Apple's Q4 2023 Earnings Call Takeaways

[Surf Monkey]

You'll likely hear crickets on that. Or some hand-waving obfuscation about how design is structured at Apple (despite having zero demonstrable inside knowledge).

It's kind of like the hackneyed and tired (and apparently crowd-pleasing) whine "Apple doesn't innovate anymore." Yet when asked for a handful of innovation suggestions it's crickets again. Or maybe something lame, and hardly innovative, like simply porting MacOS to iPad, which Apple considered and rejected long ago.

In the end it's Apple's roughly 1 Billion active customers, many repeat, that speaks to Apple's massive success and with that, the ability to innovate (causing customers to keep purchasing Apple products - year after year after year). That massive success apparently irritates some people - which is pretty silly. And also speaks volumes.

Quite a lot of straw men there.

As to innovation? Let’s take one example: Apple Home. Apple is in a position to revolutionize the smart home. It’s a classic example of the kind of market Apple targets. Lots of companies making lots of devices that maybe work together and maybe don’t accompanied by a load of different applications to control them that have inconsistent and often user hostile interfaces.

The range of smart home devices that Apple could be developing is wide and deep. The demise of the AirPort basically signals that they have zero interest in it though.

And Home is only one of MANY areas Apple could be innovating. Look for another example at the market for high end audiophile players. Astell & Kern, Luxury and Precision, Cayin and a dozen others are doing really interesting things with what basically amounts to a modern day iPod. These devices blow the iPhone away many key respects.

So let’s not pretend that Apple’s success for their share holders equates to success for their users. Raking in billions of dollars speaks more to their marketing than it does to their leadership in the innovation space.

 

[lysingur]

And you have no available plugs in your house? I guess your TV runs on battery power too? I mean, sure, the two hour battery life might pose a problem when I’m camping…but sitting at home on the couch? Is that really the best you can do? I’m skeptical about Vision Pro, but two hour battery life for a product that’s mostly designed to be used indoors where wired power is readily available…that’s the least of my concerns.

Yes, we'll know how much people like to have a cable running down their neck when they're wearing an AR/VR headset doing spreadsheets or God forbid, playing an FPS.

 

[lysingur]

Lol. I love random business know it all’s on fan forums. Cook sucks….but you seem to have all the answers. Maybe Apple will hire you to take over when he’s ousted and you can show us how easy it is!

If Steve Ballmer can run Microsoft, I don't think I will be too bad at running Apple. And I never said, "Cook sucks". I said he's running out of ideas and we should get someone with a fresh perspective in there.

 

[lysingur]

I'm a dyed-in-the-wool Apple fan, but even I'm feeling fatigued. I think Apple cares more about shareholders and about margins, and are too aggressive on pricing and increasingly sneaky about specs and value. Look at how the new MacBook Pro looks cheaper, but is also under-specced. Look at how 8GB RAM predominates, STILL.

Putting up prices on services like iCloud. Did they really need to go from 79p to 99p when the price of a basic iCloud account is nominal anyway? It's just to get people to register their credit card with iCloud, the 79p was nominal. It didn't need to be raised. OK, so this isn't a massive leap in cost, but it's symbolic of a great and substantial greed, a falling out of love with its customers who are increasingly just a locked-in cash-cow.

Cook has increased the value of Apple way beyond what Jobs had time to deliver, but now we're losing the soul, the heart. At the end of every keynote, Cook apes the Jobs line about Apple being at the confluence of technology and the arts. Jobs meant it, meant it from his soul: Cook is just ticking boxes.

Fortunately, he retires in 2025 or perhaps 2028, the 30th anniversary of his joining Apple.

I keep my fingers crossed about his retirement. He probably won't go away quietly. He's the only carryover left from the Jobs era and one of the oldest executives in Big Tech. He's done all he could as a logistics guy. If he wanted to go, he would've been gone long ago.

 

[citysnaps]

So let’s not pretend that Apple’s success for their share holders equates to success for their users. Raking in billions of dollars speaks more to their marketing than it does to their leadership in the innovation space.

Too funny. Apple's massive success is due to Apple users, roughy 1 Billion of them, who vote with and open their wallets and continually purchase Apple products. It's as simple as that.

The range of smart home devices that Apple could be developing is wide and deep. The demise of the AirPort basically signals that they have zero interest in it though.

Yep, no interest. That market is saturated with many low cost solutions that work very well. It would be a distraction for Apple competing with them, and not worth the effort.

Astell & Kern, Luxury and Precision, Cayin and a dozen others are doing really interesting things with what basically amounts to a modern day iPod.

That market is small and already well-served. It's a niche. If Apple could manufacture and sell (with decent margins) 600,000 units a day as they do with iPhone, that would be different.

None of what you mentioned above is innovation.

 

[montuori]

But, as an average consumer it increasingly feels like there's few things on the software side to actually take advantage of the power.

There's nothing to disagree with here but I would like to offer a different perspective: as a unix, MacOS is really solid. Maybe not glitzy but well performing, generally secure, and stable; Docker runs well, pretty much any Linux utility is available, code compiles fast, installation and administration is trivial, and it has a decent UI. Add to that AppleScript integration, which is often overlooked (AppleScript being an ... interesting ... language doesn't help) is surprisingly useful. Further, it's possible to do a ton of work on the supposedly underpowered entry level Macs. I have to believe there's not a small amount of software optimization to pull it off.

So not an appeal to the average consumer, as you say. Though I find it fascinating that a laptop can be cheap enough to not feel like overkill for email + surfing crowd and still be an impressive unix dev machine all on the same OS. (Let's just say that laptops running Solaris or AIX back in the 90s were not cheap!)

 

[Surf Monkey]

Too funny. Apple's massive success is due to Apple users, roughy 1 Billion of them, who vote with and open their wallets and continually purchase Apple products. It's as simple as that.

I appreciate the appeal of seemingly easy answers like that. But it’s not the supreme data point you think it is. Plenty of exceptionally bland products move gigantic numbers of units and make their parent companies loads of money.

Yep, no interest. That market is saturated with many low cost solutions that work very well. It would be a distraction for Apple competing with them, and not worth the effort.

Whether or not you personally have interest in it or are unable to see how chaotic the smart home space is couldn’t be further from the point.

That market is small and already well-served. It's a niche. If Apple could manufacture and sell (with decent margins) 600,000 units a day as they do with iPhone, that would be different.

Again, completely beside the point. Number of units sold isn’t what I’m talking about. Deflecting into it over and over again doesn’t bolster your point.

None of what you mentioned above is innovation.

Because you say so? It’s easy to just say “no it isn’t” without really considering the point under discussion at all, so…

 

[cutlub]

You'll likely hear crickets on that. Or some hand-waving obfuscation about how design is structured at Apple (despite having zero demonstrable inside knowledge).

It's kind of like the hackneyed and tired (and apparently crowd-pleasing) whine "Apple doesn't innovate anymore." Yet when asked for a handful of innovation suggestions it's crickets again. Or maybe something lame, and hardly innovative, like simply porting MacOS to iPad, which Apple considered and rejected long ago.

In the end it's Apple's roughly 1 Billion active customers, many repeat, that speaks to Apple's massive success and with that, the ability to innovate (causing customers to keep purchasing Apple products - year after year after year). That massive success apparently irritates some people - which is pretty silly. And also speaks volumes.

Thank you so much for this. It’s baffling that the people that hate Apple the most are on MacRumors. Honestly, what’s keeping them here? Sell your Mac, iPhone, iPad, whatever you think isn’t innovative and buy it from someone you think is. Oh, and trust.

 

[Surf Monkey]

Thank you so much for this. It’s baffling that the people that hate Apple the most are on MacRumors. Honestly, what’s keeping them here? Sell your Mac, iPhone, iPad, whatever you think isn’t innovative and buy it from someone you think is. Oh, and trust.

“Hate Apple”

That’s always the refrain. But no one has expressed hate towards Apple. I’ve been using Apple products professionally and personally since the early 1990s. I’m a fan. That’s why I’m here.

There’s a difference between opinion/reasonable criticism and hate. Hate is a strong word and I for one have not applied it in reference to Apple.

 

[Abazigal]

Cook has increased the value of Apple way beyond what Jobs had time to deliver, but now we're losing the soul, the heart. At the end of every keynote, Cook apes the Jobs line about Apple being at the confluence of technology and the arts. Jobs meant it, meant it from his soul: Cook is just ticking boxes.

Fortunately, he retires in 2025 or perhaps 2028, the 30th anniversary of his joining Apple.

I would argue that whoever Tim Cook’s successor is should ideally come from a supply chain background as well. At this stage, Apple’s biggest challenge is how to manufacture and ship their products at scale.

Regardless of whoever takes over, I doubt much will change at Apple. Those hoping that Apple will somehow return to their original roots (whatever that means) will be disappointed.

 

[Ulfric]

There has been no big innovation on iPads except for the release of 2018 iPad Pros, the Air 4, Apple Pencil and Magic Keyboard.

For most people, they do 99 percent of what most iPad buying people want.

M1, M2… what’s the point of these in iPad if the OS is the same as a decade ago in terms of what it can do.

If you are using procreate or Zbrush on your ipad, sometimes that extra power helps. It's not enough to finish your AAA assets or your final concept piece that you will submit to your art director, but then conceptualization part is 50% of any asset developer's pipeline. You can be flexible for that period of time by using iPad it's a lot.


You still need to give it a final touch on Photoshop or the sculpts you are making on ipad needs to be retopologised & texture painted & for that you still need to bring your work on Desktop ( Laptop has no problem other than too small screen, keyboard not having numpad, not many ports to attach your display tablets like Wacom, Huion)

 

[d686546s]

There's nothing to disagree with here but I would like to offer a different perspective: as a unix, MacOS is really solid. Maybe not glitzy but well performing, generally secure, and stable; Docker runs well, pretty much any Linux utility is available, code compiles fast, installation and administration is trivial, and it has a decent UI. Add to that AppleScript integration, which is often overlooked (AppleScript being an ... interesting ... language doesn't help) is surprisingly useful. Further, it's possible to do a ton of work on the supposedly underpowered entry level Macs. I have to believe there's not a small amount of software optimization to pull it off.

So not an appeal to the average consumer, as you say. Though I find it fascinating that a laptop can be cheap enough to not feel like overkill for email + surfing crowd and still be an impressive unix dev machine all on the same OS. (Let's just say that laptops running Solaris or AIX back in the 90s were not cheap!)

That's an entirely fair point! I'm not a developer or creative. I spend most of my days putting together relatively simple documents or slides and do some data analysis, although nothing too complicated. I spend way too much time in meetings, both in person and virtual ones. And I read lots of material.

I wouldn't mind a MBA for its battery life, but I don't think it would make me more productive than the Surface book my employer gave me.

What would be really fantastic would be an iPad/Mac hybrid that works with an external screen(s) like a regular computer, but also allows me to take handwritten notes by hand, or annotate documents by hand with good handwriting recognition. Something to bridge the gap between working digital and analogue for the 95% of us who don't do design work.

In fairness, no one has really come up with anything useful that isn't a bog standard laptop or a gimped tablet. It's the sort of thing that has Apple written all over it, but I genuinely think that they are by now too cautious not to let one of their products cannibalise another, which is solid business as long as it works, but also kind of boring.

 

[chucker23n1]

The demise of the AirPort basically signals that they have zero interest in it though.

The home is mostly a race-to-the-bottom market. Smart home devices are already absurdly costly compared to what you get in a DIY store, and Apple would only ask an even higher price tag. What, you expect them to make a $5 light bulb or $2 power socket? It's just not an interesting market for them, with few exceptions like speakers.

 

[Surf Monkey]

The home is mostly a race-to-the-bottom market. Smart home devices are already absurdly costly compared to what you get in a DIY store, and Apple would only ask an even higher price tag. What, you expect them to make a $5 light bulb or $2 power socket? It's just not an interesting market for them, with few exceptions like speakers.

First, it’s just an example.

Second, the smart home extends well beyond lightbulbs and plugs now. There are opportunities for Apple to innovate in that space. But lacking control of the wi-fi router…

 

[Steve Ballmer]

I feel the same. Was also wondering if it's just age. On the other hand I think technology fatigue is real and not necessarily generational.

Apple is running into the same issues that all other tech companies are running into. Stable, mature markets. There is nothing exciting about smartphones anymore. And that's fine, that's frankly a good thing. It means all the low-hanging fruit has been harvested. It means all the important issues that need to be addressed have. But it does make it less and less exciting. How many people honestly cared about the iPhone 15? It looks and works a lot like the iPhone 14, which looked and worked a lot like the iPhone 13, and so on. Same thing happened with macOS 10. Cheetah, Puma, Jaguar, Panther were all exciting. By the time we hit Leopard and onward, it was less exciting. Fewer major new features, more iterative improvements.

I'd say age does play a role. But it's really just smartphones aren't exciting. They are a tool, a commodity, very few people are excited about them anymore because there's no need to. It's like that gigantic cultural impact Windows 95 had. Then Windows 98 came along and no one really cared, because it was an improvement upon the previous release, making it better, but less exciting.

 

[Steve Ballmer]

We see how their design division is structured now. They design by committee. There is no single visionary behind the overall direction of the software or hardware. That’s a problem.

You didn't answer the question. They asked you to suggest a "top flight designer" that could innovate Apple's designs, that you alluded was lacking from Apple. Who is that person and why aren't they working for Apple?

 

[Abazigal]

Quite a lot of straw men there.

As to innovation? Let’s take one example: Apple Home. Apple is in a position to revolutionize the smart home. It’s a classic example of the kind of market Apple targets. Lots of companies making lots of devices that maybe work together and maybe don’t accompanied by a load of different applications to control them that have inconsistent and often user hostile interfaces.

The range of smart home devices that Apple could be developing is wide and deep. The demise of the AirPort basically signals that they have zero interest in it though.

And Home is only one of MANY areas Apple could be innovating. Look for another example at the market for high end audiophile players. Astell & Kern, Luxury and Precision, Cayin and a dozen others are doing really interesting things with what basically amounts to a modern day iPod. These devices blow the iPhone away many key respects.

So let’s not pretend that Apple’s success for their share holders equates to success for their users. Raking in billions of dollars speaks more to their marketing than it does to their leadership in the innovation space.

I think we have to be clear that you are attempting to conflate 2 separate arguments here.

1) Apple is under no obligation to do whatever it is you want them to do. I get that sometimes, it feels like Apple is expected to be everything to everyone because of the whole "I bought into their ecosystem" argument, but Apple is ultimately just one company. You cannot realistically expect them to provide the same breadth of products as every other tech company in the world combined.

I believe Apple realises this as well, and so they are being very disciplined and intentional about what products they do release, and what areas they will not participate in.

2) Just because Apple isn't doing whatever I want them to do does not mean they are no longer innovating. It just means they aren't doing whatever I want them to do, and that's fine, because the company (and the world) does not just revolve around me and me alone. For example, I own a switch because Apple has no gaming console, and that's perfectly okay. Nor do I think any less of Apple just because they don't have their own line of smart home accessories that I could easily shop from Ikea.

The reason why Apple is raking in billions is precisely because they are aware of their core competency - creating an ecosystem around their products. Apple's definition of innovation is not to push things out when they are not ready, just so they can say they are trying to be innovative. Apple's approach is to let things bake in the oven a little longer, which can seem boring to some people, but judging by their financial success, I dare say that the majority of their users appreciate a stable and cohesive user experience that "just works" over being beta testers for unproven technology.

As the saying goes - Rome was not built in a day.

 

[Surf Monkey]

You didn't answer the question. They asked you to suggest a "top flight designer" that could innovate Apple's designs, that you alluded was lacking from Apple. Who is that person and why aren't they working for Apple?

I responded to that. But since you asked, some of these candidates would suit the bill:

Top 30 Famous Industrial Designers & Product Developers Worldwide | Cad Crowd

In this article, we are looking at the top 30 famous industrial designers & product developers in the world. Finding world-class industrial designers and design engineers has always been a challenge for product innovators. Unlike many commoditized industries, creating a successful new product...

www.cadcrowd.com

 

[Surf Monkey]

I think we have to be clear that you are attempting to conflate 2 separate arguments here.

1) Apple is under no obligation to do whatever it is you want them to do. I get that sometimes, it feels like Apple is expected to be everything to everyone because of the whole "I bought into their ecosystem" argument, but Apple is ultimately just one company. You cannot realistically expect them to provide the same breadth of products as every other tech company in the world combined.

I believe Apple realises this as well, and so they are being very disciplined and intentional about what products they do release, and what areas they will not participate in.

2) Just because Apple isn't doing whatever I want them to do does not mean they are no longer innovating. It just means they aren't doing whatever I want them to do, and that's fine, because the company (and the world) does not just revolve around me and me alone. For example, I own a switch because Apple has no gaming console, and that's perfectly okay. Nor do I think any less of Apple just because they don't have their own line of smart home accessories that I could easily shop from Ikea.

The reason why Apple is raking in billions is precisely because they are aware of their core competency - creating an ecosystem around their products. Apple's definition of innovation is not to push things out when they are not ready, just so they can say they are trying to be innovative. Apple's approach is to let things bake in the oven a little longer, which can seem boring to some people, but judging by their financial success, I dare say that the majority of their users appreciate a stable and cohesive user experience that "just works" over being beta testers for unproven technology.

As the saying goes - Rome was not built in a day.

Rationalizations are fine, but don’t actually prove anything.

 

[Steve Ballmer]

I responded to that. But since you asked, some of these candidates would suit the bill:

Top 30 Famous Industrial Designers & Product Developers Worldwide | Cad Crowd

In this article, we are looking at the top 30 famous industrial designers & product developers in the world. Finding world-class industrial designers and design engineers has always been a challenge for product innovators. Unlike many commoditized industries, creating a successful new product...

www.cadcrowd.com

Apple should hire them. That would solve their design issues.

 

[Surf Monkey]

Apple should hire them. That would solve their design issues.

Not my position and not even a good joke.

 

[Steve Ballmer]

Not my position and not even a good joke.

Where did I say it was your position, or that it was a joke? I believe that Apple should hire them. Because I believe Apple has design issues. I believe Apple has a serious issue of lacking top flight designers, and hiring even just one of them could help improve their products.

 

[Abazigal]

Rationalizations are fine, but don’t actually prove anything.

I wasn't attempting to rationalise anything.

While Apple sails forward with a strengthening ecosystem made possible by a clear product vision and a functioning organizational structure that prioritizes design (i.e. the user experience), the competition is rudderless. They strike out with bad bets like smart speakers, folding phones and round smartwatches, yet these are being held up and paraded as examples of innovation simply because Apple isn't doing them.

I just feel that it's about time we started explaining Apple's success, not explaining it away. Apple has built up an impressive ecosystem of hardware, software and services, and the best counter you have for their success is "good marketing"?!?

 

[Surf Monkey]

I wasn't attempting to rationalise anything.

While Apple sails forward with a strengthening ecosystem made possible by a clear product vision and a functioning organizational structure that prioritizes design (i.e. the user experience), the competition is rudderless. They strike out with bad bets like smart speakers, folding phones and round smartwatches, yet these are being held up and paraded as examples of innovation simply because Apple isn't doing them.

I just feel that it's about time we started explaining Apple's success, not explaining it away. Apple has built up an impressive ecosystem of hardware, software and services, and the best counter you have for their success is "good marketing"?!?

Rah rah.

Not everyone shares your starry outlook on Apple. Some of us see clear stagnation and a lack of serious focus on innovation.

 

[Surf Monkey]

Where did I say it was your position, or that it was a joke? I believe that Apple should hire them. Because I believe Apple has design issues. I believe Apple has a serious issue of lacking top flight designers, and hiring even just one of them could help improve their products.

Okay. If it was a sincere comment I retract my snippy reply.