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Ailing iPhone Business: Apple in the Midlife Crisis

2019-09-11T06:43:28.400Z


The iPhone boom has long since evaporated, Apple's sales continue to fall. The problem: The group must conquer new business areas in which strong opponents wait.



Mike Bostock was one of those for whom Christmas took place in September: whenever Apple presented its new iPhone model. He used to line up in front of the stores on the first day of sales, the 40-year-old from San Francisco told The Washington Post.

Meanwhile, he only gets a new smartphone every few years. The start-up entrepreneur has lost the joy of buying. "I'm not thrilled anymore when a new phone comes out," he says.

Now the Apple has to Group still learn what has long been a reality for many customers: live without iPhone enthusiasm. The product, to which the Group owes its rise to become one of the world's most successful brands, still accounts for around 50 percent of sales. But customer habits have changed, convincing innovations are missing, and the market is saturated. For three fiscal quarters, iPhone sales have shrunk, most recently by 13 percent yoy. The now presented iPhone 11 is likely to change the trend little. At best, the next year expected introduction of a 5G version for the next mobile standard could once again provide adrenaline in the balance.

Apple wants in the everyday life of customers

Apple boss Tim Cook knows this is not enough to justify a market capitalization of nearly a trillion dollars. He has therefore ordered the company founded in 1976 a rejuvenation, even before it gets into the mid-life crisis. The hardware manufacturer is to become a service provider. Apple wants to play in the future wherever digital future business lures:

- using the Apple Card and Apple Pay for financial services ,

- with the streaming of music and videos,

- playing in the entertainment industry ,

- in the car with the virtual passenger Apple Carplay

- and of course in the all-round networked Smarthome .

All of this should work together perfectly. The Apple world could become the 24/7 home for its users.

In the headquarters in Cupertino, the implementation of the new strategy is on the right track: In the third quarter, the iPhone contributed for the first time in years less than half of sales, at the same time booked the services division, to the App Store and The iCloud is a whopping plus of over twelve percent.

1.4 billion Apple users

Even better, though, was the wearables like the Apple Watch and the AirPods. This division alone is now "larger than 60 percent of Fortune 500 companies," said Cook. Nevertheless, the consolidated profit shrank by 13 percent compared to the previous year. That may also be the reason why the new iPhone comes on the market cheaper than its predecessor. Apple wants to boost sales. So you offer the customer also to take their old iPhone carrots in payment.

The analysts like what they see there. Since the beginning of the year, the stock has risen by almost 40 percent. Apple has done a lot of things. In the new business areas, the new competitor encounters established top dogs.

So Apple lies down with its new streaming service with the giant Netflix and Amazon Disney has also announced a similar project. Cook relies on the iPhone users to follow their provider faithfully into the new realms. 1.4 billion people worldwide would use an Apple device, he said in July - a gigantic pool of potential users of future services. The fact that Apple sells its video offer at a bargain price of $ 4.99, caused on Tuesday for losses of the competitors. The confidence in Apple's future seems great.

Trump has spared Apple so far

But still life without iPhone is just a vision and the problems present. From December, according to the will of Donald Trump, a 15 percent import duty on laptops and smartphones from China will come into force. Apple would be hard on it: most manufacturing is in the Far East, and America is the main market.

For a long time, Cook convinced the US president to spare his industry in the trade war. The Apple boss is "a great manager," Trump praised after a dinner at his golf club: "Because he calls me, and others do not."

But the charm offensive comes to an end. If the tariffs apply, Apple can choose whether to pay the additional costs or pass them on to its buyers. The first variant would probably reduce the profit by 0.50 dollars per share, Daniel Ives has calculated by the investment firm Wedbush Securities. The second option would not be much better - sales would fall by up to eight million units. That, too, is due to the profit.

Comforting for Apple: The Christmas business in America would have gone by then. Also for those who have not waited for the new model before loading.

Source: spiegel

All business articles on 2019-09-11

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