What's Apple's business strategy?

Discussion in 'Apple, Inc and Tech Industry' started by Luba, Nov 21, 2016.

  1. Luba macrumors 6502a

    Luba

    Joined:
    Apr 22, 2009
    #1
    I thought it was to grow or at least maintain their ecosystem, but they recently abandoned the display business and Bloomberg says they will stop selling routers and Time Capsules. We all know they just designed all the previous displays and had perhaps LG or Samsung manufacture the display to their specs. Curious that Apple thought it wasn't worth the effort of designing the next generation display. If they thought selling the display would take too much Apple Store space, they could have sold it as online only. In any case, Apple Stores need displays to show off the Mac Pro or Mini which they are currently doing so using a 3rd party display. The routers they're still currently selling probably makes a profit but not a big one, but why consolidate the line up? Apple doesn't believe in the ecosystem anymore?

    The smartphone industry is maturing or already matured, so far the Apple Watch is a niche product, and Macs are in a mature industry, so what's Apple's next move? Just maintain what they have?

    They thought about the car industry, but then they abandoned it (for the time being?). And besides, correct me if I'm wrong, but isn't the profit margins in the auto industry rather small? Apple likes big profit margins.

    I sort of understand their decision to not continue with Aperture. I'm guessing they thought it would be too much overlap and effort to create two photo apps that worked with iCloud.

    Apple Pay and Apple Music look promising. Other than that it seems to me Apple with all their cash isn't being aggressive enough. They're actually being defensive shrinking their product line.

    Opinions? Feedback?
     
  2. ssgbryan macrumors 6502

    ssgbryan

    Joined:
    Jul 18, 2002
    #2
    Services.

    They are looking to get a monthly check, regardless of whether they deliver a product or not.

    I don't think they grasp that as they disassemble the ecosystem, the total value of each product diminishes.

    After all, once I have replaced my TC, desktop, laptop, and tablet, why keep the phone? It isn't like it is leaps and bounds ahead of everything else.
     
  3. Jim L, Nov 22, 2016
    Last edited: Nov 29, 2016

    Jim L macrumors regular

    Joined:
    Jul 16, 2011
    Location:
    The Piedmont, NC
    #3
    Exactly!

    Tim is not visionary or focused on innovation (although he gives it lip service).
    It's clear now that he's letting the MBA's and bean counters cull Apple's product line based on gross revenue or margin.

    I think there is something else going on too. They are morphing their product line to maximize future sales by shortening replacement cycles and moving customers to paying for 'services' which depend on the cloud.

    In a nutshell their business strategy is:
    1. Trim the product line to just the highest sales volume items
    2. Shorten replacement cycles by making products not consumer upgrade-able (glue, solder and lock down!) Further shorten the replacement cycles by giving products bare minimum of hardware specs (storage, memory & processor)
    3. Make entry level products low on memory/storage to force the up-sell when consumers replace
    4. Every 2-3 major OS versions introduce resource-hungry features to obsolete old hardware
    5. Migrate hardware (and consumer thinking) so that eventually all apps, data, media and user content require cloud (storage and services) so that we can lock them into paying for access on monthly basis (Brilliant!)
    What I'm seeing as a consumer is an eroding ecosystem that is becoming less and less 'sticky' and doesn't meet my needs. I also feel that Apple is pushing on me not what I want or need, but what maximizes their sales numbers.

    We'll know the impact after several more quarters, but I think Apple's decline due to the above strategy has not even begun to appear yet.
     
  4. RedOrchestra Suspended

    Joined:
    Aug 13, 2012
    #4
    Do whatever it takes to maintain their current profit margins ... either through spec elimination or price increases OR both.
     
  5. Nick11Mac macrumors 6502

    Nick11Mac

    Joined:
    Jan 20, 2011
    Location:
    Petaluma, CA
    #5
    These changes away from what made Apple so unique with desirable product are depressing. The comments above make reasoned sense. It would be safe to assume the end of an era of innovation and quality.
     
  6. theluggage macrumors 68030

    Joined:
    Jul 29, 2011
    #6
    I'm not sure the current Apple management "gets" the idea of an ecosystem. They've worked out that they can get a lot of orders this quarter by releasing a thinner, lighter, less functional version of last year's product... and if that drives away loyal customers then, so what, they can raise the prices to keep the revenue up.

    Apple's past designs (allowing them the occasional hockey-puck mouse lapse) were great examples of balancing form with function - and when they decided to dump a legacy feature, though it never pleased everybody, they were usually on the money*.

    Now, we get, whammo, bye-bye Magsafe, bye-bye HDMI, bye-bye SD, bye-bye USB-A, bye-bye SPDIF far before these things can reasonably called "legacy", pretty obviously just to meet the Prime Directive of "smaller is always better"... and in return we get, well, a slightly improved display***, this year's version of last year's CPU and GPU (minor incremental performance improvements that you won't notice without a stopwatch). Oh, yes, there's the incredible potential i/o bandwidth and multi-monitor support of 4xTB3, coupled with even faster SSDs, which will be totally irrelevant to most people leaving, well, exactly the sort of pro-graphics/audio/video users who also need 32GB RAM and a more bleeding-edge CPU & GPU (and who could possibly cope with finding a mains socket, unless all their other gear is running on sunlight). There's no balance to this design - its exactly what you get if someone designs the box first then the engineers struggle to fit in what features they can.

    Not to worry, though - if enough people will pay $3000 for a handbag to keep fashion houses in business, they'll pay $3000 for an ultrabook with a emoji-bar. That'll work for a few quarters, then they'll wonder why nobody is developing pro graphics apps, decent games or developer tools... but then, hey, all they need to do is knock out an XCode for Windows or Linux so that people can write iPhone apps (the Swift compiler is already done) and they can walk away from the Mac. Tim started the last launch by saying how important the Mac was to Apple** - that's the sort of thing that high-flying business types only say when they mean the exact opposite.

    I differ, slightly, on things like the networking kit and displays. In terms of networking, the Mac has come a long way in terms of interoperating with third-party kit in the last decade, and most other networking/NAS kit now "just works" with Mac, it doesn't even have to be AFP or HFS+-based (and Apple are actually depreciating AFP). Where I live, most people get a free or heavily-subsidised modem/router thrown in with their home broadband and the best strategy if you want support from your ISP is to stick with that unless you need something more tweakable (in which case you're probably not looking at Apple's routers, either). They've never really been "professional" products (beyond very-small-home office) and they lack what would have been the Unique Selling Point of acting as an always-on server for your iTunes media.

    As for displays... the display market is in a right mess at the moment thanks to Intel, AMD and NVIDIA messing around - Neither Intel's TB3, USB-C implementations or their iGPUs support DisplayPort 1.3 which is really needed for 5k+ and 4k@60Hz displays over single cables. There's also a snarl-up over rival standards for variable-sync-rate displays. Good time not to be making displays. I'll also be interested to see what the practicalities of "docking" anything more than a mouse and keyboard via a 5k display are: In theory, there's 10Gbps of free bandwidth left out of 40Gbps... but I've yet to see an interface that can deliver anything like its full theoretical bandwidth under a "mixed load".

    What the mythical "pro" user really wants, surely, is to be able to choose the size/style/aspect ratio/gamut/features that their application needs from a range of compatible third-party displays.

    (What I find interesting, though, is how the LG UltraFine displays show all the signs of being designed by Apple right up to the point where it was time to sign off on the nice machined aluminium case & fused front panel/display/webcam assembly... look at the lack of any other input beyond a single USB-C/TB3, the "only way is USB-C" output ports (when there is plenty of space for a couple of USB-As) - the placement of the ports (more or less where they are on the old TB Display/iMac) and the odd "forehead" (to house the webcam) that wouldn't show up so much - or could be much smaller - if the whole front was glass. C.F. with the 4k displays that LG already make. No proof there, but it is rather suggestive that, at one point, there was going to be an LG-made Apple display.)

    ...that said, we have to accept that the "maturing" of the Laptop/Desktop PC industry will have consequences. Not long ago, a manufacturer could sell you an "upgradeable" machine safe in the knowledge that 2 years down the line they'd have a new model that was twice as fast, had twice as much memory, twice as much storage, expansion slots with twice the bandwidth etc. to the extent that it made more sense to buy a brand new machine and keep the old one as a spare or hand-me-down. Now, progress is much, much slower and if Apple sold you a "proper" Mac Pro mini-tower with PCIe slots, upgradeable memory, swappable drives they'd be lucky to see you again this decade (unless all the upgrades were Apple proprietary and we wouldn't like that). They must have been hit quite badly by the number of us who stuck $300 SSDs in our 2011 MBPs and found that we had what felt like a brand new machine. You can see why Apple might want to increase built-in obsolescence or increase prices - however, doing both at the same time without significantly increasing functionality is a bit much. The counter to this is that the only reason I was prepared to lay out $3000 on a MBP 5-6 years ago was the reasonable expectation of getting 5 years out of it.


    *E.g. Most people certainly didn't need an ethernet port or an optical drive on the road by the time the first rMBP came out, and they compensated by adding a second Thunderbolt/DisplayPort and HDMI - so the TB port was no longer the only display connection - not to mention retina displays and superfast SSDs to sweeten the pill. As I said, not great for everybody but somebody had put some thought in, beyond "it has to be thinner!"

    **Actually, I err - he started by announcing that a 5-year-old sandbox construction game that already runs on everything from a $30 Raspberry Pi upwards is now available for AppleTV. Woohoo!

    *** Providing you want a video-optimised gamut rather than Adobe - my experience with wide-gamut displays is that unless they're the right gamut for what you're doing, and unless you're running a full colour-calibrated workflow, they're just a recipe for that tacky "Kodachrome Gold" look.
     
  7. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #7
    During the last financial call in to discuss Apple's quarterly results, one of the people asked Tm Cook if Apple had a strategy
    Link

    Tim Cook it seems was unable to say what over-arching strategy Apple employees, but instead offer the same old tired response, that they have some great things in the pipeline. We've heard this response for the last 5 years or so, and so far that's not been the case.
     
  8. Galacticos macrumors 6502a

    Galacticos

    Joined:
    Apr 5, 2016
    #8
    Tim cooks strategy is to say 'we think you're going to love it' until you're brainwashed.

    Apples mission statement under Tim crook - 'make emojis'
     
  9. Tech198 macrumors G4

    Joined:
    Mar 21, 2011
    Location:
    Australia, Perth
    #9
    Perhaps services is the only strong leader here.

    but as of late i always recon that Apple's business strategy was too confuse everyone. Services alone is good, but Apple is no longer doing the Apple car.... they wanna do something with apps, and content on Apple services which has changed so much back and fourth... now they wish to do original content instead, so i dunno whats gonna happen with that when they can't pull it off...

    Defiantly services.
     
  10. Luba, Nov 28, 2016
    Last edited: Nov 28, 2016

    Luba thread starter macrumors 6502a

    Luba

    Joined:
    Apr 22, 2009
    #10
    I think it's Apple and Tim Cook being secretive by saying they have no strategy. Making the decision to stop selling routers and Time Capsules took thought. Same with the monitors. The easy way out would be to do nothing. I imagine the routers, Time Capsules, and especially the monitors brought in profit for Apple, but they still decided to stop selling it. How much effort is it to design a shell for a monitor and have LG make it for them? Apple then marks it up and sells it for a profit although not a big profile. It's almost as if Apple was licensing its name in selling the monitors for "easy" money. Still, Apple decided to pass on this, as in not worth the effort?!?

    Apple is still developing Logic and Final Cut so I don't think they're abandoning the Pro market. But with 4k and even 8k workflows in video editing a new Mac Pro is definitely needed. But why doesn't Apple just reassure their Pro customers by saying a new Mac Pro is coming, that it's not EOL. They certainly wouldn't announce when, but what's the harm in stating is coming soon or in due time??
     

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