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  • The Never-Ending Wish for Apple to Fail

    December 11th, 2015

    For a number of years, it’s been the hope of some of Apple’s most severe critics for the company to fail. Not just to fail to grow sales, but to be thrust into irrelevance or go out of business. Of course, that nearly happened in 1997, shortly after Steve Jobs became iCEO, when Apple’s cash would only fund the company for another three months until things began to change.

    That turnaround may have started with the famous “Think Different” ad campaign, but that’s another story.

    Now consider the logic behind some of the recent fear-mongering. As merchandise is being manufactured, orders will vary at different times of the year. With consumer electronics, the peak season is generally the December quarter. So it stands to reason that orders for the following quarter’s production will be lower.

    Evidently, logic isn’t supposed to apply to Apple. So a couple of years back, there were reports that Apple had cut orders for the iPhone. Apple’s stock price took a dip in the months that followed. It didn’t matter that Tim Cook explained, during a quarterly conference call, that you cannot use single metrics from the supply chain to understand how many products were being built or sold. And it’s also clear that Apple often relies on multiple suppliers for parts.

    So there’s now a story that Apple has cut back on orders for the iPhone 6s series. Now I have no idea what part of that story may be true. It may be about an individual supplier for reasons the press probably wouldn’t know unless somebody is really talking out of turn. Besides, you would expect Apple to order fewer iPhones for the March quarter, since sales will be less, not because the product is a failure, but because of normal sales trends.

    Yes, it did impact Apple’s stock price to some extent, but didn’t you expect that?

    Now there’s a published report expressing deep concern over reports about some resellers discounting the Apple Watch. You see, Apple normally sets a minimum sale price on products, meaning that the company would probably have to give permission for discounting. And the news that Best Buy is offering a $100 discount on products usually selling for a minimum of $349 is pretty substantial. Not quite as much as offering two current model Samsung Galaxy smartphones for the price of one, or offering one free. But after all, we don’t worry about Samsung’s difficulties pushing high-end handsets.

    Oh and by the way, it appears Target is putting the Apple Watch on sale too, but all you get is a coupon rather than sweaty cash. So the theory is that perhaps Apple Watch sales aren’t so good, and Apple needs to clear out inventory before the next one arrives, perhaps in the spring of 2016. Maybe.

    Of course, we really do not know how well it’s doing. All we have are projections of five or six million sold for the first two quarters and other predictions of twice that for the current quarter.

    Now I did casually explore the price of the Apple Watch at some other dealers. Amazon is offering small discounts, but several models have limited stocks. B&H, a large online retailer of consumer electronics and photographic equipment, was offering a $50 discount last I checked.

    Is all this is due to the rush by Apple to move product before the holiday season ends? It may actually be due to the decision on the part of some dealers to sell the Apple Watch at a fairly decent discount, depending on the dealer, in order to drive traffic to sites and stores. Call it a loss leader.

    The fact is, however, that concerns about the Apple Watch are selective. Several dealers tracked by AppleInsider are also offering fairly big discounts on new Macs. Even iPads, including the iPad Pro, are being discounted. But it sounds worse to make you believe, erroneously, that it’s all about the Apple Watch and poor sales.

    I made a random check of a few jewelry stores to replace my lost wedding band, and that quest revealed all sorts of sales that continued past Black Friday and Cyber Monday. Faced with a slow-growing economy, it’s clear that merchants are trying hard to boost cash flow in any way they can, hoping to make up the difference on volume. It’s not an Apple story, unless you want it to be.

    Part of the disconnect is due to the fact that it’s about Apple. Even when Apple was selling a fraction of what it is now, there were critics who were only too happy to pronounce the company dead and buried. In the 1990s, Apple unwittingly did what it could to make those wishes come true, at least until Steve Jobs returned to the company. Even then it took years to build a consumer electronics powerhouse. Some of it may be due to the happy accidents of the unexpected success of the iPad, and, later, the iPhone.

    Remember that Jobs, at the 2007 iPhone rollout, said Apple would be happy to have sales reach 1% of the global market by the end of 2008. Apple did better, and that was the beginning of a juggernaut. But 2008 was 11 years after Jobs took over the company. It was by no means a cakewalk. The iPhone caught a wave and the rest is history.

    So is the history of people using fear-mongering and facts taken out of context to denigrate Apple.



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    2 Responses to “The Never-Ending Wish for Apple to Fail”

    1. Shameer M. says:

      “So is the history of people using fear-mongering and facts taken out of context to denigrate Apple.”

      I have two words to describe that – Apple Envy.

    2. Constable Odo says:

      I often wonder if there are a lot of people hoping companies like Mercedes-Benz, Porsche or BMW eventually fail because their cars are more expensive than the median price range cars from Hyundai, Toyota, GM and Ford. I honestly don’t understand why Americans want an American company which provides lots of jobs to Americans to fail. Do people also want companies like Exxon-Mobil to fail because they occasionally have oil spills or charge a lot for gasoline. Exxon-Mobil’s share price has dropped quite a bit but I doubt the company is doomed. I don’t want to see any American company failing because it only impacts the economy in a negative way.

      I understand why Wall Street bets against Apple because those people don’t care about anything except what goes into their own pockets. Those people are only interested in rapid growth in a company and if that stops they’ll pull their money out and put it into something else. They’ll dump any company going through a rough patch of business and make things even worse.

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