The IT Nerd

It is crystal clear that Apple is in trouble. They’ve issued a rare earnings warning along with missing the ship date for AirPower, and they’re offering hefty trade in values to get you to buy one of their latest and greatest iPhones. Plus the quality of their software and hardware is perceived to be in the toilet. And that’s just the stuff that I came up with at 8AM this morning. But the real question is this. Can this be fixed? The answer is yes. And if I were Tim Cook who is the CEO of Apple, this is what I would do:

1. Admit that you have a problem: Cook told CNBC’s Jim Cramer the other day “I think Apple is not well understood in some of Wall Street.” No. You’re dead wrong Tim. The problem is you don’t see that there’s a problem with Apple. You haven’t asked yourself what is it that you’re doing wrong as a company that is causing you to be in the situation that you’re presently in. Cook really needs to take a good hard look in the mirror and figure out what he needs to do to get Apple back on track. Not only that, he needs to be honest with himself and not drink the Kool Aid, nor should he stay in Apple’s famous reality distortion field while doing so. Because neither of those will help him to put Apple back on the rails.
2. Do something about the iPhone being so expensive: When I reviewed the iPhone XS I pointed out that the prices that they were asking for it were some people’s mortgage payments. Even the iPhone XR is not exactly cheap. Though Cook doesn’t see it that way in that interview with Jim Cramer. But here’s what Cook is missing. The smartphone market is mature. Groundbreaking new features don’t show up as often, and you’re now able to hang on to your phone for three or four years as opposed to having to flip your phone for a new one every couple of years as there is no compelling reason to replace it. Thus Cook and company would be well advised to cut the price of their iPhone lineup and do it now as that would actually get people to buy their phones. And I am not talking of doing it via those hefty trade in values which are rebates on a full priced phone. I mean that they need to actually cut the price of the phone.
3. Apple needs a true budget phone: Apple isn’t going to sell a phone in India or China if they don’t have a phone that is affordable. And no Mr. Cook the iPhone XR doesn’t count. They need a phone that is sub $500 CDN if they have any chance of cracking those markets. Call it an iPhone SE-2 or something. Right now they don’t and it’s costing them. That same phone could also be used in more mature markets like North America and Europe to broaden their appeal.
4. Apple needs to fix their quality issues….. NOW: Whether it is #BatteryGate, #KeyboardGate, the latest version of #BendGate with the iPad Pro, or the numerous bugs in iOS 12 which keep people from accessing WiFi and mobile data, it’s clear that Apple’s software quality has been a dog’s breakfast going back at least two years. And clearly their hardware quality isn’t up to the standards that the late Steve Jobs would have expected from the company. That needs to be fixed now because you can’t charge what Apple does, nor can Apple expect to score the sort of margins that it likes to brag about on their quarterly calls if the products are perceived to be of sub par quality. Thus this needs to be addressed immediately.
5. Health and services aren’t the magic bullet for Apple if nobody outside the USA can use them: Cook in this interview said “I do think, looking back, in the future, you will answer that question, Apple’s most important contribution to mankind has been in health.” And he pointed to a shift to services with new ones on the way. Which I am guessing is their rumored TV streaming service. But neither health nor services are going to be the magic bullet because those only work when everyone can get their hands on them. It takes Apple forever to roll stuff out outside the USA. Apple Pay is a prime example of that where that has taken years to get to some parts of Europe. Apple Music on the Amazon Echo devices is USA only the last time I checked. And nobody outside the US can use Apple Pay Cash, and the killer feature of the Apple Watch 4 which is the ECG function is nowhere to be seen outside the USA. Now the latter item is understandable as there’s regulatory hurdles to be hopped in every country they want to use it in. But it doesn’t help them to leverage their ecosystem to make money. Apple’s ecosystem has be fully accessible to as many people as possible which means those at Apple has to do a much better job of getting them to as many people as possible as fast as possible.

Do you agree or disagree? Did I miss anything that Apple should be doing to pull themselves out of this mess? Please leave a comment and share your thoughts.

This entry was posted on January 10, 2019 at 8:59 am and is filed under Commentary with tags Apple. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.