Apple is going through hard times: the demand for new iPhones leaves much to be desired, and the share price continues to fall. CNN journalists tried to figure out what was wrong with the current policy of the company, and what needs to be done to regain its leading position in the market.
Is Jobs' successor the problem?
After the death of Steve Jobs in 2011, analysts were positive: Jobs' successor, Tim Cook, would not be able to save Apple from the expected decline. However, their expectations were not met. Cook turned out to be an excellent organizer who managed to create a partner network and increase sales of the company's products through lucrative contracts with other corporations and the development of popular projects.
Everything changed in 2018 when the new iPhone didn't manage to take the market of mobile devices by storm, and the company's shares began to decline in value noticeably. Shipments and production of the iPhone are also reducing.
Stagnation and lack of innovation
So what went wrong? According to CNN journalists, Apple’s main problem is the lack of innovation. The iPhone 8 in many ways repeats the design of the sixth model. Approximately the same situation is observed in the development of other products of the company. It is hard to imagine such a problem appearing under Steve Jobs, who was ready for changes and reforms that would benefit the users. The main difference between Cook and his predecessor is the lack of courage to present truly new products.
Tim Cook, basically, focused on profits and actually succeeded. For example, for the last year, the company's profit amounted to $88 billion, and net income exceeded 20 billion. But in 2018, users seem to have grasped Apple's thirst for profit and realized that the company annually launches almost the same devices on the market. This led to a decrease in sales of smartphones. Apple fans don't really like the prospect of buying a new iPhone with the same features its predecessor had, and which, in addition, is much more expensive.
Apple has practically reached the “innovation stagnation”: the company doesn't present truly new devices with breakthrough technologies, and it, of course, affects the business negatively. Now it focuses on the development of services and affiliate programs, but, as sales show, this policy hardly helps the company to raise the sales of their devices. At the same time, Apple still positions the iPhone as an engine for mining money - but this engine can break down if it is not improved in time.
A competitor as an example to follow
The main competitor of Apple, Microsoft, has already faced a similar problem. At the beginning of the 00s, Microsoft also experienced a crisis but was able to get out of it thanks to the expansion of Office support, making it free for some devices of other manufacturers. The new Microsoft executives have done everything possible to develop cloud services, and this has helped them to become one of the most successful American IT companies. Microsoft realized that Cloud technologies could be in-demand and users might need it, so they decided to use it.
The situation with Apple, however, is slightly different: unlike Microsoft, who are getting their main profit from programs and services, Apple’s revenue comes from sales of iPhone, iPad, Mac and other devices. Experts agree that Cook's company should pay attention to the activities of Tesla and also engage in the construction of electric cars with autopilot. It could also be useful if the company reduced the prices of devices. The current price of an iPhone (around $1000) pushes away many potential buyers, who tend to control their budget.
One more thing Apple can do is to create low-end products, for instance, an affordable version of iPhone. That way the new XS and XS Max will keep the status of luxury devices, and at the same time, the company will discover a new segment of the market for low-end and affordable devices. Otherwise, if Tim Cook will decide to avoid making certain alterations to the price policy and go without implementing some new technologies, Apple risks suffering the same fate of Nokia. In other words, the company has a great chance of becoming an outsider, or, at least, losing its leading position.