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Why Apple is on a slow death spiral Featured

In August 2018, Apple stock hit an all time high of US$233.47; today it is 20% lower and it is unlikely to reach its August peak ever again. Why? In a nutshell, Apple is no longer an innovator.

Whatever one may think of Steve Jobs, there can no longer be any doubt that he was the driving force behind the company he co-founded. Under Jobs’ two stints at Apple, it introduced the Mac, Mac OS, Mac OS X, iPod, iTunes, iPad, Apple TV, iPhone, iOS, Siri (acquired in 2010) and the App Store.

Between 1985, when Jobs was forced out of Apple, and his return in 1995, Apple stopped innovating and was on the verge of bankruptcy. Since the death of Jobs in 2011, Apple has given us the Apple Watch, a product of limited appeal, and not much else.

As Apple is a public company, it is beholden to the interest of investors who demand continual growth. Under Jobs this was not a problem because he was a genius who had the uncanny vision to deliver revolutionary market disrupting products that could generate stupendous growth.

In contrast, today, Apple is desperately intent on keeping investors happy by squeezing every last drop of cash out of the enormous loyal user base generated by the products created while Jobs was at the helm.

The focus on revenue and profits ahead of innovation has led Apple to engage in unethical and counterproductive practices. Apple has abused the incredible trust in the company and its products held by users, a legacy of the Jobs years.

As highlighted in my recent article, customers can no longer take faulty products to an Apple Store for repair with any confidence that they will get an honest, reliable assessment and fair quote for service. In many cases, they will be wildly over-quoted and deceitfully advised that it would be more cost effective to buy a new device.

In its frantic bid to reduce product lifecycles and increase turnover, Apple has gone all out to destroy the after-market service and repair business.

New model Apple devices, unlike those in the past, are deliberately made difficult to open, clean and refurbish. In many cases, batteries and other components are needlessly glued into place for the sole purpose of making them difficult to remove.

Apple refuses to sell parts to anyone other than its downtrodden authorised repairers and in many cases will not even supply parts to them. And users are not even free to use substitute third-party parts in their own machines as Apple has introduced detection software that will lock the device in such cases.

For instance, if a user tries to get a simple plastic home button installed on their iPhone to replace a defective one, Apple’s software will brick the phone.

Apple has even invented its own screws so that ordinary tools cannot be used to open its devices.

The innovative energy that Apple once had for creating new and market beating products has now been channelled into thinking of novel ways to force their customers to spend more on junk they would have previously not needed.

When Apple removed the headphone jack on the iPhone 7, users were outraged. No longer could they use their headphones while charging – unless they bought a charging dock. However, at least Apple supplied a headphone adapter in the box.

With the latest exorbitantly priced iPhone XS series, users even have to pay A$15 for an adapter, not to mention A$30-A$60 for a fast charger and anywhere between A$60-A$110 for a wireless charging stand.

Apple chief marketing officer Phil Schiller would like to convince the world that the future is wireless. And why wouldn’t he, when a set of wireless airpods can be had for a mere A$229?

And it is not just iPhones that Apple is using to squeeze its customers. In the latest Mac products, Apple appears to have embarked on a strategy of removing all the standard ports and selling them back to customers as dongles.

Most notably missing from new Macs of all varieties are USB ports, not to mention HDMI etc, and included are just Apple’s non-standard Thunderbolt ports. As a result, users have to buy a bag full of different types of dongles to plug in connecting devices. It would be comical if it wasn’t so tragic.

The video below produced by The Verge illustrates the story nicely or you can see it on YouTube here.

The above scenario where one woman proudly shows off how much more productive her old MacBook is than the new version with its cacophony of dongles is actually far closer to the truth doubters may think.

I have recently had one instance where a senior Apple user group member informed me that he would prefer to buy a used older MacBook than the newer model. And I was recently informed that there is now a thriving market for iPhone 6 models since it was the last iPhone produced with a headphone jack.

Some may think that this all just anecdotal evidence, but stalled iPhone XS and XR sales say otherwise. And you can bet your bottom AAPL stock price that it is being discussed vigorously in market analyst meetings.

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Stan Beer

 

Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.

 

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