Posted on: 29th May 2013 by: Dokoo
n today’s article in Mashable http://mashable.com/2013/05/28/tim-cook/, Tim Cook defiantly rejected the assertion that Apple is in trouble and that it is not seen as ‘cool’ as it once was. Let’s look at the facts.
Apple’s stock value has dropped in recent months despite an impressive first quarter in 2013. The company sold 37.4 million iPhones, beating analysts’ estimates of 36.5 million, and it sold 19.5 million iPads, against an expected figure of 18.3 million. The company’s pre-tax profit reached $9.5 billion.
By most standards, these are extremely strong figures. However Apple has largely been a victim of its own success as the expectation among investors is so high because of the unprecedented profit during the later years under Steve Jobs. Aside from the relatively decreasing profit margins, the emergence of credible competitors such as Samsung, have investors worried.
When asked to explain the fall in stock prices, Cook quite rightly said that stocks often go in cycles of highs and lows. In relation to the emergence of competitors such as Samsung, Cook responded that throughout the company’s existence it has competed and succeeded against companies such as Microsoft and Dell.
One of Apple’s long standing selling points is its much stated 'cool factor'. When asked if Apple losing its coolness? Cook, pointed out that satisfaction ratings for the company are currently ‘off the charts’, as are usage of Apple products. He went further to say that over the past year it has come out with an unprecedented number of new — and well-received — products such as the iPhone 5, new iPods, and new Macs.
Cook has called the Apple economy “the strongest ecosystem in the business,” i.e. the biggest and most profitable one. Apple’s quarterly earnings of $9.5 billion dwarf those of Google and Facebook, its two main rivals in Silicon Valley. These big profits reflect Apple’s global scale and its ability to charge premium prices. Additionally, owners of Apple products will often buy other Apple related products as they are reluctant to change brand.
So what about the future?
For the foreseeable future Apple will probably continue to enjoy a large monopoly of the smartphone and tablet market in North America and Europe. However dominance in the African and Asian markets, may be a different story with a more price conscious consumer base with many of whom are opting for other more affordable products.
I think talk of Apple’s declining influence is premature. I think what most people would welcome is for Apple to innovate once more and recapture that magic of the first iPhone release. What would this game changer product look like? Some have touted the iWatch could be the next big thing. With the emergence of the well-received Google’s Glass, ‘wearable’ technology, may be the next battle ground.
The battle lines are drawn. Apple will hope that a new product will help keep the competitors away!
Peadar is a project manager @ Dokoo
Enter your email address below: