Apple presented bad news last week about iPhone sales, and their stock came tumbling downhill. While this crisis does not have to be permanent, as a wireless analyst, I have been following this company and their key product the iPhone for more years than I can remember. And this is the exact problem I have been warning about over the last several years. Too bad they weren’t listening and preparing.
Apple is a great company with a strong key product, the iPhone. They kept growing over the last decade with the iPhone as their primary driver. They had other products and services which helped with growth and stability, but the main driver has always been the iPhone.
When this ride started 12 years ago, Apple called all the shots and consumers, not knowing what was coming next, went along for the ride. That was fine back in those early days when users were delighted and confused.
Back then, everyone was happy, and everyone was a winner including Apple, the investor, customers and workers.
As times changed, Apple strategy didn’t and that’s when their problems began
Then things started to change over the last several years. The problem was Apple continued doing things exactly the same way they always have and that was the early stages of the problem they are wrestling with today.
Companies either listen to their customers, or they move ahead without them hoping (praying) they will come along for the ride.
Many users are very happy following Apple designers as always. However, many other users have developed their own particular wants and needs, and in many cases would rather take a different path from the way Apple is taking things.
Many users developed strong opinions about iPhone that Apple ignored
Over the last decade many users have developed opinions and don’t like being ignored by iPhone designers. Apple thinks “push” when they think of iPhone design. Many users are still OK with this. However, many other users think “pull”, so they can get what they want. They are no longer satisfied with whatever Apple “pushes” out to them.
This push-pull is a new way of thinking about iPhone design. A new way which Apple has not caught onto yet. They keep pushing out what they want. That’s the same way they have always done things.
Apple iPhone dilemma comes down to push-pull
What Apple doesn’t seem to understand is the marketplace is growing up. It is maturing and it has its own opinions. Not every user wants to spend time and energy learning how to operate a new device.
Sure, they want new technology, but that does not mean they have to re-design everything. Plus, not every user wants a thicker device with a larger screen. Many would prefer a lighter, thinner device. Not every user does the same things with their iPhone.
And that’s the catch that Apple is caught in. It means not every user is happy with the current direction the iPhone is heading. So, that’s why many users are happy sticking with their existing iPhone longer than ever.
Apple needs to adjust their iPhone design strategy
To get back on winning track, Apple needs to re-think their strategy and include every user including both the ones who want to be surprised and the ones that want things not to change so dramatically.
While every customer would prefer improved performance, every customer doesn’t want or need a completely new way of thinking about using their smartphone, a different size, thickness, weight and more.
The iPhone X and iPhone Xs are larger, thicker and heavier than previous versions. While some users don’t mind, many others do. And they don’t like being ignored.
One key item Apple is missing with iPhone design
This is one key item Apple is missing. Sure, the new iPhone has a better camera and chip set, but besides that, there is not enough of a difference to warrant replacing the device. Especially when the size and weight are increased.
Over the last several years, the iPhone may be faster and has a better camera, but besides that many existing users still prefer their existing device.
This is exactly what I have been warning Apple about over the last several years. This larger size started the downward spiral.
Apple needs to get back to the growing side of the Growth Wave
Next, Apple also recently said they would no longer report iPhone sales numbers in their quarterly reports. This makes absolutely no sense. Since the iPhone is their key device, that’s what investors need to know. Investors need to understand if sales are accelerating or slowing down along with all the other numbers.
Each of these can be considered blunders for Apple. Put them together and you can see how it is leading Apple down into very dangerous waters.
The Apple growth curve has been rising for years. This report says growth may be slowing down. If that’s the case, the warning signals must be sounding loud at the company.
The growth curve rises, crests and falls. Companies strive to remain on the growth side of the growth wave. This is the winning side. This is the only side for investors.
This is a critical time for Apple. They need to get back to the rising side of the growth wave before it’s too late. Yes, they can recover, and I hope they do.
Will they, is the next question. It all depends if they really understand the problems, I have laid out here. Problems they created themselves. We’ll just have to wait and see.
