The Apocalypse seems to have arrived early (if that makes sense). Recently, it sounded like the roar of 1000 angry lions hunting down a dentist in the wilderness.
Okay, what happened is that Apple’s stocks have recently drastically fallen and likely will continue to plummet, according to many experts. In a way, that is apocalyptical, beyond the mindboggling fact Apple has lost more than $115 billion in the stock market since April. As an article in Market Watch explained, Apple “has the largest market value in the world, a bigger drop might bring the broader market down with it.” Even now, the tech giant’s stock woes have basically dragged down the entire Dow Jones Industrial average!
That’s alarming, but not all that surprising when coming from the most profitable company in the history of all histories. Apple cannot afford to miss a dollar beat so sustain its behemoth growth. It has actually created its own gravity field because of its size, affecting the entire tech economy.
So what is going with Apple? Not too long ago, the Cupertino company possessed the Midas digital touch. As always, it’s not a simple question to answer, but some of it correlates to qSample’s own research.
Let’s see what is rotting in Apple.
What does Apple have to do with all the tea in China?
Little, as you will find out.
It’s no secret that China remains as the last bastion for a meaningful smartphone market. Everyone (especially China!) wants to flood its economy with their gadgets. As Apple CEO Tim Cook recently said:
I think China is a fantastic geography with an incredible, unprecedented level of opportunity there. And we’re going to be there.
Cook may be a day late and a dollar short in his plan. After all, a new study from Canalys claimed Apple’s iPhone has fallen to third place in the Chinese smartphone market (with Chinese smartphone makers Xiaomi and Huawei in first and second respectively).
Add to that the reality that the Chinese economy is slowing down drastically, it could mean that China might not be the solution to feed the beast that is a suddenly-starved Apple.
We got Windows 10, where is the iPhone 7?
It’s also no secret that here in the West, the smartphone market is saturated. The iPhone is still king and queen of smartphones, but it just doesn’t have the elbow room with so many other players.
Instead of continuing its radical innovation and marketing, Apple decided to release the iPhone6s series instead of an iPhone 7 at the end of the year. In the same interview mentioned, Cook explained that during his company’s last quarterly earnings report just 27% of the iPhone installed base has upgraded to the latest generation iPhone 6 series. “We view that as a very bullish sign on the future, and there’s a lot of headroom left for upgraders,” Cook said.
Well, Tim my boy, the market ain’t buying it. It’s assuming that the iPhone6s will have a moderate welcome from the public. Expectations are more valuable than present profits when it comes to the stock market and its investors. Perception is reality, and right now it’s not good for Apple—even if Cook suddenly declares that the Iphone6s will come with its own coffee maker.
Did the Apple Watch vanish to the same parallel dimension as Google Glass?
It seems the Apple Watch exploded on the scene early this year, but exited stage left with a whimper.
As with the iPhone6s, perception is becoming reality when it comes to the Apple Watch, yet it seems no one on Wall Street really knows the reality. As the article in Market Watch explained:
Apple didn’t segregate Watch sales as a separate line item in its latest earnings report, so analysts can only guess how it’s really selling.
TechRadar proposes that sales cannot be hidden, and the Apple Watch is flopping:
Using e-receipts from 2.5 million online shoppers in the US, the analytics company Slice Intelligence has tweeted a graph estimating that the number of Apple Watch sales has plummeted to under 5,000 units per day. A stark comparison from the 30,000 to 35,000 units per day the company was pushing in the weeks after its launch.
qSample’s own study revealed that only 41% of respondents were interested in Apple Watch when it was released earlier this year. 39% claimed that wearable technology just wasn’t that interesting. Furthermore, 26% stated the new smartwatch was just too pricey (18% held a “see and wait” attitude for the gadget, but that will never happen unless it materializes back on earth, or at least in the press).
In an article for Quirks, we granted several reasons for the tepid reception of the Apple Watch, apparent now by Apple’s stocks slide and moribund sales:
The price: The Apple Watch ranges from $350 to $17,000 to purchase. Our study revealed that 50% of respondents would not pay more than the baseline price of $350, while only 13% said cost was not an issue.
Apple is not a pioneer this time: Smartwatches have already settled in the marketplace, mainly as a niche/supplementary product. The first smartwatch ever sold was the IBM WatchPad in 2001. Apple is not in its customary role as a torchbearer, as with personal computers, tablets, and smartphones.
Apple isn’t leader of the tech hill anymore: According to a study, Samsung beat Apple in customer loyalty—although Apple still has the edge when it comes to customer service. Apple spent decades and vast amounts of energy perfecting its image. Today its competitors work just as hard at branding. And don’t forget that Cook is still struggling to have Apple branded in China!
Not all is stagnant for Apple, though. Its new streaming music service is booming with subscribers and its iTunes store is breaking records.
That’s just not enough.
It looks like Apple’s position at the top of the tech business chain could be in peril. The Apple Watch, music services, and iPhone6s won’t keep it on the throne this year, at least in investor and public perception. Neither will a faltering China market.
Nobody is king of the hill forever, although if I were a betting man I would never go against Apple. Let’s not forget that Apple is the kind of remarkable company that has faced many end time scenarios before, and basically rewrote the very fabric of the tech cosmos. It has made fools of many digital doomsday prophets.
Apple knows better than any business entity how to reshape both perception and reality in a way that grants consumers something akin to a religious experience. It just won’t happen in 2015.
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