Apple’s Errors

It’s a tired trope to imagine what Jobs would have done, but when he returned to Apple he saw a myriad of macs and decided that Apple would kill them all and sell 4: a laptop and a desktop in pro and consumer models.

Apple started grabbing more market share by providing all these different form factors, but in the process they’ve lost the simplicity that has always been their hallmark: walk into a store, pick the pro device or the consumer device. No choice paralysis.

It also muddles the consumer signaling that has always driven Apple — there’s a new high-end device, it’s obviously different than last year’s, and people know you bought the newest, hottest device.

Part of that is a mature market. But part of it feels like the company of “a thousand no’s for every yes” is saying “yes” a lot.

Jobs talked often about creative destruction and how making great things involves being bold and killing some of your favorite things; that seems to have been replaced with a certain amount of timidity.

I am in complete agreement with your attitude. However, it looks like the SE isn't coming back, and I wanted an Apple Watch anyway (after wearing smartwatches since the first Pebble...or SPOT if that counts). So I gave in, bought an iPhone XS and a watch. Previous smartwatch usage told me that the phone could probably remain safely in the bag most of the day. An Apple Watch makes it stay in that bag even more, I found out. If I'm out and about without the messenger bag/man purse, the cellular keeps me in contact. So for me, at least, carrying the monstrosity is reasonably solved.

Every use case is different, so this might not be a solution for everyone. And, yes, it is ridiculous that the solution is "go spend more money" because there isn't a reasonably-sized phone available. OTOH, most of my phone looking is "who's calling? What does the wife want on SMS? What's that reminder?" which is easily taken care of on the watch. When I do need a bigger screen, it's nice to have...well, a bigger bigger screen. :-)

> Secondly, thanks in part to the lack of information, this miss is catnip for confirmation bias: everyone has their pet theory about what Apple is doing wrong or how they will ultimately fail, and it has been striking the degree to which this revenue warning has been breezily adapted to show that said critics were right all along (never mind that many of those critics trotted out the exact same explanations in 2013 and 2016).

HN, in its comments on Ben's article:

- Apple downgraded its forecast because it needs to refresh the iPhone SE

- Apple downgraded its forecast because its phone prices are too damn high

- Apple downgraded its forecast because its phone lineup is too confusing

- Apple downgraded its forecast because iOS 12 has improved performance and postponed upgrades for another year

These confirmed biases all have a "developed market" vibe. I believe they're also meaningless in the context of last year's iPhone X launch. Apple killed their estimates last year. Everyone is forgetting this!

None of these theories address Ben's point about the lack of smartphone differentiation in China (arguably Apple's most important market), which is (IMO) a more interesting discussion and a stronger headwind to Apple's financial prospects.

I agree with Ben that the "S" designation is probably hurting the company, as it introduces 8-quarter "seasonality" into their financial projections because Chinese consumers are only buying heavily-differentiated form factors.

I disagree that consumers will always buy the flagship iOS device. Then again, this earnings report just confirms my own bias for phone pricing. :)