On Wednesday, Apple Cook released a statement declaring things were not as nice as the company would like; instead of a projected $89 billion to $94 billion in revenue, it expected to earn a paltry $84 billion in revenue during the previous quarter. That might read small in text, but we should all be able to agree that $5 billion is actually quite a bit of money. And in response, Apple’s stock has suffered a sharp decline, there’s a company-wide all hands at 9:30 this morning Pacific Standard Time, and there are takes aplenty.
Everyone seems to have an opinion on why Apple missed its revenue goals and/or how it can get back to being the wealthiest company on the planet, and what you should do with any Apple stock you own or were thinking of owning.
Unsurprisingly, the most popular take seems to be in regards to Apple’s phones. Which makes sense. iPhones are a major part of Apple’s business, and a bad phone, or an unpopular one, is a large contributor to the missed revenue goals.
In a memo to Apple employees, CEO Tim Cook specifically pointed to a failure to sell iPhones in China as the reason behind the company’s $5 billion shortfall. People in China apparently just stopped buying into the Apple ecosystem.
The why of that has led to a wide variety of opinions. From Trump’s trade war to China’s slowing economy to the competition from phone makers like Huawei to the simple fact that China doesn’t have the same loyalty to brands as America, and thus saw no reason to drop $1,000 on a phone.
But despite the Chinese market’s clear role in Apple’s reduced revenue, it hasn’t stopped Americans from bemoaning their own failures to upgrade.
Or the failures of friends and family.
But the overwhelming consensus seems to be that as much as a trade war with China and poor international iPhone sales are to blame, the fault ultimately lies with Apple, which maintained high prices on a plateauing technology that is rapidly become a commodity and thus can’t justify the high price. Basically, Apple screwed up its pricing strategy.
As reported by Business Insider, Goldman Sachs analysts claim Apple “miscalculated on the price/feature balance”.
Related to the belief that iPhones are too expensive is the belief (pushed by Apple in its warning yesterday) that iPhone repairs hurt Apple’s bottom line. Truly a shocking sentiment—repairing a phone when the alternative is spending $750 to $1,000 for a new one?
It is, in fact, not shocking. And the peanut gallery, armed with a Pokemon meme, are inclined seem inclined to agree.