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Apple Warns Investors Future Products May Never Be as Profitable as iPhone (ft.com) 54

Posted by msmash from the how-about-that dept.
Apple has warned investors that future products may never be as profitable as its iPhone business, as it pushes into unproven new markets such as artificial intelligence and virtual reality headsets. From a report: The iPhone maker added the new warning on growth and profit margins to its latest annual report, in the list of "risk factors" facing the tech group's business.

"New products, services and technologies may replace or supersede existing offerings and may produce lower revenues and lower profit margins," Apple said, "which can materially adversely impact the company's business, results of operations and financial condition." Apple routinely warns investors in its annual reports that competition, foreign exchange, supply chain issues and other factors can put "volatility and downward pressure" on its margins. The same 10-K regulatory filing in previous years suggested that new product introductions could have "higher cost structures." But until now, Apple has not been so direct in addressing the financial profile of its future products.

Apple Warns Investors Future Products May Never Be as Profitable as iPhone More | Reply

Apple Warns Investors Future Products May Never Be as Profitable as iPhone

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  • This is standard stock prospectus stuff, and obviously they might not beat the profitability of the most profitable product to ever be released in all of history.

    • But, but, but, this must mean APPLE IS DYING! Like FreeBSD or something.

      • [sarcasm]Of course Apple is dying. It's been dying since Steve Jobs came back. He could never bring Apple back and look at them now. They never make money on any of their products.[/sarcasm]
      • If it isn't growing and growing faster than inflation then it's dying.

        It doesn't matter how big the company is or how profitable the company is venture capital companies will gut it like a fish if it stops being a gold egg laying goose for more than a handful of quarters.

        We have optimized our economy and our entire economic system even for vast amounts of short-term gains. It's what the kids call end stage capitalism. We know what to do in order to reign it in we just don't want to do it

        • Whoa there buddy! Are you saying that if a company loses money they will be worth less? And if they lose enough money they will eventually be snapped up and their technology parted out to better run companies?

          That's some crazy talk. We can't have of that going on. We should have poorly run companies get tax payer money to keep crawling along forever because... reasons.

      • But, but, but, this must mean APPLE IS DYING! Like FreeBSD or something.

        Apple is doing really well fundamentally as a company. It's bringing in continual boatloads of money. However, Apple's talking about the stock price, and that may or may not be directly correlated to fundamentals. In particular, stock appreciation tends to correlate with growth expectations, and it's the growth that has the stock market cautious. Apple's comment is entirely about growth and not absolute revenue.

  • Are you getting it yet?

    They need another revolutionary device mext in line after the mac, ipod, iphone⦠what will it be? It has to revolutionise or create a whole new industry. AR probably isnt it. VR is still a fail not happening. Will it be neurallink stuff? Will tesla be the next apple?

    • They're not going to get another revolutionary product unless they put someone at the helm that thinks like a revolutionary. Tim Cook isn't this person.
      • Absolutely. He's never been anything more than a gate keeper. The unfortunate part is most companies ruled by a board of directors are really not good at innovation. It takes a virtual dictator to drive innovation. Jobs, and Musk are two noticable corporate dictators.

        • Re: (Score:2)

          by narcc ( 412956 )

          Hero worship is gross.

          Also, neither Jobs nor Musk 'drive innovation'. Jobs is good at marketing, not innovating. The Mac was objectively trash compared to the 2GS. The iPhone design wasn't new. We'd already seen similar concept designs and at least one other phone in that style even beat it to market. What do you think Musk did? The electric car? He bought Tesla. His major contributions? Insisting on cameras instead of lidar and the cybertruck. SpaceX? Just one of many private leaches suckling on t

          • Hear hear! Chevy Bolt was a nice ele tric car before Musk stormed in with a lot of noise. He did make other companies run for their money, but they easily cought up.
            Types like Jobs and Musk will do anything to be worshipped and stand out. I met a few types like that on the work floor. They do more damage than good. When everybody finally start to realise that and put up more and more resistance, they leave with slamming doors, yelling how wrong and stupid we are. Then other people really start to thrive,

          • Jobs was good at being an asshole about getting a product right. If he had made a sane decision regarding actual cancer treatment vs juice fasting he would probably still be running Apple today and he probably would have done a better job than Tim Apple.

    • apple wont have a revolutionary device until someone else invents it and apple steals or copies it.

  • Out of ideas? (Score:5, Interesting)

    by backslashdot ( 95548 ) on Tuesday November 05, 2024 @12:22PM (#64921481)

    They had better come up with something. In 15 years the average phone will be sold for under $200 (down from today's $800 mark). The reason is, phones have almost reached the point of diminishing returns in terms of performance. In 5 years, sub $100 phones in China will have the feature set of today's highest end iPhone (that's not a looney prediction, the sub $100 Xiaomi Red 13C with its MediaTek Helio G85 CPU outperforms the iPhone 11 of 2019 and is 5G). Since the performance gains with each generation are getting less and less noticeable to the user, we're only a few years away from when people take longer to upgrade their phone unless the price reduces). Bookmark this comment and come back to it in 2039.

    • They had better come up with something.

      You mean, they had better dress-up and upsell something. "Come up" as in "innovate" has not been seen from Apple for a while imo.

    • I would argue Apple products have never been about performance. Frankly very people need or care that this year's phone gets 15% more flops than last year. What matters is the perceived slowness as more apps sap the processing power of the phone. This where Google has not been as good to make sure their partners (like Samsung) do not load their Androids with tons of data harvesting spyware. Apple has an advantage that they can control the data harvesting is theirs alone.

    • "we're only a few years away from when people take longer to upgrade their phone unless the price reduces"

      In order for that to happen, a phone vendor is going to have to compete on the basis of long term support. But if they spend their money actually providing service to customers then they won't have as much to spend on advertising and will likely be outcompeted...

    • $100 phones have been perfectly acceptable hardware for at least 5 years. At this point, nobody wants to give up their Appstore purchases, and cheaper phones are littered with crapware & spyware. So in the short term, it makes more sense that people hold on to their phones longer, rather than that people give up their appstore purchases and switch to spyware-littered Android phones. $1000 over the course of several years, for something you might use for a few hours/day, is really not a big deal to mo

    • Re: (Score:2)

      by Megane ( 129182 )

      Bookmark this comment and come back to it in 2039.

      Ha ha, that's a good one! We all know that civilization will end after a Y2038 bug causes all the nukes to launch!

      ...but at least people won't be buying new cellphones for stupid money then.

    • Well, to their credit, they did come up with a new "it's glowing" feature for their latest iPhones.

    • They had better come up with something. In 15 years the average phone will be sold for under $200 (down from today's $800 mark). The reason is, phones have almost reached the point of diminishing returns in terms of performance. In 5 years, sub $100 phones in China will have the feature set of today's highest end iPhone (that's not a looney prediction, the sub $100 Xiaomi Red 13C with its MediaTek Helio G85 CPU outperforms the iPhone 11 of 2019 and is 5G). Since the performance gains with each generation are getting less and less noticeable to the user, we're only a few years away from when people take longer to upgrade their phone unless the price reduces). Bookmark this comment and come back to it in 2039.

      An Apple keyboard is $200. I can buy similar from $20 all the way to $50 for one I got that had similar switches and nicely paired with 4 devices and had USB-C charging. I am sure you're partially right, sales may be the only thing enticing users to upgrade before their phone stops getting updates, but Apple has a long history of charging "outrageous prices" and people happily buying them. It is fair to say that Apple customers are not perfectly logical. If you offer a superior non-Apple product at a l

    • The reason is, phones have almost reached the point of diminishing returns in terms of performance.

      ...until software comes along that takes advantage of the improved performance to do something useful.

      Software sells systems. Lots of people bought IBM PCs to run Lotus 1-2-3. Lots of people bought Macs to run PageMaker and Photoshop.

      Better hardware leads to better software leads to better hardware. If your requirements remain constant, the cost of the hardware to handle those needs will go down over time. But if your requirements change, you'll need better hardware.

  • Not much of a surprise given that it was launched in a confluence of cellular carriers providing reliably little value for the very high prices they charged, and hav ing extremely high equipment subsidies, and when something like th iPhone was just barely possible so once people started deciding they wanted one there were many many years of substantial year of year changes that made using the thing much more pleasant.

    At this point we can maybe get a similar year over year technical change (say 20% increas

  • Apple's legacy is the struggle (Score:3)

    by King_TJ ( 85913 ) on Tuesday November 05, 2024 @12:36PM (#64921529) Journal

    The challenge with Apple is, they're a company with a highly driven visionary as the founder/CEO... and a "colorful" enough of a figure so he was ousted from his own company once, allowing everyone to see it decline without him in charge. Then he's able to eventually regain control and proceeds to wipe the slate of their ENTIRE product line clean, launching fresh new devices/computers and rekindling the excitement around the business.

    Now, we've just been watching Apple churn through all Mr. Jobs' remaining/unrealized product concepts and product roadmap until they're left to come up with new ideas themselves. Guess what? Tim Cook isn't the man to have any of these ideas. He's doing what MOST company leaders do; relying on some R&D folks to come up with new products and then pitching them to the general public. They've clearly got some good engineering talent who pulled off the M series ARM processors, so they could get away from Intel again. But that was really in the works, in the background, for many years, as an extension of work done for the iPads. Now, it feels like they're just chasing whatever the latest "tech trends" seem to be (AR, VR, AI). And no surprise? This won't bring them any record sales or success.

    I'd say you'd be hard pressed to show me ANY company that kept up the level of innovation they had under a founder, after he/she passes away or leaves to do other things. It's a whole different level of commitment to the business when it's "your baby".

    • Jobs had a nose for the consumer market and how to apply the cutting edge to it that Cook and team probably cannot match.

      Cook has been a good operational steward, but is not an innovator. Jobs had the hands-on experience of trial and error at Apple et. al. that is just hard to find in the wild. (Lisa & Next flopped, but did fuel related products.) I'm sure there are good ideas floating around in Apple labs, but how to bring them to market is the tricky part.

      I'd like to see what Jobs would do with VR-as

      • Re: (Score:3)

        by Tom ( 822 )

        This so much.

        Jobs, for all his flaws, was an innovator in the sense of coming up with new things and new ways to put together old things into something new. Iterative improvement was never his. Turning Apple around with a completely new product line, figuring out the smartphone as the PDA/phone/iPod combo and how to market it to non-techies. These are the things Apple is lacking these days.

        I haven't seen Apple create a new product category since he died.

        • Re: (Score:2)

          by r0nc0 ( 566295 )
          It's an interesting thing actually because from inside I think that Apple has done quite a lot to change how it operates as a company in order to prevent dependency on brilliant idealists like Jobs. Most of the things we develop as new features are not top-down ideas by any means - they are proposals or projects from my peers and colleagues who discuss the idea with others and eventually form a team to "look into it". Some projects are more successful than others obviously; the VR headset was another Newton
  • All they need to do is keep market share, I doubt you can sell people a product that isn't a phone that gets used as much
  • Turns out his is not actually possible...
  • I think people are underestimating how long the iPhone really took to make. I was recently watching General Magic, and it shows that such a device was being envisioned back in the 80s. The interfaces they were working on back then, look remarkably similar to what the iPhone looks like. Particularly the OG iPhone 2G. From the Newtons to the Palm Pilots to Windows Mobile, it took a lot of iterations to make a good product.

    Maybe in the next couple of decades, we will have the next iPhone.
  • Seems like the margin was soooo high..it's less achievable as competition shows up. WhatsApp levels the P2P stuff.... Apple talks to Android with out compromise, as does Android -> Apple. Sorry Apple, welcome to your new peer neighbors. End Greedflation. It's been said before: "Think Different"

  • SO the blame rests

    SteveJobs didn’t want a change agent, a competitor in life or in death for the success of his company.

    Notice Elon Musk eclipsed the consumer product and built the universe infrastructure for communications in space, interplanetary, terrestrial and mobile

    Observe that Apple stood by in its booth selling phones all-the-while — suddenly SHOCK it bought a sat company for ET to TXT home

    underwhelming imagination at AAPL, ticket takers and regression to the mean-based

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