Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek


Filed under: News | Apple


Apple Stops Growing Sales In North America, But Look at the Bigger Picture

Feb 9 2014, 8:11pm CST | by

2 Updates
Apple Stops Growing Sales In North America, But Look at the Bigger Picture

YouTube Videos Tweets Comments

Full Story

Apple Stops Growing Sales In North America, But Look at the Bigger Picture

Today the Business insider covered Apple CEO Tim Cook’s Q&A with the Wall Street Journal in which Cook reflected on the company’s fiscal Q1 performance and the savaging that the markets have since given the company. The article hones in on one comment from Cook who, after being asked about revenue in the different countries the company operates in, said that:

North America was a challenge. We had no growth basically as you could see from our results and that of course pulls down the top line because the weight is so large.

Business Insider rightly questioned the extreme lack of commentary on this statement and rhetorically questions what the market reaction would be if, for example, Microsoft’s CEO was to admit a similar thing. The “reality distortion field” that exists around Apple would seem to temper the coverage given to the company, especially from the mainstream tech publications.

Notwithstanding this apparent coverage bias however, we need to look at Apple’s performance last quarter alongside Cook’s stated comments. Having just read Adam Lashinsky’s excellent book Inside Apple: How America’s Most Admired–and Secretive–Company Really Work and having seen Apple, over time, redefine a host of different industries and technology paradigms, it seems to me that we are in a typical point of Apple’s cyclical model – it’s been a few years since we had anything ground breaking out of the company – arguable the iPad, launched in 2009 was the most recent industry defining product launch – and hence sales within established markets are more incremental. Sure people upgrade to the second, third and fourth versions of products, but this doesn’t create the massive rise in revenue that entry into an entirely new space does (witness the growth delivered by the introduction of the iPod, iTunes and the iPhone respectively).

Roughly every five or so years we see something groundbreaking from the company and, tellingly for a company that is so secretive about future product news, Cook did indicate that Apple was working on at least one completely brand new product category. While most publications have been fixated on what this could be (an iWatch or an Apple TV many suspect), few have looked at what it might mean for the company’s financial performance overall.

In the Business Insider article a couple of charts were used to illustrate the “problem” that Apple faces – iPhone and iPad sales in the US were charted and the reduction in sales growth was used to suggest that the rise of the Android operating system constitutes an existential threat to the company’s financial fortunes generally. Cook reflected on the threat Android introduces to the iPhone franchise by saying that:

I look at the mobile phone market as having three kinds of phones: feature phones, smartphones that function as or are used as feature phones, and real smartphones. I care about the market share of the last one. I don’t care how many feature phones are sold. The more that are sold I look at as good because those are all potential future customers for real smartphones. The same thing goes for the second category. I’d like to convert as many of those as possible to real smartphones.

While there is some bluster to what he says, it’s a statement that comes, I believe, from someone runs a company that has ( to mash a Wayne Gretzky quote somewhat) already well and truly skated to where the puck is headed. It’s a safe bet that Apple’s design tzar Jonny Ive already has the new couple of products sitting waiting in Apple’s HQ to be introduced. And when they are introduced (likely this year sometime) the same publications that have been wringing their hands about what Android means to Apple, will be focused instead on commenting on the renewed stratospheric rise of Apple’s market capitalization based on the entirely new sector that the company is dominating.

I’m no Apple disciple, in fact I don’t own any Apple kit, but having watched the company over the past decade or so, it is obvious that Steve Jobs created an entity that has the ability to work in unison and see far bigger macro trends than other companies. Anyone who thinks a short term dip in North American sales is some sort of indication that Apple is on the ropes. Well that’s about as sensible as (at least in hindsight) Steve Ballmer’s comments about the iPhone upon its introduction were.

Source: Forbes


You Might Also Like


Sponsored Update

Update: 2




More From the Web

Shopping Deals


<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




blog comments powered by Disqus

Latest stories

Kim Kardashian reveals a Few Factoids from her Life
Kim Kardashian reveals a Few Factoids from her Life
The gorgeous chunk of feminine beauty, Kim Kardashian has revealed a few factoids from her semi-charmed life.
Hershey’s New Logo looks like a Steaming Pile of Poo
Hershey’s New Logo looks like a Steaming Pile of Poo
Hershey’s new logo is out now. But the only problem with it is it looks eerily like an emoji symbol of a steaming pile of poo.
Angelina Jolie and Brad Pitt exchange Wedding Vows
Angelina Jolie and Brad Pitt exchange Wedding Vows
The actress in Tomb Raider, Angelina Jolie, and Brad Pitt exchanged wedding vows recently. They make a lovely couple and both are from the cream of the crop in Hollywood.
Nokia partners with Samsung to bring HERE maps to Galaxy smartphones
Nokia partners with Samsung to bring HERE maps to Galaxy smartphones
Samsung has signed a partnership with Nokia to bring its iconic HERE maps on Samsung Galaxy smartphones. Samsung isn't pulling out Google Maps though, rather, it is offering users a reliable option.

About the Geek Mind

The “geek mind” is concerned with more than just the latest iPhone rumors, or which company will win the gaming console wars. I4U is concerned with more than just the latest photo shoot or other celebrity gossip.

The “geek mind” is concerned with life, in all its different forms and facets. The geek mind wants to know about societal and financial issues, both abroad and at home. If a Fortune 500 decides to raise their minimum wage, or any high priority news, the geek mind wants to know. The geek mind wants to know the top teams in the National Football League, or who’s likely to win the NBA Finals this coming year. The geek mind wants to know who the hottest new models are, or whether the newest blockbuster movie is worth seeing. The geek mind wants to know. The geek mind wants—needs—knowledge.

Read more about The Geek Mind.