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Tim Cook to Investors: People Bought Fewer New iPhones Because They Repaired Their Old Ones (vice.com) 488

On Wednesday, Apple CEO Tim Cook issued a dire warning to his investors. Apple, the world's first trillion dollar company, lowered its revenue forecast for the first time since 2002, thanks primarily to China, he said. But there was at least one more issue at play.

Motherboard: The lengthy letter cites, specifically, that people are buying fewer iPhones because they are repairing their old ones. Apple has long fought efforts that would make iPhones easier to repair: It has lobbied against right to repair efforts in several states, doesn't sell iPhone replacement parts, sued an independent repair professional in Norway, worked with Amazon to get iPhone and MacBook refurbishers kicked off Amazon Marketplace, and has deals with electronics recyclers that require them to shred iPhones and MacBooks (as opposed to allowing them to be refurbished.) The Department of Homeland Security, meanwhile, has seized iPhone replacement parts from prominent right to repair activists in the United States.

[...] Apple has never clearly articulated why it doesn't want people to fix their own iPhones or to have independent experts repair them. It has previously said that iPhones are "too complex" for users to repair them, even though replacing a battery is pretty easy and is done by average users all the time. But the fact that repair hurts Apple's bottom line came out in Cook's official communication with shareholders, who he is legally obligated to tell the truth to.

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Tim Cook to Investors: People Bought Fewer New iPhones Because They Repaired Their Old Ones

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  • by Narcocide ( 102829 ) on Thursday January 03, 2019 @01:19PM (#57899436) Homepage

    If they lose revenue when people can't repair their hardware, then the replacement costs are hurting the global economy and this needs to stop. Period.

    • by wwphx ( 225607 ) on Thursday January 03, 2019 @01:23PM (#57899458) Homepage
      Tough shit, Apple. I'm content with my iPhone 6 and see no need to upgrade to something beyond a 6S as I don't want to lose my headphone jack. Plus, I may upgrade to a 5S as I like the smaller form factor. YOU. ARE. NOT. MAKING. A. NEW. PHONE. THAT. I. WANT. Fix that and include a headphone jack and I may consider buying a new phone.

      Further proof that Apple has been taken over and is being ruled by MBAs rather than innovators.
      • Yeah, isn’t the phrase, “The quickest way to stifle innovation in a company is to put an MBA in charge”? We’re definitely seeing that within Apple!
      • by psergiu ( 67614 )

        2017 iPhone SE - last one with a audio jack which fits neatly in a normal shirt pocket.
        Just replaced the battery on mine in December at an Apple Store for $29.
        No intention to get another iPhone for the next ~3-4 years.

        • 2017 iPhone SE - last one with a audio jack which fits neatly in a normal shirt pocket.
          Just replaced the battery on mine in December at an Apple Store for $29.
          No intention to get another iPhone for the next ~3-4 years.

          It's not just Apples either. I have an LG because it has replacable batteries- bought a couple of extra batteries (in case they're hard to find in the future) and I fully intend to hold onto my LG for several years too. None of the phone manufacturers are really innovating anymore- and many are taking features away.

          Everyone is racing to have the thinnest phone and slightest bezel and they're willing to sacrifice functionality to do it.

          • by psergiu ( 67614 )

            Just remember to do a recharge-discharge-recharge (w/ trickle charging) cycle on those extra batteries at least once every 6 months. Or they'll die out in storage.

            • by torkus ( 1133985 )

              You're confusing li-po with ni-cad. Ideal long-term storage for lithium-based batteries is ~60-80% SOC. They don't exactly die out' though - they fall below the minimum voltage that the charging circuits (i.e. safety mechanism) are designed to allow and thus you get the 'defective battery' blinky. On a larger scale - Tesla packs are exactly the same. If a pack goes below whatever single-digit % SOC it's 'dead' according to the computer and can't be charged.

              But yes, tossing it on a charger every few mont

          • by Kazymyr ( 190114 )

            They will have to pry the V20 from my cold, dead hands. And the spare batteries too.

      • I sympathize with you, but once your current iPhone develops a fatal problem, you won't have much choice. [slashdot.org] Compared to 20-or-so years ago, only superficial repairs can be done on modern electronics.
      • by DarkOx ( 621550 )

        Don't buy a 5 series phone. I know the 5 does not and I am not sure about the 5S but the carriers are dropping anything that does not do HD voice next year more than likely. Do yourself a favor and find an iPhoneSE if you want the smaller form factor.

      • by davros74 ( 194914 ) on Thursday January 03, 2019 @03:46PM (#57900472)

        I am in the same boat. I would like a OLED screen, but.... I do not want a physically bigger phone. I do not want to give up the 3.5mm headphone jack (which I use everyday, while charging). I actually prefer Touch ID over the new Face ID garbage. I like having a home button I can physically feel and press without needing to look at the phone.

        But my battery had fizzeled out. Wouldn't keep a charge, kept shutting down when cold. But Apple offered a new battery for $25, so now my iPhone 6 is good as new, and in my opinion, better in almost every way over the current gen models except for the OLED screen.

        Make a phone a I WANT to buy, and at a reasonable price, and I might bite. Until then, I will probably replace the battery in my iPhone6 again 2-3 years from now. I don't care if I stop getting iOS updates.

  • by jfdavis668 ( 1414919 ) on Thursday January 03, 2019 @01:21PM (#57899446)
    Why doesn't Apple offer to repair old iPhones? They could make extra money.
    • you give them your old iPhone (which probably just needs a new battery), they sell you a new one for $100 bucks off. Then they take the old phone and put a $10 battery in it and sell it for $300 in China or India.
      • Yeah, they don't do that.

        They give you that $100 as a token discount to keep the phone off the local resale market. Then it goes into a shredder.

    • Re: (Score:2, Troll)

      by AmiMoJo ( 196126 )

      Apple does repair old phones but the repair prices are usually so ridiculous that you might as well buy a new one. When the repair cost is a significant proportion of the price of a new one people balk at getting a device a few years old fixed. That's just how consumers are.

      Plus they can't really stop other people offering more reasonably priced repairs. They can try, but especially in China (where a lot of the expected sales were supposed to be) there is a huge, thriving market dealing in Apple repairs.

  • I took advantage of the $29 battery replacement on my 6s hoping to add a couple of years of life to it. Might count as a repair since it was sort of "broken" by Apple.
    • that is exactly what apple wanted to avoid: BASTARDS! like you trying to use their property for longer than they expected you too, before shelling out another thousand bucks.

      You da real MVP.

  • Convert (Score:5, Insightful)

    by Anonymous Coward on Thursday January 03, 2019 @01:26PM (#57899480)

    It's not possible that even one converted to Android? No way he'd admit that.

  • But the fact that repair hurts Apple's bottom line came out in Cook's official communication with shareholders, who he is legally obligated to tell the truth to.

    He's not allowed to lie. I don't think there is a legal obligation to tell the whole truth, in fact the obligation on that topic is almost to run the other way, there are things he is definitely allowed, and definitely should not share with shareholders.

    If he's telling them this, it's because he wants some action taken.

  • by Computershack ( 1143409 ) on Thursday January 03, 2019 @01:32PM (#57899524)
    He'll do anything but admit that they fucked up when they priced it at over $/£/€1000. People aren't buying them because they're too fucking expensive.
    • by bill_mcgonigle ( 4333 ) * on Thursday January 03, 2019 @01:47PM (#57899668) Homepage Journal

      If it costs $150 to replace the screen, and a new iPhone is $400, then maybe you wonder about what you should do. Maybe it's upgrade time. But when the new phone is $1,000, just get the screen fixed.

      If Apple has failed to predict this kind of behavior, it needs to hire better economists.

      • by Tablizer ( 95088 )

        If Apple has failed to predict this kind of behavior, it needs to hire better economists.

        Their "luxury" strategy worked for several years: they got bigger and richer. If it ain't broke, don't fix it.

        Well, it finally broke.

      • by DarkOx ( 621550 )

        Its not just the dollars though. Its also a question what you are getting at the margin. The reality for a lot of people is that isnt much at this point.

        I mean a few people are really excited about facial recognition or whatever but the for the rest of us we are getting a 'slightly faster CPU' and little more storage... Well I don't need more storage, I mean why do want to carry around every snapshot I have taken since 2010? what for? I don't really need a faster CPU. The CPU in the iPhoneSE is plenty t

  • Ummm. No.... (Score:5, Insightful)

    by BadJasper ( 5689586 ) on Thursday January 03, 2019 @01:32PM (#57899526)
    People bought fewer iPhones because they jacked the prices up and, didn't give anyone anything new that would justify such an increase. Thereby, negative return on investment. DUH! For people that are supposed to be smart, they sure say and, do some really stupid shit.
    • by hjf ( 703092 )

      Plenty of people (especially in poor countries) see iphones as status symbols. I have a friend shallow enough to pay $$$ for the latest and greatest iphone, because he NEEDS that to stay at his social circles. We live in a third world country where apple doesn't sell its products. He paid about 4 to 6 times his MONTHLY SALARY to get that phone. Hell, an iphone X costs probably 1/4th to 1/3rd the price of a small car here in Argentina.

  • by fabioalcor ( 1663783 ) on Thursday January 03, 2019 @01:33PM (#57899538)

    They Suck.

  • by ErichTheRed ( 39327 ) on Thursday January 03, 2019 @01:39PM (#57899592)

    Apple is very similar to BMW and Mercedes when it comes to this "immersive brand experience" thing. None of these companies want people running around with old phones or cars. They want them on the 3-year leasing treadmill. They want you to basically subscribe to their hardware. To accomplish this, one of the things they do is fight efforts to make repairs economical. Apple basically builds their phones as glue sandwiches and solders all the components onto the motherboard for "design reasons." BMW/MB make the out-of-warranty repair experience painful with single-source expensive parts, so even if you find a good mechanic who charges reasonable labor rates, this sensor or that sub-assembly will cost thousands to replace. The only way to own one of these cars long term is to have the money and not care about spending it, or just throw in the towel and rent one forever in the form of a never-ending lease.

    I think people in the US and Europe will finally get sick of this and realize they're being ripped off now that there's a huge secondary market for iDevices. China and India have huge middle class populations but they're less likely to blow $1100 on a phone than Americans are.

    • by Tablizer ( 95088 )

      I think people in the US and Europe will finally get sick of this and realize they're being ripped off

      You seem to miss the point: their cars are a status symbol. If they become cheap to own, they are no longer a status symbol. If you want something inexpensive and practical, you wouldn't buy nor shop for a beemer to begin with.

      I suspect the demand for such will wax and wane over time for many reasons, but it's a sustainable business model as long as enough people want status symbols to show off.

      Making them

      • When asked how the watch business was going in the face of the new digital devices an executive at Rolex said, "It don't know. We're not in the watch business. We are in the status business."

    • They want them on the 3-year leasing treadmill.
      There's another, more sinister reason for that: not wanting people to actually 'own' things of any real value.
    • by Nidi62 ( 1525137 )

      Apple is very similar to BMW and Mercedes when it comes to this "immersive brand experience" thing. None of these companies want people running around with old phones or cars.

      ??? We just bought a 2011 X3 at a BMW dealership for probably 1/3 what it cost brand new (low miles too, less than 10k a year). Our mechanic who specializes in BMWs said upkeep/repairs would cost no more than our 2001 330i with well over 100k miles that costs about $200-300 a year to keep up. New BMWs are expensive as crap, but older ones still run great, look good, and don't actually cost that much to keep up.

      • Have you test driven a Tesla? What do you think of Tesla as a very long time BMW driver? I would not expect sensible spenders like you to buy a new Tesla. But, if the test drives for 70K dual motor performance version are available, you might have tried. So what do you think?
    • by Anonymous Coward

      Like with the PC. Where one car maker says "fuck it, we're going open", and creates a bunch of interface standards so that everybody can make e.g. a body or a motor or a suspension system for it.
      Obviously it would include all the rules so that any arbitrary combination of parts that are certified to be compatible to this interface are also legal and have a known crash test behavior.
      And there would be a few different platforms to serve the different needs. Because a high performance sports car can't use the

    • Imagine if car makers came out with a new model every year? Suppose Apple had a SE type phone with same basic format with incremental improvements each year (like a '2019 SE') they would sell a bajillion of them, because consumers for the most part DONT like change. Only a small percentage of users wet their pants over new features. It would be an open admission that 'our phones are just about perfect, so why do we need a new model?'
  • by schwit1 ( 797399 ) on Thursday January 03, 2019 @01:39PM (#57899600)

    Saudi Aramco was valued over $1T years ago.

    • ...by Saudi Aramco, not on the open market.

    • by Zocalo ( 252965 ) on Thursday January 03, 2019 @02:00PM (#57899792) Homepage
      Kind of related, but there are currently no $1T companies after the stock market tumbles of the last year or so. According to the chart in this article [bbc.co.uk] on Apple's update, all the FAANG companies are now firmly below $0.8T, and Apple now has the US' fourth largest market cap, behind (in order) Microsoft, Amazon and Google, having fallen somewhat more sharply than the rest.
    • The VOC (Dutch East India Company) had a market cap of almost $8T in today's dollars at its peak during the Tulip Mania, making it the most valuable publicly traded company ever. Standard Oil is another company that hit the $1T mark before being broken up, and there have been others.
  • history repeating (Score:5, Informative)

    by kiviQr ( 3443687 ) on Thursday January 03, 2019 @01:39PM (#57899604)
    Do I need to remind you that Apple failed looong time ago because they started pushing product that no one wanted (precustomized, never upgradable product)? Sounds familiar?
  • Not exactly Tim (Score:5, Interesting)

    by rsilvergun ( 571051 ) on Thursday January 03, 2019 @01:40PM (#57899608)
    people bought fewer new iPhones because you let the cat out of the bag on how replacing the battery fixes performance issues. I mean, I guess that is _technically_ a repair...

    And I've replaced two iPhones now for what turned out to be a dying battery.
    • No, they were forced to do that repair for $29 rather than their old price of $99, which made it a no-brainer for most people.

      Screen cracks are the only thing forcing people to look at upgrading (when battery dies) now.

      • If Apple was up-front about it all along, people would have happily paid that $99. The $29 was to try to misdirect everyone away from that original dishonesty.

    • by sinij ( 911942 )
      You think Apple can't device a new way to throttle your old phone?
    • And I've replaced two iPhones now for what turned out to be a dying battery.

      But why the hell did you do it the second time?

  • by Anonymous Coward on Thursday January 03, 2019 @01:40PM (#57899612)

    Why isn't Apple selling more iPhones?
    1) Too darn expensive. I'm not dropping a grand on a device that I can lose or break in an instant. I switched over to Android because I can buy a phone with 90% of the functionality of an iPhone for $200 to $300, which is the price point I want.
    2) We're at peak functionality. Yeah, apps are bloating and requiring more CPU power, but if I need a phone, email, calendar, a browser, and some basic games, I'm good. I don't need a zillion megapixels or a few more battery stealing CPU cycles, so why do I need a new phone?
    3) The "wow" factor is over. Every phone looks the same and does most of the same things. I'm not jazzed by anything on the latest and greatest iPhone. Innovate!

    Apple is just about where Motorola was after the RAZR crashed and burned. Motorola didn't take the RAZR profits and invest more in R&D and their customers moved on to the next big thing (smartphones). RIM / Blackberry had the same problem. As has just about everyone else in the space. The only saving grace for Apple is the ecosystem it has for its devices and software. That has built something of a moat around its products, but as long as older products continue to function, there is no incentive for Apple to get hungry again.

  • by kiviQr ( 3443687 ) on Thursday January 03, 2019 @01:40PM (#57899616)
    People complained about replacable batter, phone jack, ability to fix device and prices. They did not care - people stoped buing products - now they are surprised?How about listen to your customers next time?
  • by rlp ( 11898 ) on Thursday January 03, 2019 @01:47PM (#57899674)

    Under Steve Jobs, Apple innovated creating whole new lines of products with innovative features. Now innovation at Apple means adding a notch to the screen or removing the headphone jack. The iPhone is a great phone, but enough people already own them and they're not willing to pay $1,000 or more for small incremental improvements.

  • by Tom Bauserman ( 5448904 ) on Thursday January 03, 2019 @01:48PM (#57899682)
    Higher profit margin. The school that I work at has 200+ perfectly good ipads that just won't update past 10.3.3. They aren't that old and there's nothing wrong with them. Built in obsolescence. Now the apps we use won't work because they do a version check for 11+ So fuck apple, we're getting Android tablets, next round.
    • by omnichad ( 1198475 ) on Thursday January 03, 2019 @02:11PM (#57899892) Homepage

      I hate to tell you, but Android is mostly worse in this regard. Apple does a lot of things wrong, but long-term OS upgrades is generally better than Android.

      The 5-year old 2nd-gen iPad mini still supports iOS 12. iPhone support for iOS 12 goes back to 2014 devices. I had an Google Nexus 6 that went out of support 1.5 years after I bought it - no no updates. And that was an actual Google co-branded phone. The full size iPad is a weird exception to this.

      All mobile devices are still given way too short of a supported lifespan. With Android there's no predicting when support will end either.

  • People bought fewer iPhones because there's really no compelling reason to, mainly because I lack the vision my predecessor had and his gravy train is running out of steam.
  • Sorry, I just see no need to pay $1000 for a $500 phone when my current maxed out one does perfectly well.

    My next iPhone will probably be a model made for India. Small, compact, capable, and around $500 instead of $1000.

  • Is that this is the second duplicated article posted on THE FRONT PAGE today.
    Please, someone tell me msmash isn't paid to do his/her job.

  • Simple Explanations (Score:5, Interesting)

    by nehumanuscrede ( 624750 ) on Thursday January 03, 2019 @02:04PM (#57899826)

    Reasons:

    1) Apple went full stupid with the pricing on their newest lineup
    2) I like my headphone jack thank you very much
    3) There is nothing wrong with my iPhone SE nor my Galaxy S5 ( both of which have headphone jacks )
    4) Smartphone market is over-saturated, iPhones are no longer the only option

    The only reason I have an iPhone SE is the size. I prefer a smaller phone that easily fits into a pocket vs
    the super sized versions that are so common today. They get any bigger and we'll be able to mount them
    via a forearm strap and use them as shields :|

    Were it not for the larger size, I would really prefer to stick with my Galaxy S5. It has a headphone jack,
    a removable battery ( I have a few spares ) and is expandable via the micro-SD card. The drag and drop
    file functionality is really hard for Apple to beat imo.

    Plus, f*ck iTunes. That sh*t is why I grabbed a Galaxy S5 to begin with.

    My ideal phone would be:

    1) Android base ( not the carrier bloated bullsh*t that's impossible to remove without root )
    2) Removable Battery
    3) Micro-SD card expand-ability
    4) Hardware switch(es) to disable the Mic, Camera and GPS
    5) Decent size selection range ( small to large )
    6) Headphone jack
    7) Dual Sim

    • Agree on the iPhone SE. Both my daughter and I were pissed when we heard it was discontinued. Best values for the money - that's why Apple stopped making them.

  • China quit buying. That is where you lost your sales. Cook, and all western CEOs, need to keep in mind that CHinese gov is NOT about to allow real competition.
  • by Rick Schumann ( 4662797 ) on Thursday January 03, 2019 @02:19PM (#57899966) Journal
    Come on, people, the answer to the question 'why Apple (or {insert any manufacturer name here} doesn't want people repairing their products' is simple and right in front of everyones' faces, but nobody wants to come out and actually say it: If you make a product (like an iPhone) so that it can be easily repaired, then you sell fewer new replacements, leading to a loss of profits. It's happened countless times, I'm sure, since the advent of the Industrial Revolution: a company makes a durable, quality product, that lasts and lasts and lasts, and maybe if it does break, it's easy to fix and keep using. Initially they sell a gazillion of them, and make all sorts of money; eventually, however, everyone who wanted to buy Product 'X' has bought one, and since they don't seem to need to replace it, ever, that company goes out of business because no repeat customers! This is why there is such a thing as 'planned obsolescence', too, of which 'lack of repairability' is just another version. Apple, and any other company you care to name, doesn't want to repair, or allow anyone else to repair their products in any substantial way, because they, ideally, want you to buy a new one every year. If Apple, or anyone else, thought they could get away with the entire inside of their products be just one solid block of opaque epoxy (and it wouldn't cost more money to do so), they'd do just that, to ensure no one can 'fix' anything.

    It wouldn't be anywhere near as hard as these manufacturers claim to build things like smartphones in such a way that they're more modular internally and more easily repaired. It would cost more money, to be sure, but you could create a smartphone in such a way that it's not only 'field repairable', but upgradable, such that you could keep using the same one for years and years and years -- and a company like Apple would likely go bankrupt, or at least become so much less profitable that who knows what would become of them? At the very least perhaps they'd become less innovative for less profits to invest in research and development of new technologies. Who knows?

    One thing is certain: microminiaturization of just about everything has clearly made repairing electronic devices significantly more difficult and in some cases impossible. Back in the early days of television, for instance, up to the end of the CRT TV era, repairing a television set down to the individual component level was not only possible but a regular practice. First with vacuum tubes, then transistors, then through-hole integrated circuits; it was possible for a technician to troubleshoot down to the discrete level, replace a part (or several) and the TV would be good to go again. Even with computers and computerized devices, up until the advent and widespread use of BGA [wikipedia.org]-packaged integrated circuits, it was still possible to field repair PCBs without any too-expensive equipment. But now between the fact that the vast majority of ICs are now BGA-packaged devices, and the package density of PCBs in a device like an iPhone, these PCBs are for all intents and purposes unrepairable; between the need for specialized equipment, costing thousands and thousands of dollars, to remove and replace BGA devices, and the specialized training required to successfully use this equipment, there's still a large chance that the attempts to repair such PCBs will fail, costing the company attempting to repair it money they can't recover. Even the manufacturers themselves don't usually attempt to 'repair' PCBs anymore for this reason, they'll replace them with new. For this reason if 'The People' want electronic devices that can be repaired to the Nth degree, they'll have to settle for overall larger, heavier devices, using technologies that allow component-level repair -- or someone will have to invent a new technology that isn't essentially a straight-line path from raw components to finished device to end-user use to the e-waste bin.
  • While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.

    because that sounds a lot more like, "we had to charge a lot less for a service than we had anticipated."

  • Phones, with their current functionality, have reached the point where they are "pretty good". I use a Samsung S8Plus which I've just paid off. It's fast, big enough, an OLED screen, and has plenty of storage space. I'll be rooting it soon. Until I bought this I was never really satisfied with my phone. Always wondering when it will be really fast, or not run out of space, or have a clearer screen. The only reason to upgrade now might be the battery. But I can replace the phone for 150 with damage warranty
  • So IOW they are too stupid to sell iPhone parts so somebody else makes the money.
    Tough luck.

  • Then, last summer, the GPS stopped working. Apple replaced it with an identical 6S right before the 1-year warranty expired.

    So now I've got a 6S with a 100% battery. Eventually I'll need to spend $49 to get the battery replaced, but that's what I plan to do - not buy a new phone. This phone does what I need it to do.

    Sure, I can't do animoji. I can't open it using my face. Somehow I'll live without those awesome features - maybe spend that $1000 on a new camera lens.

  • I like having a smart phone, but honestly this is getting silly. I can pick android and have google in everything I do. I can pick apple and have better privacy, but support a company that is price gouging and publicly telling me they want my phone to die more often. We need a 3rd option.

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