Apple is not having a good 2024, with legal headaches & obscurity regarding its product innovation, that is causing investors to lose faith. Will it be able to engineer a comeback?
I need to preface this by saying I am *not* an Apple hater. But ... I think the DoJ and European cases against them are reasonable and long overdue. Their refusal for years to support universal standards like USB-C and RCS has been high level not cool. Tim Cook had a "Let them eat cake" level quote on the RCS and messaging subject too - which doesn't help their case.
On the need for an AI specific device, I think Carl Pei (co-founder of OnePlus and founder of Nothing) has the most viable and promising sounding take. He thinks the smartphone will still be our primary device, but says smartphones need a new metaphor.
"I think it needs to slowly augment away the apps. Today, we’re using some really simple, mindless-scrolling apps, right? What if we wanted to accomplish more complicated tasks like 3D modeling or photo editing, or I don’t know what? It’s actually quite difficult to learn how to use these new apps. Maybe we can just tell the phone what we need to do, and it would use those apps for us without the apps even being visible in the foreground."
And he said this back in August of 2023, when I hadn't heard any other person or company frame things that way. I wrote a little about it here:
Mar 29·edited Mar 29Liked by Amrita Roy, Uttam Dey
Interesting thoughts. I have always thought since Microsoft's last ditch effort at a phone that it was a monopolistic market. You can't break into these app markets. Apple should have faced pressure to open up years ago.
That being said, I don't know if the DOJ will win the case, but at least there is an effort. As I have questioned why Microsoft went through the ringer decades ago, just so companies can do basically whatever they want.
Apples ecosystem is like Microsoft pushing its browser. Though the argument that the choice between open(google) and closed(apple) is hard for me, as I actually went to Apple for the closed system, more security I felt.
IMO there should be more cross-intergration. Apple should never be able to push out devices on their ecosystem while essentially shadow banning similar products by giving less support.
I definitely agree on the need for more cross integration. Again though, Apple seem the least willing to play nice with others :) I think maybe, just maybe, their dominant grip on the smartphone market might get shaken up in the next few years. They dominate mostly because of profit margin, not volume of sales - and I think more people are realizing that iPhones are terrible value for money.
Yep - Actually, I'll piggy back a bit on your point about the value for money ppl see on iPhones and say, generally, ppl see lower value for money in smartphones. Apple became the largest smartphone maker by volume last year (https://www.ft.com/content/57163469-8682-4897-bbb2-1a200e4711d4)..
This also goes back to your point you brought up about Carl Pei's quote. Smartphones have to be reimagined in the AI era. I dont think apps ecosystem is the right way to go about it because there are millions of apps now for everything. Phone companies have been getting away for a long time by just engineering on better chips, better camera lenses or larger screens. Thats mostly all the hardware improvements that smartphone makers have delivered in the last 10 years.
So ppl see this and think less about upgrading their phones - leading to longer upgrade cycles and slower phone sales
"This also goes back to your point you brought up about Carl Pei's quote. Smartphones have to be reimagined in the AI era. I dont think apps ecosystem is the right way to go about it because there are millions of apps now for everything. Phone companies have been getting away for a long time by just engineering on better chips, better camera lenses or larger screens. Thats mostly all the hardware improvements that smartphone makers have delivered in the last 10 years."
A part of my choice was because I had been in the Microsoft ecosystem prior and didn’t want to give my data to Google. Felt Apple would be a better keeper of my data. Even though there are more options and cheaper phones with similar quality on android.
Now that I’m here I really feel stuck as it’s one of the other. That’s it.
I come from a similar point in experience too. I had been in in an open ecosystem using laptops and android phones. I still use an android phone but cant go back to MicrosoftOS laptops now, i guess. I used to scoff at the idea of being entirely in Apple's ecosystem but I see the point now for some folks. Plus, their privacy push is actually just a huge deal actually - ppl think about privacy more than they say when choosing products especially after FB's Cambridge Analytics escapade.
I think Apple caught on to that and just kept engineering products towards users ease of user and privacy which caught on well. And then with lack of regulation, they were free to make their own rules.
Oh heck yeah - Apple deserves lots of kudos for their efforts around privacy. I've been an iMac user through several generations of them and can't see myself changing any time soon. On the phone side of things, I've been an Android user for many years - mostly Pixel, a few Galaxy Notes, and now the Nothing Phone 2 as well.
Mar 29·edited Mar 29Liked by Amrita Roy, Uttam Dey
While I appreciate Apple's move towards adopting standards like USB-C, after years of insistence on their proprietary cables, I have reservations about certain EU regulations. These include mandates for making iOS/iPadOS features fully accessible to third-party developers—a move that has previously backfired on Apple—and the requirement for Apple to support third-party app stores and sideloading.
Apple has indicated that these rules would necessitate creating a separate version of their operating systems for the EU, diverging from the version used by the rest of the world. This approach could be problematic for the EU, especially if the EU-specific version receives updates less frequently. Such a delay could expose EU users to security vulnerabilities that are addressed more swiftly in the primary version of the OS. The primary version, in this context, refers to the one used by the majority of Apple's user base, with the EU representing a smaller segment. The financial burden of maintaining two different versions of their OS and possibly hardware could potentially lead Apple to reconsider its presence in the EU market. This might involve halting the sale of new devices or ceasing updates for existing tools within EU countries.
I'm not sure of the legal implications of this, but is Apple allowed to follow through on their plan to have an EU version of their devices and operating systems, while keeping the "main version" available to the rest of us outside the EU? Does the DMA prevent that? Because if it is allowed to do this, I think it could be a bad thing for EU Apple fans.
Thanks for adding your thoughts, Dan. I'm not sure too about how exactly Apple plans to comply over the long-term. For now, they have put out an explainer about the impact on fees if apps want to manage their own distribution and payment processing (https://developer.apple.com/support/fee-calculator-for-apps-in-the-eu/) but it actually turns out more expensive if the app has more installs as in the case of Spotify etc.
Im pretty sure Apple is not going to exit the EU. One of the articles you added in your comment has this line which i think is quite true about how Cook runs his ship at Apple.
"Tim Cook just isn't the kind of CEO to make such a big move. He's too conservative, too timid, too focused on the bottom line."
There is going to be more synergetic work that Apple will be doing with regulatory teams across the world. Until then they have to think about the next big invention really fast.
So I sat here scribbling out a comment, and realized I was accidentally creating a full-length article... again. So, I am going to post one based on an article of yours - AGAIN - sometime next week.
You do inspire content, Amrita... :-)
As always, insightful, thoughtful, and accessible. Thank you!
Thank you Stone. Actually, most of the work on this post is written by my husband Uttam Dey, who understands the space of technology way better than I can. I am a simpleton, when it comes to tech.
I am delighted you are inspired. Can't wait to read your next post.
Perhaps I am a simpleton or, at least, have a simplistic understanding but my view of the 'attacks' on Apple by governments and their agencies, as well as those by other companies and in the press, are that they are predominantly a case of 'Tall Poppy Syndrome'.
Apple has been its own company from the very beginning. It built its reputation not only on innovation but particularly on quality, a user-centric operating system, and not least, a 'drive it' rather than 'copy it' independence that separate it from countless companies producing nothing more than cobbled together clones using a variety of, (not necessarily fully compatible or reliable), components and a licensed operating system far inferior and plagued with inconsistencies and defects in virtually every iteration.
That independent approach, user focus and high quality is what built the enormous customer loyalty of Apple users and built it regardless of the nonsensical and delusional claims of the 'anti-Apple' cult members.
The notion that Apple's policies have limited competition in the smart phone market just does not stand up to scrutiny. There is one iPhone manufacturer and tens or even hundreds of other smart phone manufacturers. Just as with the personal computer market, those users who want to use something other than Apple have a massive variety of options in both hardware, software, streaming services, and operating systems. Not only that but, as they themselves are fond of pointing out, in the main the hardware options are less costly than those of Apple.
Apple products have always been said to be too 'expensive'. In fact, this is a falsity. It stemmed from the fact that Apple hardware included all necessary components for everyday use whereas its competitors required the addition of cards to provide all manner of utility already built in to Apple hardware. In addition, because of Apple's control of both hardware and software, its integration of the two has always been superior and, as a bonus, Apple has included a suite of most commonly required applications as part of the purchase package. If one bothered to compare the final, operationally ready result, there was little difference in total cost of 'like with like' in terms of the whole caboodle but a significant advantage in the Apple package integration, quality and retention of value over time.
So, this is a case of, 'if you can't beat them - defame them, criticise them, propagandise against them and lobby as much as possible to see that they are torn down, not least by making them operate in the same way and to the same, (usually lower), standards as every other company which hasn't got the where-with-all to compete on merits.
These suits against Apple are a case of drag everyone down to the bottom - the common denominator - one size fits all. They will not improve creativity, innovation, quality, value for money or anything else.
The only real crisis period in Apple's history was when its ex soft drink company CEO chose to open it up to third party licensing of its software. It was a disaster and so were the products created by those third parties, probably without exception. This type of scenario is exactly what its competitors want.
Envying, criticising and demonising the genuinely successful, i.e. those that have actually put in the thought, innovation, effort and vision to create good quality offerings, is ubiquitous. However, it is neither desirable nor productive and its result is inevitably a lowering of standards and a loss, rather than a gain to consumer and industry.
I am not a fan of capitalism or big business or materialism. I have never had 'wealth' as an aim. However, I live in a capitalist world and have to operate within it. I therefore respect those businesses which operate responsibly and with customer focus and which do so through their vision and collaboration of excellent staff. What we need in this capitalist, generally 'rip-off' system is not to attack Apple but to see the creation of more companies with their ethos.
Thank you v.v. much for such a detailed, well thought out perspective. For someone to remember Apple's updates all the way fro John Sculley's era means you have deep background in the company and have wayy more than the "simplistic understanding." you humbly mention.
John Sculley's era was a disaster for the company because of the reasons you pointed out. Apple has always been about prioritizing user experience (cannot underline this enough) and they are really looking to avoid going down that road.
Thank you, Uttam, for your kind words. In fact, my first Apple computer was an Apple II+, 16 kb. (yes kilobytes) of memory and 6 colours ... I've had one of almost every evolution of the company's products since. Unfortunately, I no longer have them all, though I do still have a fully working Mac SE from 1988 and a last model Macbook Pro 17" from 2011 which I still use for email and casual use, my main machine now being a Mac Mini.
I started out with Amstrads and Commodores and such and had several DOS machines prior to Microsoft introducing Windows, which initially was a flop. They subsequently leap-frogged a version 2 and introduced Windows 3.0 which almost immediately had to be upgraded to 3.1 - the first even reasonable iteration of Windows. In my work, I had to use Windows appalling systems and so would run them side by side with my personal Macs. The fact that the Mac would run much Windows software was extremely useful to me. The only aspect of the two systems I've ever regretted was that MS Access was never available for the Mac. I created many custom databases for my work and although using Filemaker on the Mac, I did prefer MS Access because it allowed me to see what was happening. I still think it stands out among database software for that reason, though it has fallen behind other database products in many respects.
Anyway, I'm raving, so I'll shut up and go. Until I see some evidence of a substantial change in Apple's approach to client safety and ease of use, as well as aesthetic finesse, reliability and resale value, I will stick with them and, right now, if I were to change it would be to a Linux variant, not to Windows.
Really good article! Interesting thoughts on Apple and a unique way of looking at the company. Something that makes a lot of sense to me is how Apple hasn’t jumped into AI. They haven’t said anything about it, and the stock is down 8% this year; we’ll see what happens.
I buy all my products from Apple: Mac, Phone, Watch, and iPad. I personally really like Apple. But now they will release the new iPhone soon.
And as you said, what will be different? Just the camera? As a consumer, I am expecting way more maybe something with AI, so we’ll see what happens!
Thanks for your thoughts, Carlos. Someone on the comment section talked about Apple being stuck in the case of classic Investor's Dilemma. They dont want to risk too much with the iPhone because its become such a predictable way of earning revenue for them without harming user experience.
Knowing Apple, I think they would launch a new line of phones which may include some hardware AI benefits without cannibalizing their current iPhone revenue. That would give them a way to analyze user adoption curves in relation to market as well as their current iPhone lineup... Like maybe calling it IPhone ProAI or something.
I agree with the points about Apple the company. Apple the stock had its cycle disrupted by the pandemic and stimulus checks. It still needs time to shake off those negative effects.
Although not anywhere near as all the important factors you spoke about above, I'm actually most excited/interested to see what they do with all the progress they made towards the EV. Apple has never started a big project and not monetized from it. I can't see that happening with the EV.
Hi Oliver - Apple has cancelled their EV project as of Feb this year. i initially thought they would still do something with the team like transition the EV Team resources over to some of their Home Robotics projects. But that's not going to happen anymore. As of yesterday, they laid off the entire EV team: https://www.macrumors.com/2024/04/04/apple-employee-layoffs-car-project/
That leaves Apple only with its Apple CarPlay app which is fighting with Google's Android Auto for more penetration.
Apple is going through classic innovator's dilemma.
The main reasons sales stall is that Apple products are so good that Apple struggle to make better ones with the existing technology and users also don't see any reason to upgrade because their iPhone still works perfectly after 4 years.
I still use my old iPhone 11, it works perfectly I don't see any utility in upgrading to iPhone 15.
Solution? Apple may come with a disruptive innovation that will make iPhone redundant or remake the iPhone but it can't know whether it will be as successful as iPhone which has 1.5 billion installed base across the world.
Exactly. You said it right in just two words: Investor's Dilemma. Striking a positive balance between risk and reward is critical for the company to achieving long-term investment success. So no bold hardware features on the iPhone pushing out upgrade cycles.
Love this as usual. I wonder what your thoughts are on Apple being the canary in the coalmine in terms of regulatory headwinds? Especially with the EU AI act coming up soon too
My personal view is that regulation will be the new norm in digital platforms moving forward. Regulation always takes a while to catch up to innovation and some of that is probably deliberate as regulators learn about the next innovation taking over the world while also giving them time to observe fundamental issues that pop up with the new innovation.
This is definitely going to be expected moving forward. We're seeing regulation in Cryptocurrency and Software/App platforms ramp up, innovations that were launched 10-15 years ago. The same thing happened in data too with GDPR in 2018 and now GDPR compliance is a must. Was GDPR a bad thing for user data and data businesses? I dont think so. I expect similar positive trends to emerge for Apple/Google and the likes as well as all app/software platforms eventually settle on mutual understanding of policies.
Apple watchers worry too much about Apple's falling standards on innovation but what is usually discounted is the next few months which will be Apple's most important yet. And for these reasons more than anything else, Tim Cooks is the best man for this job at the moment.
In the mega cap tech world, lawsuits come and go. Companies with deep pockets like AAPL will settle the suits, pay the fine, make some changes and move on to their next set of product launches. As an investor, debates on who is right or wrong are fruitless. Unless there is some egregious fraud, we investors look for such opportunities to buy low and then sell higher.
As a consumer, we are an all Apple family and could not be happier. The seamless ecosystem works when my daughter is airdropping pics and videos to my wife and me and vice versa. Our profiles and air pod connections instantly work as we shift from one device to the other. And we have not had any problem (touch wood) with viruses and spamware on our apple devices.
BTW - I love your chart of AAPL's recent AI related acquisitions. Thanks for an interesting and thought provoking writeup.
Thanks for the encouraging words, Beachman! I agree to everything you said - This one sentence in your arguments sums up exactly how investors should approach tacticals as long as the long-term thesis still holds....
"we investors look for such opportunities to buy low and then sell higher."
I have used nothing but Apple computers and phones. Although for a short time I enjoyed blackberries, and still think they were the best. I noticed their products have diminished in quality. The geniuses at the Apple stores are more interested in up-selling then they are helping you with your computer issues. If I were an investor I would consider pulling out.
I loved how you could type on them very easy with two thumbs! I guess they are no longer available, but I just loved them! 📱♥️ Thank you for another great thoughtful post!
Thank you soooooo much! Sending you a big virtual hug AudioPhiliac! 🤗
I remember the days when you could take your Apple down to the local Apple store and have it repaired. Walk right in and get service. Now you have to make an appointment with one of their so-called geniuses, which do nothing but try to upsell to you. None really know their product in my opinion. That’s the experience I’ve had with them.
I was one of the leads on the Vision Pro/technology development team at Apple.
It’s kind of disheartening to know that you can work on designing and launching the most complex consumer hardware product ever and still have your stock price fall haha.
Especially given how difficult it is to scale physical products.
Yep. To expand on your last point further - I believe the differences between Apple fans and non-fans are widening because fans who upgrade their phones in less than 2 years have continued to do so but folks who hold their phones for 2 years or more are now holding their iPhones for +3 years.
Like I pointed out earlier, Apple mostly either upgrades the iPhones hardware with better processing (chips), high screen resolution (screens), or better camera lens. Apart from that most of the other upgrades have usually been with on-phone processing such as picture resolution, or sound enhancements or stuff like that. So may be it points to what you mentioend earlier about in another way that people dont benefit from hardware upgrades.
About the feature you mentioned - to easily move iMessages and photos to another phone or device... I believe Google's Android is a seamless service to do that. I ve used this before. Was this what you were talking about?
I need to preface this by saying I am *not* an Apple hater. But ... I think the DoJ and European cases against them are reasonable and long overdue. Their refusal for years to support universal standards like USB-C and RCS has been high level not cool. Tim Cook had a "Let them eat cake" level quote on the RCS and messaging subject too - which doesn't help their case.
On the need for an AI specific device, I think Carl Pei (co-founder of OnePlus and founder of Nothing) has the most viable and promising sounding take. He thinks the smartphone will still be our primary device, but says smartphones need a new metaphor.
"I think it needs to slowly augment away the apps. Today, we’re using some really simple, mindless-scrolling apps, right? What if we wanted to accomplish more complicated tasks like 3D modeling or photo editing, or I don’t know what? It’s actually quite difficult to learn how to use these new apps. Maybe we can just tell the phone what we need to do, and it would use those apps for us without the apps even being visible in the foreground."
And he said this back in August of 2023, when I hadn't heard any other person or company frame things that way. I wrote a little about it here:
https://pjordan.substack.com/p/visionary-words-on-the-primary-device
Interesting thoughts. I have always thought since Microsoft's last ditch effort at a phone that it was a monopolistic market. You can't break into these app markets. Apple should have faced pressure to open up years ago.
That being said, I don't know if the DOJ will win the case, but at least there is an effort. As I have questioned why Microsoft went through the ringer decades ago, just so companies can do basically whatever they want.
Apples ecosystem is like Microsoft pushing its browser. Though the argument that the choice between open(google) and closed(apple) is hard for me, as I actually went to Apple for the closed system, more security I felt.
IMO there should be more cross-intergration. Apple should never be able to push out devices on their ecosystem while essentially shadow banning similar products by giving less support.
I definitely agree on the need for more cross integration. Again though, Apple seem the least willing to play nice with others :) I think maybe, just maybe, their dominant grip on the smartphone market might get shaken up in the next few years. They dominate mostly because of profit margin, not volume of sales - and I think more people are realizing that iPhones are terrible value for money.
Yep - Actually, I'll piggy back a bit on your point about the value for money ppl see on iPhones and say, generally, ppl see lower value for money in smartphones. Apple became the largest smartphone maker by volume last year (https://www.ft.com/content/57163469-8682-4897-bbb2-1a200e4711d4)..
This also goes back to your point you brought up about Carl Pei's quote. Smartphones have to be reimagined in the AI era. I dont think apps ecosystem is the right way to go about it because there are millions of apps now for everything. Phone companies have been getting away for a long time by just engineering on better chips, better camera lenses or larger screens. Thats mostly all the hardware improvements that smartphone makers have delivered in the last 10 years.
So ppl see this and think less about upgrading their phones - leading to longer upgrade cycles and slower phone sales
THIS! You said it way better than I did:
"This also goes back to your point you brought up about Carl Pei's quote. Smartphones have to be reimagined in the AI era. I dont think apps ecosystem is the right way to go about it because there are millions of apps now for everything. Phone companies have been getting away for a long time by just engineering on better chips, better camera lenses or larger screens. Thats mostly all the hardware improvements that smartphone makers have delivered in the last 10 years."
🥸🤖
A part of my choice was because I had been in the Microsoft ecosystem prior and didn’t want to give my data to Google. Felt Apple would be a better keeper of my data. Even though there are more options and cheaper phones with similar quality on android.
Now that I’m here I really feel stuck as it’s one of the other. That’s it.
I come from a similar point in experience too. I had been in in an open ecosystem using laptops and android phones. I still use an android phone but cant go back to MicrosoftOS laptops now, i guess. I used to scoff at the idea of being entirely in Apple's ecosystem but I see the point now for some folks. Plus, their privacy push is actually just a huge deal actually - ppl think about privacy more than they say when choosing products especially after FB's Cambridge Analytics escapade.
I think Apple caught on to that and just kept engineering products towards users ease of user and privacy which caught on well. And then with lack of regulation, they were free to make their own rules.
Oh heck yeah - Apple deserves lots of kudos for their efforts around privacy. I've been an iMac user through several generations of them and can't see myself changing any time soon. On the phone side of things, I've been an Android user for many years - mostly Pixel, a few Galaxy Notes, and now the Nothing Phone 2 as well.
I get that. Think it's very common to be so embedded in one of these ecosystems that thinking about a change is a nightmare.
While I appreciate Apple's move towards adopting standards like USB-C, after years of insistence on their proprietary cables, I have reservations about certain EU regulations. These include mandates for making iOS/iPadOS features fully accessible to third-party developers—a move that has previously backfired on Apple—and the requirement for Apple to support third-party app stores and sideloading.
Apple has indicated that these rules would necessitate creating a separate version of their operating systems for the EU, diverging from the version used by the rest of the world. This approach could be problematic for the EU, especially if the EU-specific version receives updates less frequently. Such a delay could expose EU users to security vulnerabilities that are addressed more swiftly in the primary version of the OS. The primary version, in this context, refers to the one used by the majority of Apple's user base, with the EU representing a smaller segment. The financial burden of maintaining two different versions of their OS and possibly hardware could potentially lead Apple to reconsider its presence in the EU market. This might involve halting the sale of new devices or ceasing updates for existing tools within EU countries.
David's article offers insightful perspectives on this issue: https://world.hey.com/dhh/could-apple-leave-europe-76441933
However, the likelihood of Apple exiting the EU market entirely seems slim, as highlighted in this piece: https://abcnews.go.com/Technology/wireStory/apples-regulatory-battles-europe-foreshadow-us-antitrust-suit-108356677
I'm not sure of the legal implications of this, but is Apple allowed to follow through on their plan to have an EU version of their devices and operating systems, while keeping the "main version" available to the rest of us outside the EU? Does the DMA prevent that? Because if it is allowed to do this, I think it could be a bad thing for EU Apple fans.
Thanks for adding your thoughts, Dan. I'm not sure too about how exactly Apple plans to comply over the long-term. For now, they have put out an explainer about the impact on fees if apps want to manage their own distribution and payment processing (https://developer.apple.com/support/fee-calculator-for-apps-in-the-eu/) but it actually turns out more expensive if the app has more installs as in the case of Spotify etc.
Im pretty sure Apple is not going to exit the EU. One of the articles you added in your comment has this line which i think is quite true about how Cook runs his ship at Apple.
"Tim Cook just isn't the kind of CEO to make such a big move. He's too conservative, too timid, too focused on the bottom line."
There is going to be more synergetic work that Apple will be doing with regulatory teams across the world. Until then they have to think about the next big invention really fast.
So I sat here scribbling out a comment, and realized I was accidentally creating a full-length article... again. So, I am going to post one based on an article of yours - AGAIN - sometime next week.
You do inspire content, Amrita... :-)
As always, insightful, thoughtful, and accessible. Thank you!
Thank you Stone. Actually, most of the work on this post is written by my husband Uttam Dey, who understands the space of technology way better than I can. I am a simpleton, when it comes to tech.
I am delighted you are inspired. Can't wait to read your next post.
Oh heck, Uttam is your husband? I didn't know that! I should have, through - his takes are sharp like yours :-)
Perhaps I am a simpleton or, at least, have a simplistic understanding but my view of the 'attacks' on Apple by governments and their agencies, as well as those by other companies and in the press, are that they are predominantly a case of 'Tall Poppy Syndrome'.
Apple has been its own company from the very beginning. It built its reputation not only on innovation but particularly on quality, a user-centric operating system, and not least, a 'drive it' rather than 'copy it' independence that separate it from countless companies producing nothing more than cobbled together clones using a variety of, (not necessarily fully compatible or reliable), components and a licensed operating system far inferior and plagued with inconsistencies and defects in virtually every iteration.
That independent approach, user focus and high quality is what built the enormous customer loyalty of Apple users and built it regardless of the nonsensical and delusional claims of the 'anti-Apple' cult members.
The notion that Apple's policies have limited competition in the smart phone market just does not stand up to scrutiny. There is one iPhone manufacturer and tens or even hundreds of other smart phone manufacturers. Just as with the personal computer market, those users who want to use something other than Apple have a massive variety of options in both hardware, software, streaming services, and operating systems. Not only that but, as they themselves are fond of pointing out, in the main the hardware options are less costly than those of Apple.
Apple products have always been said to be too 'expensive'. In fact, this is a falsity. It stemmed from the fact that Apple hardware included all necessary components for everyday use whereas its competitors required the addition of cards to provide all manner of utility already built in to Apple hardware. In addition, because of Apple's control of both hardware and software, its integration of the two has always been superior and, as a bonus, Apple has included a suite of most commonly required applications as part of the purchase package. If one bothered to compare the final, operationally ready result, there was little difference in total cost of 'like with like' in terms of the whole caboodle but a significant advantage in the Apple package integration, quality and retention of value over time.
So, this is a case of, 'if you can't beat them - defame them, criticise them, propagandise against them and lobby as much as possible to see that they are torn down, not least by making them operate in the same way and to the same, (usually lower), standards as every other company which hasn't got the where-with-all to compete on merits.
These suits against Apple are a case of drag everyone down to the bottom - the common denominator - one size fits all. They will not improve creativity, innovation, quality, value for money or anything else.
The only real crisis period in Apple's history was when its ex soft drink company CEO chose to open it up to third party licensing of its software. It was a disaster and so were the products created by those third parties, probably without exception. This type of scenario is exactly what its competitors want.
Envying, criticising and demonising the genuinely successful, i.e. those that have actually put in the thought, innovation, effort and vision to create good quality offerings, is ubiquitous. However, it is neither desirable nor productive and its result is inevitably a lowering of standards and a loss, rather than a gain to consumer and industry.
I am not a fan of capitalism or big business or materialism. I have never had 'wealth' as an aim. However, I live in a capitalist world and have to operate within it. I therefore respect those businesses which operate responsibly and with customer focus and which do so through their vision and collaboration of excellent staff. What we need in this capitalist, generally 'rip-off' system is not to attack Apple but to see the creation of more companies with their ethos.
Take care. Stay safe. ☮️
Thank you v.v. much for such a detailed, well thought out perspective. For someone to remember Apple's updates all the way fro John Sculley's era means you have deep background in the company and have wayy more than the "simplistic understanding." you humbly mention.
John Sculley's era was a disaster for the company because of the reasons you pointed out. Apple has always been about prioritizing user experience (cannot underline this enough) and they are really looking to avoid going down that road.
Thank you, Uttam, for your kind words. In fact, my first Apple computer was an Apple II+, 16 kb. (yes kilobytes) of memory and 6 colours ... I've had one of almost every evolution of the company's products since. Unfortunately, I no longer have them all, though I do still have a fully working Mac SE from 1988 and a last model Macbook Pro 17" from 2011 which I still use for email and casual use, my main machine now being a Mac Mini.
I started out with Amstrads and Commodores and such and had several DOS machines prior to Microsoft introducing Windows, which initially was a flop. They subsequently leap-frogged a version 2 and introduced Windows 3.0 which almost immediately had to be upgraded to 3.1 - the first even reasonable iteration of Windows. In my work, I had to use Windows appalling systems and so would run them side by side with my personal Macs. The fact that the Mac would run much Windows software was extremely useful to me. The only aspect of the two systems I've ever regretted was that MS Access was never available for the Mac. I created many custom databases for my work and although using Filemaker on the Mac, I did prefer MS Access because it allowed me to see what was happening. I still think it stands out among database software for that reason, though it has fallen behind other database products in many respects.
Anyway, I'm raving, so I'll shut up and go. Until I see some evidence of a substantial change in Apple's approach to client safety and ease of use, as well as aesthetic finesse, reliability and resale value, I will stick with them and, right now, if I were to change it would be to a Linux variant, not to Windows.
Take care. Stay safe. ☮️
Really good article! Interesting thoughts on Apple and a unique way of looking at the company. Something that makes a lot of sense to me is how Apple hasn’t jumped into AI. They haven’t said anything about it, and the stock is down 8% this year; we’ll see what happens.
I buy all my products from Apple: Mac, Phone, Watch, and iPad. I personally really like Apple. But now they will release the new iPhone soon.
And as you said, what will be different? Just the camera? As a consumer, I am expecting way more maybe something with AI, so we’ll see what happens!
Thanks for your thoughts, Carlos. Someone on the comment section talked about Apple being stuck in the case of classic Investor's Dilemma. They dont want to risk too much with the iPhone because its become such a predictable way of earning revenue for them without harming user experience.
Knowing Apple, I think they would launch a new line of phones which may include some hardware AI benefits without cannibalizing their current iPhone revenue. That would give them a way to analyze user adoption curves in relation to market as well as their current iPhone lineup... Like maybe calling it IPhone ProAI or something.
We will see!!
I agree with the points about Apple the company. Apple the stock had its cycle disrupted by the pandemic and stimulus checks. It still needs time to shake off those negative effects.
Although not anywhere near as all the important factors you spoke about above, I'm actually most excited/interested to see what they do with all the progress they made towards the EV. Apple has never started a big project and not monetized from it. I can't see that happening with the EV.
Hi Oliver - Apple has cancelled their EV project as of Feb this year. i initially thought they would still do something with the team like transition the EV Team resources over to some of their Home Robotics projects. But that's not going to happen anymore. As of yesterday, they laid off the entire EV team: https://www.macrumors.com/2024/04/04/apple-employee-layoffs-car-project/
That leaves Apple only with its Apple CarPlay app which is fighting with Google's Android Auto for more penetration.
Apple is going through classic innovator's dilemma.
The main reasons sales stall is that Apple products are so good that Apple struggle to make better ones with the existing technology and users also don't see any reason to upgrade because their iPhone still works perfectly after 4 years.
I still use my old iPhone 11, it works perfectly I don't see any utility in upgrading to iPhone 15.
Solution? Apple may come with a disruptive innovation that will make iPhone redundant or remake the iPhone but it can't know whether it will be as successful as iPhone which has 1.5 billion installed base across the world.
Exactly. You said it right in just two words: Investor's Dilemma. Striking a positive balance between risk and reward is critical for the company to achieving long-term investment success. So no bold hardware features on the iPhone pushing out upgrade cycles.
Beautifully written. Quality work, as always!
Thank you!
We are all waiting for the next big Apple move :-) I'm in the team that says "since Steve passed away, the same happened with Apple's innovation"
Love this as usual. I wonder what your thoughts are on Apple being the canary in the coalmine in terms of regulatory headwinds? Especially with the EU AI act coming up soon too
My personal view is that regulation will be the new norm in digital platforms moving forward. Regulation always takes a while to catch up to innovation and some of that is probably deliberate as regulators learn about the next innovation taking over the world while also giving them time to observe fundamental issues that pop up with the new innovation.
This is definitely going to be expected moving forward. We're seeing regulation in Cryptocurrency and Software/App platforms ramp up, innovations that were launched 10-15 years ago. The same thing happened in data too with GDPR in 2018 and now GDPR compliance is a must. Was GDPR a bad thing for user data and data businesses? I dont think so. I expect similar positive trends to emerge for Apple/Google and the likes as well as all app/software platforms eventually settle on mutual understanding of policies.
Apple watchers worry too much about Apple's falling standards on innovation but what is usually discounted is the next few months which will be Apple's most important yet. And for these reasons more than anything else, Tim Cooks is the best man for this job at the moment.
In the mega cap tech world, lawsuits come and go. Companies with deep pockets like AAPL will settle the suits, pay the fine, make some changes and move on to their next set of product launches. As an investor, debates on who is right or wrong are fruitless. Unless there is some egregious fraud, we investors look for such opportunities to buy low and then sell higher.
As a consumer, we are an all Apple family and could not be happier. The seamless ecosystem works when my daughter is airdropping pics and videos to my wife and me and vice versa. Our profiles and air pod connections instantly work as we shift from one device to the other. And we have not had any problem (touch wood) with viruses and spamware on our apple devices.
BTW - I love your chart of AAPL's recent AI related acquisitions. Thanks for an interesting and thought provoking writeup.
Thanks for the encouraging words, Beachman! I agree to everything you said - This one sentence in your arguments sums up exactly how investors should approach tacticals as long as the long-term thesis still holds....
"we investors look for such opportunities to buy low and then sell higher."
I have used nothing but Apple computers and phones. Although for a short time I enjoyed blackberries, and still think they were the best. I noticed their products have diminished in quality. The geniuses at the Apple stores are more interested in up-selling then they are helping you with your computer issues. If I were an investor I would consider pulling out.
I started off with a Blackberry! Loved it for a while until the large screen smartphones took a hold of me.
I loved how you could type on them very easy with two thumbs! I guess they are no longer available, but I just loved them! 📱♥️ Thank you for another great thoughtful post!
Thank you soooooo much! Sending you a big virtual hug AudioPhiliac! 🤗
I remember the days when you could take your Apple down to the local Apple store and have it repaired. Walk right in and get service. Now you have to make an appointment with one of their so-called geniuses, which do nothing but try to upsell to you. None really know their product in my opinion. That’s the experience I’ve had with them.
Simply the amount of material churned out will drown and wash over 5000 years of recorded history.
Without context there is no meaning ..
https://www.artpal.com/info295?i=300501-137
I was one of the leads on the Vision Pro/technology development team at Apple.
It’s kind of disheartening to know that you can work on designing and launching the most complex consumer hardware product ever and still have your stock price fall haha.
Especially given how difficult it is to scale physical products.
Yep. To expand on your last point further - I believe the differences between Apple fans and non-fans are widening because fans who upgrade their phones in less than 2 years have continued to do so but folks who hold their phones for 2 years or more are now holding their iPhones for +3 years.
Like I pointed out earlier, Apple mostly either upgrades the iPhones hardware with better processing (chips), high screen resolution (screens), or better camera lens. Apart from that most of the other upgrades have usually been with on-phone processing such as picture resolution, or sound enhancements or stuff like that. So may be it points to what you mentioend earlier about in another way that people dont benefit from hardware upgrades.
https://appleinsider.com/articles/23/05/10/people-are-now-holding-on-to-old-iphones-as-long-as-they-did-pre-covid
About the feature you mentioned - to easily move iMessages and photos to another phone or device... I believe Google's Android is a seamless service to do that. I ve used this before. Was this what you were talking about?
https://www.android.com/intl/en_ca/switch-to-android/