When it comes to dollars and cents (or whatever currency is used in your country), Apple Inc. is in really good shape. Record sales and profits continue to be reported, and the company has over $200 billion in the bank. Nothing troubling about that.
But the stock tanked recently in very large part because of concerns over the state of China’s economy after that country’s stock prices entered free-fall. Indeed, pretty much the entire stock market has suffered of late for the same reason, but Apple’s heavy reliance on China for sales growth put it in the crosshairs. Things began to settle down when Tim Cook sent a letter to a TV financial pundit saying that everything was hunky dory. Other than stabilizing the stock price, some complained that Apple might have violated SEC guidelines in sending that email outside of the normal financial reporting dates. But Apple has revealed information about sales before at media events without such consequences.
To make matters all the more confusing, there’s also a report that the Chinese government has singled out a business journalist for somehow being at fault for the plunge in the stock market. But how would any single reporter have that much power?
In any case, Apple’s stock price is tracking closer to the overall market nowadays. The online chatter is not cluttered with ongoing concerns that the company is in serious shape, except, perhaps, for some online bloggers who think they know something special, and are happy to use Apple to attract hits to their sites.
So I read an article Monday morning suggesting, in the title, that Apple was in trouble. Now perhaps I should have ignored the article, but since it was published on a site run by a prestigious financial publication, I read it despite my better judgement.
Why did the writer believe Apple was in trouble? Well, because of the drop in the stock price. True, Cook’s reassurance was mentioned in passing, but perhaps not taken very seriously. The main thrust, though, is that Apple must deliver a compelling iPhone refresh on September 9th to get things back on track, assuming the company was somehow off the rails, and reassure investors.
The article went on to mention the ongoing rumors about the expected new features as if they were true, such as a 12 megapixel camera, 4K video recording capability, a faster processor, and longer battery life. Well, the latter hasn’t really been given much attention, but perhaps it’ll be possible. Support for Wi-Fi calling over AT&T was mentioned, but that’s nothing that requires the next iPhone. It’s already rolling out in limited areas for people who are using the iOS 9 beta.
But the main new feature is supposedly Force Touch. It debuted in the Apple Watch and has spread to some MacBooks. Certainly putting that capability, to press harder to do more things, on an iPhone is a good thing. But is it the killer feature required to encourage people to upgrade? A good question, and I really doubt that the average user will notice or care. It’s the sort of power user feature that requires an extra effort to learn. I’m sure Apple Watch users are accustomed to it; less so with MacBooks.
A killer feature? Perhaps when someone knows about it.
So who is going to upgrade? Well, people who have smartphones they bought two years ago would be the main target. Add to that Android switchers, and people who have one of those new fangled plans with their wireless carriers that allow them to upgrade once a year, or more often than that.
That iPhone sales continue to rise also means that more people will be in upgrade mode year-after-year regardless of the carrier’s scheme for you to buy or finance new gear. That augers well for Apple, and it has nothing to do with alleged investor concerns that may be based more on emotion than on facts.
Besides, Apple’s stock price has tanked before for reasons having little or nothing to do with sales or expected sales. Consider the situation in 2013 as an example. The price routinely goes up and down, sometimes for good news, sometimes for not-so-good news, and sometimes for no reason at all.
None of it necessarily means Apple is in trouble. While certainly the pressure is high to deliver a compelling iPhone update, that doesn’t mean the company will somehow be destroyed if sales don’t increase fast enough. It’s also fairly certain that the new iPhone will look very much like last year’s model, though some suggest Force Touch will make it a tad thicker.
Someone who has a 2013 model will perceive it as something altogether new and different. Only the people who bought a new iPhone last year would be less apt to want to buy a new one. Well, unless having Force Touch is important.
It’s always thus. Some alleged journalists will seize on anything with an Apple connection, true or false or somewhere in between, to get more traffic. At least we’re in the business of covering the company without apology, but we’re not in the business of creating bit bait with bogus headlines and wacky theories.