I came across this video by Dagogo Altraide on why are Apple sales declining. I have wondered about thus myself and found this video by ColdfusionTV to have some very interesting and likely correct answers. As such I wanted to bring this to you directly.
Three primary Postulates
I thought I’d summarize the four reasons presented for the decline and comment on these ideas.
A) The first suggested idea is simply a lack of innovation. This is something investors worried about before Steve Job’s death and after and is likely a very reasonable explanation. I’ve commented that Apple has gotten into a vicious cycle of churning existing products, renaming them or enhancing the name, building in a bit of new technology and calling it innovative techniques. It’s not long till the consumer catches on though that there is nothing new in this strategy.
B) The second and likely most significant reason is global deflation which eventually robs economies of jobs. As other currencies have dropped in price against the American dollar it makes American goods extremely expensive. That is, if you’re from outside the U.S . you’re perceived view that prices are rising is likely accurate if you live anywhere but the states. The price of an iPhone is likely no different in the states (expensive) but not escalating.
As an example, for a Canadian the phone is getting ridiculously expensive. Combining this with deflation and and the loss if jobs, high debt and structural weakness in the economy and in short order things in the course of 1 year, aren’t looking very rosy.
C) Finally, the market is saturated with good Smartphones. Eighty percent of people in the developing world have very good Smartphones. No longer is it being seen as necessary to upgrade every 6 months or a year. This is something I have felt strongly about and that it is time for Apple to defocus from Smartphones and not have all their eggs in one basket. Should we enter a phase in which there is not any growth and in fact negative growth, the current Smartphones people have will likely do the job.
There used to be an expression about avoiding being house poor and thus enjoyment deprived. I doubt many would want to see themselves Smartphone poor and at today’s prices we aren’t going to be far from that.
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