Agree. That’s my main reason for my decision to no longer buy Apple products. They’re stupid expensive.
And this today:
Although I’m convinced Google, Microsoft, etc all do the same sort of thing.
Blackberry. Nokia. What makes you think Apple is immune to making terrible decisions regarding their phones. They’ve almost shit the bed before back in 1997 when they were bailed out by Bill Gates.
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I don’t mean that they will make bad decisions, or that their phones are crap. I just mean that the brand has become such an indelible part of their diehard fans lives that they can do no wrong in their eyes. Branding is much more powerful that quality components, unfortunately.
Your perception or the general public is skewed by your maker-ness. Apple users want Apple devices, repair comes second. This is not new. Back in the late 1980s our departmental administrator at UT Austin needed a memory upgrade for her desktop Mac and she was horrified at the need to open the case to give her machine a much-needed boost.
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The Onion - Apple Presents the new MacBook Wheel!
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As a corporate lawyer, I can tell you that they 100% do. They’re supposed to. The only reason that customers matter at all is because keeping them happy helps make the business owners rich. Private for-profit corporations aren’t supposed to be public charities. Can’t blame a dog for being a dog.
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I understand that. But the best way to keep stock prices up is to offer a good product to your customers. At the end of the day, Apple will burn through its reserve eventually and won’t be able to pay it’s dividends and buybacks
without a happy customer base to buy their products and services. Financial engineering works for the short term, but there is a reason why more and more people, even in the US, have decided their phone is not worth it and have escaped their ecosystem.
Because of bad products? “Chrysler” is still a thing. Apple will be fine.
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“Chrysler” was bought over by an Italian company and the combined entity is worth 1/40-1/30 of Apple
Having run a business as the CEO and majority shareholder for a multi-million dollar enterprise here are my rules for a successful business:
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Cash is king - never run out of it, ever. You will find yourself unable to pay your creditors, employees, or vendors. This is the most important rule. Apple has plenty of cash.
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Your first corporate priority is your owners/shareholders. If they are unhappy they will sell your stock, your company or fire you as the CEO at the very least. You may not want this to be the case, but it is. These are also your investors and they can help you raise money if you need it. See #1 Capitalistic, for profit enterprises are NOT charities. Don’t ever think that they are.
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The next most important group are your employees. This has been hotly debated given the trend of out-sourcing labor costs, but all of the GREAT companies believe this. Invest in your employees, promote them, encourage them, train them. They ARE YOUR best ambassadors and they are the face of your company to the customers and the public, particularly in the product support area. This is doubly true for service companies. How many customers will listen to you as a company if you mistreat the people who take care of them? Lousy employees make for a lousy company.
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You next most important group are your customers. Everyone in the other two groups should treat them as if they are ALL that matters. Some customers, however, you DO NOT want. They will drain your resources, libel you and eventually leave you. They are the customers who have the lowest economic return, too. You should encourage them to seek out your competitors. Many a CEO has said all customers matter. THEY DON’T. Some just flat suck as customers. I promise you Apple has identified their customer base and they are not targeting the commodity customer looking for cheap product. They couldn’t care less about this customer.
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Process management is important. Everyone in the company should be looking for ways to improve customer service, reduce costs and make your business more efficient. Everyone not just the management. Your competitors are trying to do this everyday. Learn from them and do it, too. If you don’t you’ll soon run out of cash and your companies days are numbered. See rule #1. If you don’t value your employee’s input you’ll lose them. See rule #2. If this happens you’ll lose your customers. See rule #3.
Apple has been a major success because they’ve been successful at ALL of these rules. I don’t see them doing anything currently, short of losing a few customers on price, that will affect how I invest in them. They have an almost cult following for their products, a very high focus on quality products and services and they focus on the customers who are willing to pay for it resulting in very high margins in an industry fraught with minimal margins. When was the last time a MAC OS had a blue screen of death? or a major virus problem? Admittedly, Jobs was responsible for much of this and Microsoft did bail them out a while back, but they are now stronger than ever.
I own a Mac, an iPad and an iPhone. I also own several windoze products, RPIs and other linux devices and a number of micros like Arduino and Parallax stamps. I love these for their hack ability and the Apple products for their stability.
I considered getting a Samsung phone one time only because of the VR demo I saw at a conference. Technology is always moving fast and it is fun to be a consumer, even an early adopter.
Ever heard of planned obsolescence? Auto companies have been trying it for years. How do you get people to buy another phone when everyone already has more than one? Maybe you just lock iPhone batteries 
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Eh, think this was less a reference to FCA and more K-Car.
Yup. They should’ve died back then.
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Their cult following is primarily concentrated in the US, where people are capable of paying those prices. Their market share is getting chipped away in China and Europe. They are almost nonexistent in India. That isnt going to help them keep their services business growing.
Cook isnt Iacocca. Apple will survive forever because they print money, but they will probably stagnate.
There is something to be said for building a commodity product, especially if it is subsidized by a government, but it also means that if they have a quality problem, a security problem or any other management problem it affects two thirds of the world.
Also, what happens if the company decides to hold them hostage because they are an effectual monopoly?
I get it though. There are billions to be made on the Asian continent selling commodity phones, but they have a different kind of culture which values price above all else. They also don’t have the disposable income of the US, which is changing.
That’s why it is fun to look for these opportunities and invest accordingly.
I was thinking more along the lines of Apple using older components to build a much cheaper phones(maybe Mango and Pear for mid and low end) that use a modified Android or another operating system. They would be able to load their own apps such as Apple Music and use the App Store platform with a different name(instead of Google Play call it it Mango Play). They would still be able to make the phone cheaper than most companies because they already own the older chip designs and have the volume with manufacturers. They could expand their services business without compromising on Apple margin and status.
In India, they are building older iPhones now to get market share. This dilutes the luxury value because people can buy a $400 iPhone and a $1400 iPhone. If they sold the cheaper phone, they could eliminate the cheaper iPhone without having to give up on the market.
They have 10s of billions in the bank. They could probably just buy a Chinese phone company and have them develop the phone while they develop their own platform.
All very good ideas. As you might expect Apple will have to consider all such alternatives in concert with their strategic objectives and goals. They probably already have evaluated the opportunity since it seems so obvious. Maybe we’ll see this happen sometime soon, but I wouldn’t buy stock in Apple expecting them to do this.
OTOH, Amazon, Google, Microsoft and yes even Apple have all done the corporate merger and acquisition game from time to time, so maybe they will again. Certainly, having the cash Apple has on hand makes this an easy thing to do.
I am staying straight out of Apple stock. A company that prioritizes returning cash to investors over finding ways to grow value is a big no is my book. Cook is looking very short term on how to keep the stock price rising, while companies like Amazon arent afraid to burn money for the long term. Bezos keeps dumping money on infrastructure, like 1-day delivery. Many investors dont like it because it costs a lot but doesnt show an immediate return. But this philosophy is why Amazon keeps growing.
I remember when Google announced Google Fiber to great fanfare in the technical press. A well-resourced company with purported immense technical prowess was going to break into the ISP market and show those incompetent incumbents a thing or two. But flash forward to now and Google Fiber is something the company seemingly just wants to forget:
- The installation process was slower than expected in spite of securing all sorts of sweet permitting/regulatory exemptions
- Google was not prepared for the incumbents insisting that they follow the regulatory/permitting hurdles that remained
- When the going gets tough, the tough pull up the stakes and flee the scene
But behind all that was a management structure, company culture, and investor expectation that Google behave like the advertising company that it is - quick returns on projects lasting a year or two with minimal capex, automation of almost everything possible, and support structured around B2B relationships rather than B2C. Last-mile residential infrastructure is pretty much the opposite of all these - especially the ROI which you’re extremely lucky to see within 5 years. Heck, Verizon - who deploye3d what is almost certainly the largest fiber-to-the-prem residential broadband network in the nation - lost interest after ~5 years and intense investor rage, turning to wireless with its >quadruple margins and predictable 2-year cycle of customer acquisition, profitability, then re-negotiation.
So. Back to Apple. Their investors first and foremost expect margins - the kind of margins that you’re not going to realize in the middle and lower tiers of the mobile phone market. They’re also interested in building a relationship with their customers vis-à-vis their relatively exhaustive ecosystem of interrelated complimentary products. Speaking to many Apple customers they feel the same way and happily build the inertia that leads to this sort of lock-in - in the case of their various iProducts they’re carrying around a ~decade of ITMS content and App store purchases over the years along with Apple’s cloud and other conveniences.
Contrast this with Android. I haven’t paid for an Android app ever and I gather this is true for a large percentage of Android users, if not a majority. When I’m shopping phones I don’t have loyalty to a specific OEM. I rip MP3s from CD and load them directly onto my phone, bypassing content stores. To the extent I have a relationship with anyone in this system it’s Google whose backend systems and offerings are what makes Android what it is for most users. To do this, the situation is very much like the Wintel situation in desktop PCs where of the 3 major vendors involved in the sale of a branded PC two made real money - Microsoft and Intel - while the PC OEM made subsistence profits; in the case of smartphones, Google makes money on monetizing users over time, Qualcomm (or the Soc vendor) makes good money on the critical silicon in the phone and the phone OEM is largely in the same situation as PC OEMs.
Apple’s market segment in the iProduct realm may not be growing and Apple has in the past been keen not to simply be the iProduct company. Their infamous, staggering horde of cash kept in various countries suggests they’ve been at a loss for what to invest in for some time now. They’ve reportedly dabbled in long-shot experiments much like Google - albeit without the publicity. They can afford to bide their time for now. Whether they’ll be forced out of their upper-end niche or not remains to be seen.
American Investors over the last ~20 years or so have developed a set of tendencies that are best attributed to speculators with their insistence on unreasonably rapid returns, only with the temerity to insist on consistency as well.