No need to fret, Apple is doing fine

The New York Times:

Let’s get this out of the way first: Despite what you may have heard, the iPhone is not dying. Neither, by extension, is Apple.

It’s true that in an earnings report on Tuesday, after weeks of speculation by Wall Street that iPhone sales would finally hit a peak, Apple confirmed the news: IPhone sales grew at their lowest-ever rate in the last quarter. And the company projected total sales of as much as $53 billion in the current quarter that ends in March, which would be a decline of 8.6 percent from last year and Apple’s first revenue drop in more than a decade.

But if Apple is now hitting a plateau, it’s important to remember that it’s one of the loftiest plateaus in the history of business. The $18.4 billion profit that Apple reported on Tuesday is the most ever earned by any company in a single quarter.

It’s necessary to start with these caveats because people have a tendency to react strongly, almost apoplectically, to any suggestion of weakness on Apple’s part.

Yesterday’s earnings report followed the usual script – Apple announces amazing numbers and everyone says, “Yeah, but what’s next!?” I think Apple Executives and The Board of Directors look past the stock price at a much longer time frame. This allows them to, if not ignore the rending of garments, at least keep it in perspective. Apple is still, and will continue to be for the foreseeable future, a very succesful company.

  • yar

  • HiawathaJones

    Given all the talk about income inequality, wouldn’t it be only fair for Apple relinquish a lot of these profits to Microsoft and Samsung? Apple has reaped ALL the profits in the fastest growing segment of economy. Forget the 1 percent. It’s only Apple. Instead of taxing individuals, we should just nip the problem higher up and give Apple’s extraordinary profits to Microsoft and Samsung.

    • Danny-wa

      Ha ha ha ha – that’s great satire! Sure; let’s give profits to blatant copiers! Ha ha ha ha, thanks for the laugh.

      • HiawathaJones

        But Apple has used its PRIVILEGE to get its gains. It unfairly inherited the future just because Steve Jobs happened to visit the XEROX offices 37 years ago. Can’t we all agree that everything Apple has done, every ‘success’ it has enjoyed is built on original ‘copying’ and therefore illegitimate? Is this fair? Why should all the hardworking employees at Microsoft and Samsung be penalized today? Wouldn’t it be more fair if those hardworking employees at Microsoft and Samsung got the respect and money their work deserves? Isn’t that a fundamental right? If you don’t see the injustice in this, it’s because you are blinded by your own privilege. Why should Apple get all the smartphone profits?

        • Danny-wa

          Good morning. I did not realize you were in earnest. Apple was inspired by Xerox but to say they copied them is an oversimplification. But for Apple to give profits to its competitors is not how capitalism or competition works. And it’s not as if Microsoft or Samsung are poor little deers being beaten up by the big guy. Should Microsoft have given Apple its profits way back when it was on top and Apple was on bottom? There was a monetary exchange in 1998 but that was a tit-for-tat exchange, had nothing to do for Microsoft feeling sorry for beating Apple. As far as Samsung, they’ve blatantly copied Apple. And they’re not flailing as a company in any way . . . they are diversified into things such as televisions and military weapons. So, no, I do not agree. This is capitalism at its finest . . . what you are suggesting could be seen as socialism and our system doesn’t work that way.

          • HiawathaJones

            Danny-wa, thanks for your response. I was joking, but using rhetorical devices we hear too often these days. The fact that that a reasonable-seeming fellow such as yourself felt the need to engage with my argument only proves how crazy are the times in which we live.

  • JohnDoey

    I’m not concerned with the earnings report. I have full confidence that Tim Cook can keep the company profitable.

    What concerns me is that today’s Apple products are worse than last year’s Apple products, which were worse than the year before, which were worse than the year before that. It’s been a long time since they shipped newer versions that were actually better.

    An obvious example is the ridiculous keyboard they are shipping now on MacBook and with iMac. People are fussier about keyboards today than ever before because there are hundreds if not thousands of Bluetooth keyboards and they have one for their iPad and maybe their TV. Every PC maker has copied Apple’s keyboard and now Apple makes a newer one that is worse? It is a disaster.

    But the painful example is the software. iOS could be renamed “spreadsheet OS” or “clunky OS.” There is zero delight in using it. You touch it and a drawer pops out from somewhere that you didn’t want, and then an inscrutable error message pops up, and then the app you are using crashes, and then it offers you an update, and the device crashes multiple times during the update.

    The MacBook Pro is “MacBook Air plus” that is more of station wagon than the pickup truck that it needs to be, and the MacBook is a “MacBook Air minus” that nobody asked for, and the MacBook Air has no Retina Display, in spite of being Apple’s most popular Mac.

    If you think the earnings report has no relation to what is actually going on, I can tell you, my Apple spending has crashed over the past 3 years. I used to get new devices all the time, but now I replace a device only when I absolutely have to — like I bought my current iPad to get 64-bit for an app that I use a lot, which enables it to have many more features. It’s like a PC user. The products have no delight in them, and they are flaky and unreliable and require you to do all kinds of unexpected I-T work all the time, and so you are worn out thinking about them, and you do as little upgrading or changing anything as possible. Apple Store used to be a beacon of hope, but now I am holding out hope that Scott Forstall turns up at Microsoft with an all-new OS that replaces Windows entirely, in the same way that the Edge browser replaced Internet Explorer.

    And the iPhone 6 line is made up of iPad nanos, and there is no iPhone line anymore. If you wanted a small iPad, you are really happy with iPhone 6. But many of us do not want small iPads. There is no current iPhone that interests me at all. There should have been a 4-inch version of iPhone 6. My iPhone runs iMessage and FaceTime almost all the time — it is a phone, not a mini-iPad. I never once thought “I wish this was bigger.” I have been wishing since 2007 for my iPhone to get smaller. I would love if they made a flip-phone version that had a hinge in the middle of the screen, so it could be smaller still.

    Anyway, Apple is just another tech company now, with zero editorial oversight, little to no culture, spreadsheet user interface, inscrutable error messages, forced I-T work interrupting you at any time, thousands of settings to configure, and you have to play I-T helper for all of your relatives all the time if you are technical at all. Of course the Apple financials are going to fall down to where other tech companies are.

    Except that Alphabet/Google’s financials are way up and they are about to pass Apple. Not surprising at all. If all software looks and feels like Google software, why not use the free Google stuff? Why pay for Apple’s faux-Google experience? The current version of iMovie literally looks and feels like the Flash-based video editor that is built into YouTube and runs in Chrome. That is a tragedy for a Mac app.

    And why pay a premium for the Apple stuff when over the life of the product, it will get updated so that it is measurably worse?

    PC users used to say to us Apple users that we are only using Macs because of teh shiny. And we would say, no, we use Macs because of the software, because of the Mac OS. That we would rather run Mac OS X on a horrible Dell laptop than run Windows on a MacBook Pro. It was all about the software. That is what has been totally missed at Apple these days. They should have fired Jony Ives and kept Scott Forstall. It’s the Scott Forstall contribution that made iPhone special. I couldn’t care less than I do about chamfered edges and removing all trace of art and delight from a product. I care almost exclusively about the software, which has been awful since iOS 7.

    If you had told me 10 years ago that there would be a new Mac OS and it would be free and it would have a 1-click installer built into the current Mac OS, and that I would refuse to click “install,” I would have said you were crazy. We used to preorder the boxed version for $129. That is because it was always better than what we had.