Ten reasons why Apple is approaching a queue ...

Ten reasons why Apple is approaching a queue …

March 23, 2014

IPhones are Apple’s main engine: they generate 68% of its revenue. But right now the global demand for this product is slowing down: sales grew by less than 10% last quarter.

According to Wedge Partners analyst Brian Blair, Apple doesn’t actually find any real new buyers for its new iPhones: Those who buy them simply replace their old iPhones. Blame it on Apple’s conviction that the best gadgets always win and its strategy of keeping its product prices at a high level to make them profitable, says Edwards. It insists that this is precisely the reason that hinders its progress, especially in markets such as Brazil or India.

If everyone who can afford an iPhone has already bought it, who will Apple continue to sell it to? “We are entering a world in which only cheap and quality gadgets have an outlet”, emphasizes the analyst.

Apple is becoming a kind of Microsoft

Apple invests more in bonds than in new technologies, emphasizes Edwards. A recent example is the $ 50 billion invested in US Treasuries and the $ 14 billion it plans to invest in its own stocks to motivate their prices to rise. Ben Reitzes, an analyst at the international financial services giant Barclays PLC, doubts that Apple continues to be a growing company. Rather, you believe you have embraced the Microsoft ‘way of life’ – your customer base is so large that it generates revenue from inertia rather than from groundbreaking new products.

Tim Cook doesn’t seem like a genius

“The CEO of Apple is a very professional manager: an incompetent person would not have made the company $ 170 billion,” says Edwards. He stresses that the company is experiencing a quiet period with Cook: there are more modifications to existing products than new launches. Yes, there were some innovations, such as Touch ID technology, based on the user’s scanned fingerprints, or the OS X Mavericks operating system. But none of these innovations is a ‘boom’ like the one that supposed the iPhone, for example. Cook may be a good CEO, but he’s not an Apple genius, the columnist concludes.

Apple will lose its best employees

The demand for Apple employees in the job market is so high that the company is losing its specialists one after another. For example, Tony Fadell, one of the creators of the iPod, left the company to start his own business, Nest, which he later sold to Google for $ 3.2 billion.

Apple could lose the tablet war

In the fourth quarter of 2013, Apple’s iPad share of the global tablet market fell from 38.2% to 33.8%. Samsung, on the other hand, grew almost 6% in the same period (although it is still a much lower index than Apple’s). “There is not a single company that wants to repeat the path of BlackBerry in the tablet market,” says Edwards, and recalls that BlackBerry ‘smartphones’ are still very good and still have supporters, but they are no longer a product of masses.

Android conquers the tool market

It looks like Apple will miss out on the great era of tool growth, the analyst argues. Android (the operating system for ‘smartphones’ and Google tablets) already offers more tools than the App Store. “In applications, the size of the user base is key: the tool with the most users wins. That is why Facebook bought WhatsApp with its 450 million users and Zuckerberg wants to provide free wi-fi to developing countries. And it’s the abundance of tools that makes phones fun, not their underlying operating system, but Apple gave Android entire countries, like Spain, for example, “he stresses.

Samsung gains ground

Samsung is becoming a real competitive threat to Apple, Edwards argues. Yes, it is “simultaneously launching a bunch of new products against the wall in the hope that one will be successful, but that strategy seems to be paying off,” the columnist opines. At first, Samsung was known for making really pitiful phones at mid-range prices. In recent years, however, it seems as if it has copied all of Apple’s elaborate tricks and given them a nuance of its own: As a result, it is advancing in the market. In addition, it is developing its own operating system.

Google works on all cylinders

In the last three years Apple has not made any takeovers or sensational purchases. Yes, it acquired Topsy, a Twitter analytics company, and Burstly, a company that tests and distributes software, and a few more, but none of these transactions caused a furor in the market. Meanwhile, Google bought British AI startup DeepMind, thermostat and smoke detector maker Nest, and eight robotics technology companies, including Boston Dynamics, the most famous designer of military robots for the Pentagon. Against this, Apple’s ambitions seem much more modest.

iWatch may fall victim to bureaucracy

It is possible that this year Apple will present a smart watch. But will it be successful? To compete with Fitbit and Samsung Gear, the iWatch will have to be really cool. In addition, cell phones every day monopolize more functions than wrist watches.

via Ten Reasons Apple is approaching collapse.

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