Apple released financial reports this week that revealed a decline in quarterly revenue, something that hasn’t happened since 2003. In terms of product, Apple sold 51.2 million iPhones compared to 61.17 million iPhones sold in the same quarter last year.
As Jason Perlow, writer for Tech Broiler states, Apple sits on billions of dollars in cash assets. However, the core product of the Apple corporation is the iPhone, making up 68% of revenue. Perlow points out that the smartphone market is beginning to resemble that of the PC market. What has been done, is being done again and again. Smartphone innovation is almost to the point of little advancement, and will eventually give up shares to more price-aggressive Chinese products.
Aggressive prediction, but he has a point. Most of the model advancements we witness on the latest editions of smartphones are standard, improved battery life, sharper display, faster downloads and cloud storage. Nothing too major.
As Perlow writes, “Apple does not play by the same rules the rest of the industry does. This is both an advantage and a disadvantage.” One of Apple’s best skills is creating brand loyalty within its customers. Much of how Apple sustains itself is due to repeat customers, buying their products over and over again. How many of us are filled with excitement and joy at the hint of a new Apple product release? I’ll speak for myself here, I am a shining example of the usual Apple consumer. I have two Apple smartphones, both the 6 and the 5c, an iPad, and a Macbook. I began with one device and once I learned how to navigate the Apple “language” so to speak, I was hooked.
But is this enough? Perlow doesn’t seem to think so. He makes a valid point that once someone creates something that capitalizes on the Apple magic, but for a much cheaper price, most of Apple’s loyal fan base will probably jump ship. Once the displays, the RAM, flash, batteries and so on can be manufactured in China, Apple and Samsung are going to have some major competition.
Are we worried? Not really. Apple has close to 200 Billion dollars in cash assets just sitting, and they have braved lows like this before. Usually a downturn like this one leads to a peak innovation cycle for Apple.
If you would like to educate yourself in more detail about the information presented in this blog post please visit: Here comes the iPhone apocalypse and the end of Apple as we know it