and groundbreaking products.

Now, that belief is turning into hubris which if left unchecked could trigger a slow slide into mediocrity.

The Apple of today isn't the Apple that created the brand loyalty it is still able to leverage, and if we see more of what we've seen over the last year or two that will wane too.

 

[Bakeev]

Well considering you only joined MR today and its your 2nd post can we assume you are shorting AAPL stock.

I would if i had any

 

[Bryan Bowler]

I know where you're coming from, as I lightened my load a year ago, but I'm looking to load back up. Why? iPhone 8. What other company is this cheap, has a superior brand, pays dividends and has a catalyst right around the corner?

I agree with you. The glory days for the stock are not quite over yet, but I have a very substantial investment in Apple. (Humbly spoken and not in a bragging way.) Long term, I feel like Apple is heading in the wrong direction and it will affect their stock price substantially at least a few years from now. If I were to sit completely still now and then try to unload all of my stock at once, I would wildly exceed the 38% tax bracket and then have to pay a 20% long-term capital tax on my gains. So, I'm pacing myself with selling off the stock now so I can ensure that I only pay 15% on those capital gains.

One could argue that I could be missing out on even more growth with the stock I'm selling each year, but I don't even let the "could of should of's" even enter my mind. One can never do that in business and stay sane. One just needs to commit to sound investment principles and really think things through on the tax side of the house. And hey, I must admit, it's been one hell of a run with AAPL for the last 10 years!

Cheers and I hope you are richly rewarded for your investment!

 

[mso4]

Interesting to be greeted by this article. I was loading up this site, as I've done everything morning your years now. Just habit I guess -

And I was thinking to myself - why am I doing this ? - just to see yet more evidence of how current mgmt has further weakened the past strengths of the company? It's like being hooked on a bad soap opera ...

After 15 years of being an Apple fan, I can honestly say this is the first time I'm contemplating buying an non-Apple computer as my next purchase. This thought has never cross my mind until this year. If I were to buy an Apple product now it would most likely be a 2015 MBP. I still have an iPhone 6 and I usually upgrade EVERY YEAR since my first iPhone years ago. But then again if you look back this is how great companies go down. Think Microsoft, Nokia, Dell, Motorola, etc. Nothing great lasts forever, live with it.

 

[gugy]

I've been brand loyal to Apple since 1988.

tl;dr I'm happy with all my Apple products, but I've lost my upgrading obsession -- either because of increased price, or non-availability, or insufficient excitement about new products. Apple needs to sort its supply out, manage customer expectations better, and give much, much, much better keynotes.

I currently own

1. iMac -- one year old. Nothing to upgrade to, and nor would I want to. It's terrific. Though it was astonishing that the base model still had a spinning hard drive. Then there's the ridiculous fusion drive. I bought the one with a flash drive. It's 2016. And Apple is supposed to be a premium brand.

2. MacBook Pro (early 2015) -- one year old. Thanks in part to Brexit and the huge increases in pricing I can't justify upgrading it. Even if the new MacBooks were cheaper, it's not clear that a new keyboard (mixed reviews) and oversized trackpad are really worth upgrading to. The Touch Bar? Too early to tell. I'm sitting this one out.

3. iPad Pro 12.9 -- one year old. Nothing to upgrade to. It would be nice if it had 3D touch. But it's a pretty sweet device. Use it every day. Love it. Initial supply problems of Apple Pencil were embarrassing and didn't smack of competent leadership.

4. iPhone 7 -- couple of months old. Traded down from a 6S+ because I wanted the smaller size. Stunningly beautiful thing. Screen is phenomenal. Makes me smile every time I used it. Superb. Couldn't care less about 3.5mm port. Non existence of AirPods is embarrassing and incompetent. 6S+ was a replacement for a 6+ that got the flickering screen cancer. Zero support from Apple. Hugely unimpressed.

5. Apple Watch S0 -- 18 months old. Very happy with it, but have no desire to upgrade. For me it's basically a watch -- quite like the notifications and fitness. Will replace when it dies but not before.

6. Airport Extreme -- one year old. Solved all my home wifi problems. Why on earth are they giving up on it?

Wow, I am on the same position. I really have hard time justifying upgrading my current hardware with the offers Apple have now.
I currently have: MBP 2015 15" and 13", MacPro 12 core 2011, Apple Watch 2, Airport Time Capsule, two 30" ACDs. iPhone 5S and iPad Pro 12.9.

I was looking into the new MBP and hoping for a new MacPro, displays and Mac Mini. Apple IMO fail delivering all of this.
The current 2016 MBP is supposed to have a worse performance than the 2015 MBP on Photoshop according to:
https://macperformanceguide.com

Now, the only thing I really want to update is my iPhone, but it works fine but just slow. I am waiting and waiting. Apple could have my money and at least close to $10k of it this year but in the meantime they just got $400 for my AW2.
I am sure we are not alone. Apple is missing big time for their disregard to the Mac line.

 

[SebastianFQR]

"They forget what it means to make great products..." - Jobs.

Dongles don't make for great products.

Removing universal standards like the audio jack doesn't make for great products.

Soldering ram and hard drives onto motherboards to shorten machine lifespans doesn't make for great products.

Leaving product lines in limbo for years doesn't make for great products.

Killing much loved product lines with devoted followings doesn't make for great products.

There have always been naysayers within the Apple ecosystem. What gives them special credibility now is the diminishment and rot of that ecosystem.

 

[JGIGS]

Tim has turned Apple into a phone company and fails developing new products.It has also failed the pro market. The moto is just think thin.

A phone company that isn't doing enough to innovate it's phone and especially phone software. Sounds like trouble to me. Hope iphone 8 is a game changer and ios 11 has some smart changes.

 

[gugy]

This speaks volumes about the current state of Apple:

https://macperformanceguide.com/blog/2016/20161201_1012-Apple2016MacBookPro-going-back.html

I’ve made my decision. The 2016 MacBook Pro is very nice for anyone who does not own a reasonably recent MacBook Pro Retina, but for me (Lloyd) the value proposition is just not there—it is a travel machine only (6 weeks or so a year), and it’s no faster than my 2013 MacBook Profor what I do. The value proposition is just not there. I’d rather wait a year for a model that has more features, or at least 32GB of memory and/or a faster CPU and GPU.

This is the first and only Mac I’ve purchased with the intent to keep and use and then returned. Which speaks volumes about Apple’s priorities in hardware development. The 2016 MacBook Pro is an excellent machine, superior to the 2013/2014/2015 models in most all way, and were I buying a laptop for the first time or replacing a far older one, I would be delighted. But it just does not offer meaningful value for me vs the 2013 MacBook Pro I already own.

I’ll finish up various tests before it goes away in the FedEx truck on Monday.

 

[truthertech]

Nokia, Palm, Ericsson and many others also relied on ONE product. Didn't seem possible at that time
that those huge companies would be gone in such a shot time. But guess what? They are gone
and nobody today knows what Palm was...

That's the point, though, Apple is far from a one trick pony. The "click-bait" editorial by the analysts was written to attract attention. In reality, like all companies, Apple has had some misses, but Apple is kicking it in many areas.

1) Their services is growing so fast, one of the major analytical errors in their editorial, that Apple earned more in just services than all of Facebook's revenue combined, and in 2017 will grow so large as to be the equivalent of a Fortune 100 company all by itself.

2) Apple Pay went from scratch to blow past Samsung and Google and all other competitors to take 75% of the US market in just a year.

3) Apple started from scratch in music streaming to zoom past every competitor, including huge companies like Samsung and Google, to the number 2 spot and number 1 in customer satisfaction.

3) Apple's headphones' growth is doing so well that they now are the largest seller of both wired and wireless headphones in the world, including owning over 60% of the worldwide market for premium headphones.

4) Apple's latest laptops have set sales records.

5) The iPad increased its world leading market share of all tablets in 2016 to 22% and grew it's share of the premium market to 82%.

I could go on and on, but you get the point: #Appleisdoomed

 

[hagar]

If iCloud is the bright spot of Apple, they really are doomed. While it had improved a lot over the years it's still a mess for average consumers who don't understand the cloud.

And it's slow as hell.

 

[Digital Dude]

Up until now, I've been rather conservative with my criticism against upper management at Apple. However, this particular article leaves little doubt as to the company's future. After more than 32 years I am well aware of the 'sky is falling' analogy. Since the rollout of the so-called 'MacBook Pro' for 2016, I knew that something bad was occurring with Apple. Within just a few weeks we have now learned of Apple's decision to drop their formidable networking products. Both decisions follow the trend of watering down, not only their entire product line, but also the elimination of products that Apple customers have really embraced!

Quite simply, T.C. and P.S. are destroying the company. It's not just a few here on MacRumors that feel this way; I hear the same sentiment from my contacts in Italy. I just purchased a whole new set of Apple products, but for the first time in decades, I feel this may be the last time unless the Board of Directors can grow a set of testicles and gets rid of these underachievers.

 

[alexgowers]

The problem with apple is we are caught between two terrible choices right now. Windows is worse than google for data mining and sub par hardware integration and apple's it's our way or the highway approach.

I can't recommend windows but neither can i recommend macOS.

For me apple is failing to deliver products that work without extra services that also require payment. That is unforgivable in my eyes. iCloud, apple music, applecare etc it all just undermines apple products. If i buy an iPhone with 256GB storage i don't want to see a storage alert for online space after 5gb, i want that included and to never be an issue.

Apple took a system that wasn't broken like photos and broke it because of profits, trying to sell services.

The iPhone line ignored that they had massive bezels compared to competitors. The list of things they are getting wrong now seems so long it's hard to see them breaking their habits. Rather than the nimble upstart they have become a giant lumbering giant not able to swiftly adapt.

I do hope we can eventually see the other side of this but there is a culture ingrained so deep inside the company it's hard to imagine they could move towards a solution.

If I were tim cook, i would be panicking right now wondering how it all got out of control. It's things like the ports on the macbook pro, the lack of headphone jack on the iPhone, the touchbar pushing up prices, discontinuing the airport wireless routers when they are wildly popular. It's not having a cheap apple tv, it's not updating the Mac Pro or the iMac or the mac mini and dumping on user who thought the company wasn't about to force them to adopt new standard after just trying ones before they claimed was the only port you needed (thunderbolt 1&2/firewire) It's dropping the SD, the HDMI or USBa. There are so many reasons apple around out of touch that should never have happened and they still have zero benefit so far to apple's bottom line. I'm bemused that such a successful company has acted this way and it seems like there is no end in sight. I want to love apple but they're making it incredibly difficult.

 

[snowboarder]

...as much as a willful dumbing down of the end user experience to the point where I no longer want to use the products. ... Sad.

+100

 

[deany]

I'm sure there is light, Tim has a cool head, the Mothership is probably taking too much of his time.

The sooner they move there and settle in the better. I'm certain things will improve from mid 2017.

But Tim needs a hard faced trouble shooter to do his dirty work for him, someone who relishes the dirty work.

 

[Bakeev]

A phone company that isn't doing enough to innovate it's phone and especially phone software. Sounds like trouble to me. Hope iphone 8 is a game changer and ios 11 has some smart changes.

Unfortunately itwon't a game changer, cause I don't know what they should to present to be a game changer. Apple won't even has enough oled displays for all models because they all made by sumsung

 

[skippermonkey]

I just hope someone at Apple is reading this – and all the other forums like it. Cook needs replacing with someone who gets it.

 

[GoldenJoe]

I'll say it again - watching Apple today is like watching RIM six years ago. CEOs that are completely out of touch, hardware that lags behind the competition on features, overconfidence in the existing ecosystem, you name it - RIM did it and Apple is doing it. God I hope someone better comes along to challenge Android. Android is the worst thing to ever happen to mobile.

 

[deany]

After 15 years of being an Apple fan, I can honestly say this is the first time I'm contemplating buying an non-Apple computer as my next purchase. This thought has never cross my mind until this year. If I were to buy an Apple product now it would most likely be a 2015 MBP. I still have an iPhone 6 and I usually upgrade EVERY YEAR since my first iPhone years ago. But then again if you look back this is how great companies go down. Think Microsoft, Nokia, Dell, Motorola, etc. Nothing great lasts forever, live with it.

I have the 13" rMBP 2015 500GB with Parallels
XP, W7 and W10 and a 24" Samsung I snagged recently for £276.99 https://www.amazon.co.uk/gp/product/B00WUACDIU/?tag=ho01f-21 all good. Plus as a laptop the apple logo lights up!

 

[Labeno]

This video is amazing and explains what's happening to Apple now.
More people need to publish this everywhere!!!

[/QUOTE]