They Guess How Apple Should Do Business

November 29th, 2017

It’s very easy for an outsider to say how a huge multinational corporation should do business. There are no consequences unless that corporation chooses to take their advice. Even then, it’s still their fault for being so foolish.

Of course, there’s nothing wrong with making suggestions about what a company can do to earn more money, improve its image or otherwise do things better. Talk is cheap. At the very least, it might even be fun.

In keeping with that tradition, there’s an alleged analyst at The Motley Fool (an apt title) that is going full bore into claiming that Apple is on the wrong track. The headline reads, “Apple Inc. Might Be Making a Big Mistake.”

Lest we forget, Apple’s September quarter exceeded analyst expectations. Revenue was up. Sales for the iPhone, the iPad, Macs and the Apple Watch increased. Despite estimates from Gartner and IDC about flat or falling Mac sales, they improved by 10.2% over the year-ago quarter. Yes, there’s still life left in the Mac platform. For the second quarter in a row, iPad sales increased, and there were reports of double digit growth for the Apple Watch.

True, Apple doesn’t actually release numbers for the Apple Watch, but it’s possible to make educated guesses by looking over the totals in Apple’s “Other Products” category.

Sounds good so far, right?

So how is Apple going to make a “big mistake”?

The article quotes someone credible, analyst Ming-Chi Kuo of KGI, who claims, based on his supply chain sources, that Apple plans to build a bigger version of the iPhone X next year. So in addition to an updated version of the existing form factor with a 5.85-inch display, there will be one with a 6.46-inch display.

In short, the larger model would be similar in physical size to the iPhone 8 Plus?

The Fool’s assumptions are based on a telltale quote from Kuo stating that there will be no major differences between the two models other than size. Evidently without further thought of the meaning of such an analysis, that Fool blogger asserts, “If this is true, then Apple is making a mistake.”

How so?

Well, it appears that conclusion is based on the differences between, say the iPhone 8 and the iPhone 8 Plus, where the larger form factor gets you two cameras rather than one. So the assumption here is that Apple is making a huge mistake not to follow a similar game plan with the iPhone X.

Except that the blogger is missing something, probably because Apple’s specs weren’t consulted. The iPhone X already has a dual camera system at the rear. Thus the presumed advantage of the iPhone 8 Plus is already present.

So what else might Apple do to avoid deliver extra stuff for the larger model? Of course that assumes it has to be otherwise different in some way other than size.

What does Apple do? Offer a sharper camera? Maybe adapt the ProMotion feature from the iPad? The doubled refresh rate, at 120Hz, will deliver smoother motion, making for a better viewing experience for movies and games. It’s why you might consider buying a TV with a higher refresh rate, and it’s particularly noticeable on a 55-inch set. It may not be as visible on the far smaller screen of an iPhone, although it is visible on an iPad.

Now lest we forget, Kuo’s analysis shouldn’t be expected to list all of the proposed features of the 2018 iPhones. It’s possible that both will have ProMotion, and perhaps better cameras, with more megapixels, although Apple has concentrated more on larger lenses and better processing software to improve picture quality under a variety of shooting conditions.

In other words, the blogger is talking through his hat. He doesn’t know. He doesn’t have a clue what Apple is going to do, or whether they will add some kind of differentiator other than size to the rumored larger iPhone X. To assume an outsider’s analysis of a future Apple product must represent the complete list of specs is foolish. It doesn’t makes sense even when you accept Kuo is a very knowledgeable outsider.

Indeed, it may well be that the final feature set of the 2018 iPhone X, and a possible iPhone X Plus, aren’t even finalized yet, so how would a third party know if Apple’s designers don’t? Or is The Motley Fool implying that Kuo is omniscient?

The blogger also suggests that, since iPhone sales increases are slowing due to a saturated market, Apple needs to find other ways to boost revenue. That means increasing average sales prices, but the statement is self-contradictory. If there’s to be a larger version of the iPhone X, it should cost more. Even if total unit sales were the same, revenue and average sale prices are apt to increase.

Then again, since there are already complaints about the $999 list price for the 64GB iPhone X, what will an iPhone X Plus cost? Or will Apple lower the price of the former by, say, $100 due to production efficiencies, and place the Plus version in its former slot?

The long and short of it, though, is that any assumption that Apple is making some sort of big mistake based on someone’s estimates about the possible specs of next year’s models is just plain dumb. It’s just as dumb to assume Apple has no idea how to differentiate a larger smartphone from a smaller one, besides the size and battery capacity.

As I said, dumb!

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