Ignore the opening paragraph, which is a rant on “armchair CEOS” and “doom and gloom”, read the list itself. Some thoughtful points.
For me, this point stands out:
Installed base of active devices grew by more than 100 million units.
This demonstrates how Apple’s brand tends to keep users within the ecosystem, rather than losing more of them to competitors. Year over year growth for Apple’s services are largely dependent on increasing the overall active installed user base, so this bodes extremely well for Apple’s services sector going forward.
My 2 cents, perhaps uninformed, but it’s what I got:
The smartphone market is, like the PC market years before, growing saturated. The big win features for smartphones have arrived, new features are incremental, not revolutionary. Most people have what they need.
As has been pointed out by many biz bloggers, Apple is shifting their focus to Services. And this new business model grows relative to the installed base of active devices.
Short term, pricing issues and trade wars are bringing the pain. But as long as Apple continues to grow its installed base, I think they’ll turn this giant ship in that new business direction and the business model will find a new point of stability.
FWIW: the smartphone market is saturated in the developed world, but *not* in the developing world. (This is different from PCs, which never really had a big market in the developing world.)
Apple is not a major player in the developing world right now, although they want to be.
I’ve always used a Mac, too, as well as an Apple ][ before that. I’ve loved every Mac I’ve had, which is a rather large number.
I also love my 2TB iCloud Drive and my Apple Music subscription. After all these years of struggling with storage, iCloud Drive gives me what I want, along with a nice secure feeling. And Apple Music allows me to explore new artists without having to buy albums.
Then there’s Apple Care+ which we routinely buy with new equipment. When it came to the Titanium Power Book, it came in handy just in the nick of time before the warranty expired to give me an essentially new machine with logic board and display replacements. And the same went more recently when our MacBook displayed a battery warning. We got new guts again.
As far as trade wars go, I think a lot of the dust will settle out sooner than later, and I’m looking forward to Apple’s repatriating that $350B in the US!
“Apple is shifting their focus to Services. And this new business model …”
I realize that this seems to be Apple’s future, but I can’t say that I’m enamored of it. As a guy who has always used a Mac, since the Plus, it just doesn’t seem “my” Apple. I mean, IBM is essentially a services company, now. IBM! The last letter used to stand for “Machines”!
But then, I’m not a shareholder (at least not directly), so…
Also, get off my lawn!
“Short term, pricing issues and trade wars are bringing the pain.”
Also — growth is slowing, a lot, in China. And it’s not going to stop there. We’re almost certainly less than 12 months from a recession.
If they shift their model to be services centric Apple will die off over the next 20 years. Not die as in not exist, but they’ll be irrelevant, one of many players.
However, if they use services to augment the value of their hardware products and to give customers compelling reasons to buy Apple products in a given niche, they’ll be fine.
The fact is that services isn’t really Apple’s strong differentiator. Does anyone use iCloud’s version of office apps? I’m sure some do, but that’s a market dominated by MSFT and Google. Search? Big G. Photos? If you’re OK with Google seeing them, Google Photos is great.
But all of Google’s services are built to work mostly independent of the hardware you have. Same for MS.
Apple’s difference has always been their products. From tiny design details to an entire experience that’s just engineered to be ‘insanely great’ Apple lives and dies by it’s products. When they forget these standard, as during the 90s, they fail. So, if they can tailor services to augment the value of Apple products and create things that know about each other and that make owning several products from Apple a great experience they’ll be in a great position. If not… they won’t be.
They can’t be at their current price level and to offer anything significantly cheaper than the 7 ($450 US) they’d have to find a way to not sell it in developed nations or they will take a margin hit here. Also, can they really deliver a premium experience for, say $200/unit?
in any event, the overall point stands… growth is slowing and there are no big new features that everyone will want ASAP. My XS Max will last at least 3 years, probably 4, maybe 5. I don’t see a reason, feature-wise, to upgrade anytime soon.
Apple has, in fact, sold old iPhones at lower prices only in non-developed nations in the past. So they could totally do it.
I have the same problem as you with the X. It’s still a great device and I feel absolutely no pull to upgrade. Maybe ~2-3 years of camera advances might, but the XS isn’t quite that yet. If the next-gen were to incorporate e.g. Pixel Night Sight, that might tempt me.