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Tim Cook to Investors: People Bought Fewer New iPhones Because They Repaired Their Old Ones (vice.com)
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.
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.
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.
Why doesn't Apple offer to repair old iPhones? They could make extra money.
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.
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.
Also there has been over 2 billion iOS devices made, so that is a massive second hand market. In 50 years people will be using “retro” iphones like old rotary phones.
The Apple mystique is fading. They still make good (albeit overpriced) products, but they haven't introduced a significant new product since Jobs died.
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.
I only please one person per day. Today is not your day. Tomorrow isn't looking good either. - Scott Adams
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.
They Suck.
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.
Saudi Aramco was valued over $1T years ago.
Apple definitely needs a follow-up to the iPhone SE form factor and price range.
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?
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.
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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.
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?
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.
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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.
[Insert pithy quote here]
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.
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.
I see a little evil. If Apple is chasing down legit repair shops that are managing to repair devices successfully, without compromising features (particularly security features), and without damaging hardware in a way that makes their products look bad, they're definitely doing wrong. I cannot tell from the bias and obvious venom of TFS and cannot be fucked to search through the self referential links to determine that this is actually the case, but if it is they are wrong.
I don't think Apple, or anyone else, does wrong in designing devices that aren't serviceable, and I don't see a way of forcing them to do such a thing in a way that necessarily doesn't compromise the end product. I am a design engineer, I have designed products on this scale in this market. Serviceability didn't enter my mind at all, and was never a requirement. When i was designing telecomm switches though, that cost 100's of thousands of dollars: yes, it is essential or customers won't buy it.
My advice is to not buy the phones if they do not have the features you want.
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.
-- Tigger warning: This post may contain tiggers! --
They'll only return 20% instead of 40%, poor things, how will they ever afford their replacement yachts next year.
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.
I tend to rant.
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
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.
I prefer the "u" in honour as it seems to be missing these days.
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-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. The next time I upgrade will probably be for 5G but that's the only reason I can think to do so.
Have you fscked your local propeller head today?
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 same chassis as a "Smart" wheelchair^Wcar.
Buying out a bankrupt car maker with otherwise great tech (like Saab used to be), with money from a crowdfunding, would probably be quite realistic. Imagine Top Gear and/or The Grand Tour doing something like that, with their massive "most popular TV show of all time" audience. They'd have the contacts, the backers, the interest and and the ability to do something like that.
So IOW they are too stupid to sell iPhone parts so somebody else makes the money.
Tough luck.
How is that our problem? We should prop up a company because people invented in it? It doesn't work that way. Make good products people want or die. No other choices. Yea this isn't a charity.
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.
#DeleteChrome
The tech press takes massive payolla from Apple and others to push anti-consumer FUD.
-the right to repair becomes the creation of dangerous unlicensed hardware likely to maim, kill and allow 'russians' to steal your banking info.
-the desire for memory card expansion becomes the demands of depraved cheapskates to ruin the wonderful internal memory system and file security.
-the desire to control spying peripherals with actual hardware switches is demonised with the ole "if you have nothing to hide you have nothing to fear" garbage.
-the desire for a headphone jack is derided as the rantings of a "get off my lawn" senile old man.
But now the ability to get what you want from a phone (mostly) by buying a well specced chinese brand is attacked by the puppeteers of 'leaders' like Merkel, Trump, May and Macron stating that chinese phones must be banned. A modern phone to the West's design specs is the most perfect NSA spy tool imaginable. Everything currently depreciated on a phone represents ideas the NSA wants banned.
In the new Deep State Orwellian society, we are all but cattle to be controlled and observed in the most perfect ways possible.
Apple is now run by a literal monster (Cook makes my flesh crawl in a way only Tony Blair has done so in the past). But unlike Blair, Cook is a total incompetent corrupted by power to a degree the demonic Blair is proofed against. And now Cook is making the Orwellian nature of Apple's phones look bad- something his Deep State masters are going to be increasingly worried about.
But the R+D arm of the NSA, Google, will be the true inheritors of the Orwellian phone program.
Tell them up front "after X years you won't get bug fixes and you will be vulnerable to zero-days."
As far as the corporate world is concerned, that's tantamount to setting an expiration date.
Sure, they may look to Android, but there aren't many Android vendors promising 5+ year bug-fix support either.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
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.
$1k is a significant psychological barrier, and you released a model that darn near identical to the one released last year. People who would upgrade from last year's model are balking. People who would upgrade from previous years' models are taking a very close look at Android, which happened to have a pretty decent release this year (Pie), and now has models besides Pixel which are not fucked up by the phone's manufacturer, and guaranteed to receive OS updates (Android One initiative).
What did you expect after nearly doubling the price of the product? The base model of iPhone XS now costs 5x what a very decent Android One phone does (Nokia 6.1 2018 model). The price differential is not at all commensurate with difference in capability.
Don't invest in a fund that heavily invests in any one company.
Actually, even if those repair shops butcher phones Apple can't stop them. Once the hardware leaves Apple's hands, the consumer can do just about anything they want with it.
Apple and others ARE wrong to INTENTIONALLY design things not to be serviceable. Especially when there are many examples which are to a much greater degree. It's one thing if a design choice requires it - such as the physical rigidity requirements not permitting an easily removable back without significantly compromising size and weight (even without taking cost into account). It's another to sell an easily breakable headphones dongle because you equally saved money and minor complexity removing a headphones jack that people broadly want and use.
Appreciate the free advice. It's worth exactly what we all paid for it since many people already realized Samsung still has a headphones jack and jumped ship.
You can get rich if you own a politician, but you have to be rich to buy one in the first place.
I wonder how the SE would have done against the new $1000 phones.
With the end of More's law, I also wonder if the environment is worth more than Appple's bottom line.
https://www.youtube.com/c/BrendaEM
Look on Google listings especially in less posh areas where people don't have money for the full Apple-store experience.
Except not, because apple has the hardware locked down and there's the minor matter of firmware/software to contend with.
But good analogy failure.
in 50 years today's iPhone will be a museum relic.
You can get rich if you own a politician, but you have to be rich to buy one in the first place.
Bullshit about servicability. I have a Moto phone and Thinkpad, both of which are highly modular and just as functional as their Apple counterparts. A few mm of extra thickness may be less stylish, but I'd hardly call it "compromised."
There goes the time the iPhone was clearly a better user experience for the price.
The smartphone technology has evolved well enough that any 200+ USD phone provides a satisfying experience, only slightly worse than a phone ten times more expensive.
Also if anything, people understood the iPhones from iPhone 6 onward were not made to last, and thus confidence on the brand was eroded. Why invest 1k-2k USD in a phone that is not build to last, and will only get you by 2, at most 3 years? By that token, you buy a 200USD every couple of years, use the latest tech, and save a bunch of money in the process.
Furthermore, phones are a very vulnerable technology to theft, breakage or loss. There is no incentive into buying 2K USD phones against 200-300 USD phones that just work. People are pragmatical.
I know of no fund that invests in just one company. I am just saying, that I am sure most funds have investments with Apple. Geee, who said just one company.
Anonymous comments are as pathetic as the anonymous "sources" that contaminate gutless journalism from the New York Time
As of the time of this post:
MSFT: $747B market cap
AMZN: $733B market cap
GOOG: $710B market cap
AAPL: $674B market cap
AAPL, bringing up the rear! The peaked at just under $1.1 trillion, and now they're down nearly 40%. Falling market share, consumers weary of the constant upgrade for nothing, no new innovation for the product, and a revenue stream that is basically just the iPhone ("services" - apps - live because of the iPhone) for 70% of their money. As the iPhone goes, so goes AAPL. And the iPhone is failing...
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I'm certain that there will still be a set of people who wait outside in the rain when a new Apple product is released, and cheerfully turn in their previous iteration to be shredded, and consider the outrageous price as a way of showing everyone how well they're doing in the world every time they pull out their new shiny Apple device, not bothered at all that their battery is not replaceable and the memory and SSD are soldered in place, secure in the knowledge that a slight incremental refresh will become available before any current components have a chance to wear out.
Apple will continue to make money on the J R Beer business model "if you have to ask how much it costs, you can't afford it". Just, perhaps, not quite as much money.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
The charge port on my 6s needed replaced. I went thru call support (knew the problem) and they confirmed the problem, so they scheduled an in store repair. I go, wait for a while, and finally see a person that looks at it and determines the port needs replaced. Then they inform me they don't replace for that model (at least not that old) and try to get me to buy a new one. I buy a repair from ifixit and keep using it. The main problem I see is how much the cost of a phone has gone up under Cook, with the fact there is nothing new that really encourages an upgrade. Now you have a building repair industry/movement, it may get worse. I will admit ifixit has done a good job with their site not just selling products, but decent instructions to repair. My dad bought a dirt cheap replacement battery for a 5s from amazon, but it was the wrong battery. I told him to go thru ifixit, it may be a little more, but you will get the correct battery
Return 20% instead of 40%? I think you mean they dropped 40% (from their August peak), and people would rather have them only drop 20%...
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I have an iPhone. I just like it better than Android. My phones last about 3 years and I upgrade, selling the old phone on eBay to lessen the shock (people still drop $100+ on 3yo iPhones). Every time I buy a new iPhone, I get this thing about recycling and I'm thinking: why? You guys don't sell the parts or the phone anymore. Yeah, it's all about recycling those dollars into newer phones by taking yours off the market. I may buy an iPhone, but I don't buy their "environmentally responsible" bullshit.
Chewbacon
The Bible is like Wikipedia: written by a bunch of people and verifiable by questionable sources.
I do have the right to TRY...
And thus the reason they saw their market cap plummet. They're sliding down, no longer on the "endless climb" up in revenues/profits. And with a continuing slide in market share, it doesn't look like it will turn around any time soon...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Make repair work counterfeiting so no parts can be sent around the world.
With no new low cost parts the repair work will become too expensive.
Users will have to buy a new smartphone.
Domestic spying is now "Benign Information Gathering"
My spouse is a happy iPhone user, and I've done a bunch of repairs on it. I'd love to buy a new iPhone to replace the 6, but I refuse to buy one without a headphone jack.
Bluetooth is crap, and I don't want to carry dongles.
When you buy a thing you own that thing. It is that simple. The Ayn Rand crowd would just be dandy with control after sale practices.
since people are looking now. Plus it's my kid's phone and she graduates in 2 years and then has to buy her own phones :D.
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This one, which sees them down around 13% and continuing to drift lower. They'll probably reach 10% around the end of 2020, and then it's essentially game over. You get into the single digits? You're no longer worth supporting/considering.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Hey Cook...you're admission of THROTTLING older phones "because it would extend battery life", kind of let the cat out of the bad to what was really going on. You purposely slowed them down, because after a NEW OS update, people would notice the slower phone, go to an Apple store, the apple employee would tell them the older hardware couldn't handle the new OS, in an effort to push them into a NEWER more EXPENSIVE phone, that of course would seem MUCH faster. With the battery replaced, their OLD phone appears MUCH faster. Couple that with the insane pricing of the phones, and it's no wonder people aren't buying these overpriced phones. Not just Apple, but the pricing of Samsung has gotten out of hand too.
The hero we all need.
They may have peaked, but a company that size doesn't just die. They will change, maybe even become tech dinosaurs, but they will be around for a long time.
â¦_anyone_ could have taken reins of Apple. Enough product was pipelined that Apple could run for the next 10 yrs - doing nothing. Apple would continue to crank out money. SteveJobs knew thatâ¦
Tim Cook did exactly that perfectly. Directors have only themselves to hold responsible for NOT mentoring a creative heir apparent.
Tim did exactly as expected; nothing. Now Appleâ(TM)s pipeline is empty, layoffs follow and whatever happened past 10 years is on the block.
You're probably looking at US rather than worldwide. As we see with this announcement, worldwide is what matters. And worldwide, iOS devices - the iPhone, the iPad - are losing market share. They get little bumps when a new phone is released, but the trend is continuing downward.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Look at phones. Show data that says they're not losing market share. Your own link shows a downward trend...
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14.7 to 13.2 for Apple. Huawei, Xiaomi, and Oppo all increased during that time. Apple is trending down, the others are trending up.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Instead of Win 10 I compare it to "early Zune prototype".
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