Will Apple stop innovating?
Apple's new reality: the long descent from the summit
Turning times usually come in different stages. First of all, there are the harbingers, which are often enough completely ignored. They don't seem to matter because nothing but your past success has mattered. This is what happened at Apple in 2011 and 2012 in times of hyper growth, when profits shot up by a sensational 100 percent: The first phablets came on the market and Samsung suddenly began to sell more units than Apple. It doesn't matter, the iPhone was the gold standard - apparently for all time.
In the second stage there is usually a huge crash - but supposedly for the wrong reasons. Total refusal is the real symptom. This is what happened after the iPhone 5 launch, when Apple shares plummeted from $ 705 to $ 500, apparently for a chain of false reasons. Bad rumors and conspiracy theories accompanied the price slide, as did the personnel damage around Scott Forstall and John Browett, which suddenly made the Apple empire appear more fragile than assumed months ago. Fanboys stubbornly poisoned that the stock market would have gone crazy. It was pretty emotional.
The end of an illusion: the comeback is canceled
The third stage of the turning point is the most complex. It is the stage of an honest review of the situation, of in-depth analysis and of the insight that something may actually have fundamentally changed. This phase began exactly a year ago after the Christmas quarter heralded the turning point for Cupertino. Apple had to spend nine billion more sales to earn the same result as it did 12 months earlier. What followed were three bitter quarters in reverse.
But in the past few months new hopes have sprung up: On the stock market, symbolized by the eloquent entry of Wall Street icon Carl Icahn, a heavily executed iPhone and iPad launch and - finally - the China Mobile deal. For a few months a new illusion condensed: Apple could perhaps turn back on the growth path after all.
Apple's era of growth is coming to an end
Last Monday after the close of trading, this illusion burst like a soap bubble. Since Monday 10.30 p.m. German time it has been clear: Apple's era of growth is irrevocably coming to an end. The quarterly figures - again a proud result in and of themselves - but above all its own outlook make it unmistakably clear that Apple lacks the means to return to growth. The fourth phase of the turning point begins immediately after the quarterly announcement in another dramatic price slide: It is the acceptance of a new reality.
This new reality is: Apple has reached the plateau - it doesn't get any higher. The comparisons of the profit development speak for themselves. 2012: 13.1 billion profit. 2013: 13.1 billion profit with 9 billion more sales. 2014: 13.1 billion profit with another 3 billion more sales.
Apple has fallen victim to its own success and sheer size
It becomes clear: more is not possible. One cannot blame Tim Cook at this point. The Apple CEO launched what was in the product pipeline in the fourth quarter. The limits of growth have simply been reached - also for the wonder company from Cupertino. Apple has fallen victim to its own success.
And the sheer size. The iZyklus is exhausted, the smartphone market is reaching its peak or has already reached it, the premium price surcharge will not be sustainable for the next few years. All the efforts of the past quarters resulted in falling profits due to eroding margins. In the Christmas quarter, all the chips were placed and another 3 billion dollars more were earned - but only to achieve a result at the previous year's level. There is simply not more to it.
Shock: March outlook below previous year despite China Mobile
In the March quarter, Apple even announced sales below the previous year's level. It would be the first time in 11 years - despite the new sales channel via China Mobile, which was seen as a supposedly safe growth driver. If even the deal with the world's largest wireless operator is not enough to generate growth, the problems in Cupertino are much bigger than assumed months ago.
This shocking finding alone is responsible for the lion's share of the renewed price fall of more than $ 50 in the past week. Apple is still at the peak from which it should now take a new path in the coming years - the downward one. What happens to the balance sheet if the iGroup does the unthinkable in the near to medium-term future - namely: shows declining iPhone sales?
The iPhone is becoming a problem child
The day may actually be closer than expected a week ago - an increase of just 3 million units was posted with great effort in the Christmas quarter. But the iPhone will soon be in its eighth year of its life cycle: It is a ripe age for a product that continues to make up 60 percent of the company's balance sheet.
Wall Street's worries appear to be understandable. If iPhone sales shrink, all hell will literally freeze over for Apple - unless the iWatch immediately becomes an absolute global success, making the billions per quarter that the iPhone is losing. In any case, after more than four years without a new product, Apple is doomed to land a sensational success with the iWatch - greater than that of the iPad, which, despite growth of another 17 percent, could not grow into the role of the iPhone successor.
In short: the iWatch has to be a new iPhone. But even then, Apple will find itself in the role it is in today: it always needs the next trick to support the eroding business. Sometimes it was the iPad mini, sometimes two iPhones at once, sometimes China Mobile, and soon it will be the iWatch.
Soft case: the $ 158 billion buffer
No question about it: Tim Cook will leave no stone unturned to defend as much of the Apple empire as possible. But his fate is similar to that of late Roman emperors: He is involved in too many wars of defense - it is only about preserving what cannot be preserved in the long run. Meanwhile, the (innovative) power seems to be lacking to lead the great battles of the future - Apple now seems to let Google do as they please.
What's next? Apple is likely to look at the stock market summit from behind in the coming years and move further and further away on its long downward journey. The company can take its time and take breaks for as long as it wants. Apple will be able to afford it. On the one hand, because the iUniversum will still wash billions into the money store, only presumably less and less.
On the other hand, because 158 billion dollars in the bank is the biggest argument in the world. If the management runs out of breath and the buyers go on strike, the helicopter can fly in and rain money. Nobody has to worry about Apple as a company in the coming years: Perhaps the profits of 2019 will match those of 2009 - a comparison with Blackberry, Nokia and other ailing tech pioneers is out of the question.
Apple's fifth decade: The constant relegation battle threatens
Nevertheless, the cult company is about to enter its fifth decade with a new challenge, such as Microsoft experienced more than ten years ago or IBM three decades ago. How does the corporate culture get the constant defensive: How does it deal with the inevitable downturn in bestselling products - how with becoming the constant loser on Wall Street, beaten up again and again by analysts, abandoned by investors and at some point also employees whose stock options have become worthless . It's the inevitable lifecycle of organizations that have passed their peak - a long, grueling descent against the backdrop of a brighter past.
To be clear: it is not that far yet. There is still a chance that Apple has been conservative in pricing the China Mobile deal, that the iPhone 6 will once again generate double-digit sales growth and that the iWatch will be the big hit product that we have rightly been waiting for for almost 5 years . In this case, Apple would have bought another year or two. But the basic problems remain: By far the most important group division seems to be exhausted - sustainable growth can only be achieved with the next most successful product in the history of consumer electronics.
Wall Street obviously has serious doubts about this: it is meanwhile beginning to price in a conceivable downward spiral in the coming years - a foretaste of this was provided by the past week, in which Apple shares lost 10 percent of their value and destroyed a market value of 45 billion dollars. while Google and Facebook are celebrated on Wall Street like the coming regents. A full 50 billion dollars only separate Apple and Google. The change of power seems only a matter of time - it could be in the coming months ...
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