Apple just put it a letter to their investors warning them of lower than expected earnings and It doesn’t look good right the revenues down by like five to nine billion then lower than they expected the stock price dropped like ten percent overnight it was not good news, but a Hit like this does not destroy companies a lot of publications like this is the end of Apple.
It isn’t our least I certainly don’t think it is stuff like this happens. All right stuff like this happens to big companies and For a company like Apple they’re still one of the richest companies out there. There’s still one of the most profitable companies out there It’s not that this won’t have an effect on them. But I think there’s gonna be a huge wake-up call for the whole company so Tim Cook mentioned a few reasons in his letter as to why the Performance was poor and I want to touch on a couple of them He mentions the slower market in China being a big thing and he also mentions the battery replacement program and the effect that that program had on iPhone sales now if you’ll remember a little while ago someone discovered that Apple was reducing the performance on their iPhones when they were reaching a particular age or when the battery had degraded to a particular stage and That was really controversial.
Some people were like hey that’s fine Apple is trying to maintain the functionality of the phone by dropping the performance a little bit But just making sure that doesn’t reboot and other people were like what like what this is this is essentially planned obsolescence They’re making these phones slower to encourage you to buy a new one Clearly when you reduce the performance of your older iPhones more people are buying new iPhones and whether or not they did it with intent we’ll never know but the fact is people bought less iPhones this year because of that battery replacement program because you could just spend $30 and Apple would replace your battery and now your old phone suddenly felt new again Now as for tim’s comment on the economy in china It seems that people in china just aren’t buying as many iPhones as they expected.
And Apple is Extremely dependent on China to grow their iPhone business because almost every other developed market out There is heavily saturated on iPhones see iPhone only sells flagship devices But there’s only so many people in the world that are willing and able to buy a thousand dollar flagship phone There’s a finite number of people who want to spend that kind of money on an iPhone so right now in our market phone companies are trying to push new phones on us so hard like 5g phones smaller notches thinner bezels better this better that but the truth is the user experience on our phones hasn’t changed hasn’t Fundamentally changed in years like if you’re if you’re talking about iPhones the iPhone 5 or now let’s say the iPhone se So like the one that looks like the five that has a very similar experience to the newest latest and greatest iPhone tennis is a lot cheaper like the tennis is thousand bucks the IPhone se is probably like two hundred hundred fifty bucks, but they both run iOS twelve I still have to charge both of them at night whether you have a $200 I phone or a $1,200 iPhone.
The user experience is fundamentally the same right now if I phones want to have better business It doesn’t matter if it’s in Asia China or anywhere else in the world They either have to make way better phones or way cheaper phones those are really the only two options because all these iterative changes that have been doing year on year just isn’t cutting it and you Can see it in the numbers those sales figures.
Do not lie. Now. I want to talk about one last thing It’s the iPhone 10 R. This is a phone that launched at $750 and the reviews of it were decent No one really ripped on the phone like the initial impressions were a little weak with the screen resolution and stuff But people enjoyed the phone and I think a lot of people thought that for $750 you’re getting decent value the problem Is that when people buy iPhones when people want that Apple luxury brand? They want the real iPhone they don’t like the derpy version that they offer once in a while like the iPhone 5c and now the iPhone 10 are People want the good good.
They want the real iPhone so people just don’t buy the b-tier phone and I think this is something that Apple will Adjust in their game plan going forward and that’s really the whole message of this video the earnings warning Is bad news, right? Obviously, no one wants to hear that But I think Apple is a company that is smart enough that they’re gonna make some big moves They’re gonna make some big shifts in the direction of the company the roadmap of when they want to release things how they’re gonna do Things they’re gonna change because there’s no way that they’re gonna ride on this and just watch the company tank There’s no way I’m excited to see what they do It’s interesting that this handout the way that it did but I’m interested what you guys think like is this what you expected is this?
Theirs I personally don’t think it’s the end of Apple I think I know some of you guys do but I’d like to hear your thoughts.