Apple Warns Investors Future Products May Never Be as Profitable as iPhone (ft.com) 63
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.
"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.
Duh (Score:2)
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.
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But, but, but, this must mean APPLE IS DYING! Like FreeBSD or something.
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Apple is a publicly traded corporation (Score:2)
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
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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.
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No one said infinite growth but you.
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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.
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iPhones have profited $2 trillion. The Holy Bible has had 5-7 billion printings. So unless you're suggesting an average profit of $300/printing, clearly the iPhones has been more profitable.
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It's not me who made the estimate, Guinness Book of World Records did!
But let's let's say it's really 50 billion. Do you think the average bible profits $40? If it's 500 billion, do Bibles profit even $4? I'd think most Bibles are sold pretty much at cost.
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It's not me who made the estimate, Guinness Book of World Records did!
But let's let's say it's really 50 billion. Do you think the average bible profits $40? If it's 500 billion, do Bibles profit even $4? I'd think most Bibles are sold pretty much at cost.
Not if it's a Trump "freedom bible" [pbs.org], it sells for $59.99 and it has to be cheap to produce since he prints them in China. Just another blatant grift to separate his already poor supporters from their remaining money. I have no idea how a person who worked most his life to build a "New York liberal millionaire playboy" persona became the hero of the conservative working class while continually pumping them for more money, but here we are.
Phone⦠iPod⦠Internet Commun (Score:2)
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?
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Re: Phone⦠iPod⦠Internet Co (Score:1)
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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
Re: Phone⦠iPod⦠Internet C (Score:2)
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,
Re: Phone⦠iPod⦠Internet C (Score:2)
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.
Re: Phone⦠iPod⦠Internet (Score:1)
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Re: Phone⦠iPod⦠Internet Co (Score:2)
Out of ideas? (Score:5, Interesting)
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.
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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.
Re:Out of ideas? (Score:4, Interesting)
Re: Out of ideas? (Score:2)
"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...
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$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
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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.
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I want an iPhone [youtube.com]...
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Well, to their credit, they did come up with a new "it's glowing" feature for their latest iPhones.
By your logic, an Apple Keyboard would be $20.... (Score:3)
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
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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.
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Average wages in the US have gone up 25.7% in the last four years. Dow Jones up 30%.
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Shocker (Score:2)
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:5, Insightful)
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".
Predicted when Cook took over (Score:3)
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
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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.
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Interesting insight view, thanks for that.
If Apple has changed the way they innovate as you describe, then there's still hope. Let's see when the next big thing is coming out of it.
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When Jobs was ousted, Apple was a $1 Billion company. When he came back, it was a $10 Billion. That's a terrible decline, from 1 all the way down to 10.
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Oh, you mean like what Jobs did with Wozniack?
Everyone has a phone (Score:2)
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On a usage basis, phones are incredibly cheap.
I use mine a lot more, but even at a daily average usage of 8 hrs/day, that's Over 2900 hours/year. Even at $1700 (iPhone Pro Max, 1TB) or so, that's 58 cents/hr over the course of a year. If you have it for 2 years, that's more like 29 cents/hr.
29 cents/hour.
I have no complaints.
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They barely have a hold on any significant amount of market share, even recently or overall:
"Apple claimed a 15.8 percent share of the market in the first quarter of 2024, a decrease from the previous quarter. Apple's long time competitor, Samsung, ranked first with a market share of 18.9 percen"
"iOS holds a 28% worldwide share of the mobile operating system market"
What keeps them profitable is nothing to do with market share, and everything to do with ENORMOUS markup on a "designer" product.
Infinite growth (Score:2)
It’ll take time (Score:3)
Maybe in the next couple of decades, we will have the next iPhone.
Before or after correcting for inflation? (Score:2)
Shows how much they overcharged... (Score:2)
SteveJobs turned down Elon Musk (Score:1)
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
Apple Could Make Home Automation (Score:3)
They have to keep trying new businesses (Score:5, Insightful)
It's good that Apple is investigating products and services that are not as profitable as iPhone. They may or may not hit another grand slam home run, but if they don't risk anything by not trying new lines of business that don't have the same potential at the outset, they guarantee that they will wither on the vine, and end up like RIM (maker of the Blackberry, remember them?)