Apple shares plummet after lower than expected iPhone sales

Apple shares plummet after lower than expected iPhone sales

Good morning, All,

Earning were reported last week, which made it an odd week for Apple, which reported a 35% increase in iPhone sales over last year, but the sales were well under the expected numbers. Still, Apple shares plummet(ed) after lower than expected iPhone sales. But remember: stock prices are based on predicted future earnings, and iPhones sales are expected to ‘go even softer:’ no new versions of the iPhone are going to be released in the near future.

According to the article, the iPhone did draw a number of ‘switcher’ – people who crossed over from other platforms – and Mac sales were up (iOS device sales outpace Windows PC sales for first time). Hard numbers on Watch sales were not released, although according to Apple CEO Tim Cook, June sales surpassed the sales of the previous two month, whatever that means in hard numbers, but ok. And while the press has pretty much bashed Apple’s latest platform, primarily non-tech consumers don’t necessarily agree: Apple Watch Satisfaction. It seems that the farther removed you are from the tech industry, the more you like the watch. For more user feedback, check out wristly.

Unfortunately, Steve Jobs set the bar very high, which makes Tim Cook’s job that much harder, but note to self, in case you need that tap on the shoulder to remind you what the company is all about:  It’s Apple, named for a fruit that is the apotheosis of elegance and simplicity – nature’s perfect fruit.  And that’s what the company represents. In case you missed it, it’s more or less its mission statement. We remember the Newton, which Steve Jobs’ hated (it was developed under then Apple CEO John Scully): Jobs’s retort to that PDA was the iPad, which was a resounding success: Jobs was a master marketer who knew how to position a product. The brilliance of the iPad was that it took the best/most usable features of the iPhone and ported them to a device on which they were easier to use: the keyboard was given a more usable, human-friendlier scale. Then again, Jobs was a rare breed and one of those visionaries who comes along once in a lifetime, if we’re lucky enough to bear witness: he had both business acumen (later in life) and an artistic bent. The iPad was utilitarian. It worked beautifully. And it was a hit.

This is not an homage to Steve Jobs: it’s a head’s up to understanding your medium. Kluging the iPhone’s OS onto a smaller platform – the watch – was counterintuitive. The platform needs to be reimagined. It was Apple’s first foray into wearables, an industry that is still in its very nascent stage, but still, for Apple, it does seem to be something of a do not pass go moment. It’s vision that drives growth.

Tim Cook is banking on huge holiday orders for the watch (Apple Watch to Be Sold at Best Buy, no doubt for holiday season sales and despite the fact that, when it was first released and to position it as a fashion accessory, it was made available at high end boutiques and department stores).  Translation: it’s not a ‘must have,’ which might also have contributed to the street’s lack of confidence in Apple this week. Gifting is about purchasing for someone else, and it may well find its niche out there, as has Google Glass: in this case, as a reminder mechanism/heads up for people who can’t be tethered to their phones screens all day: teachers and medical practitioners come to mind. We needn’t go through the whole laundry list. But with its diminutive screen, it may well be time for Tim Cook to channel his inner Steve Jobs and consider how that screen would best work for humans. The street is watching (no pun intended). Time to start over and do what Apple does best: Think different. Onward and forward.

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