Apple still not returning to growth

With Apple‘s revenue guidance of $36 – $38 billion for the three months to June it looks as if they, on a moving annual total basis, will by & large continue to flatline for the 6th successive quarter.

They will have been (billions):

  • $169.1
  • $169.4
  • $170.9
  • $174.0
  • $176.1 and
  • $177.8 (using the mid point of their guidance of $37.0 for Q3).

This period of consolidation has arguably been accompanied by a lack of new product range announcements. The last one we would consider to have taken place was the iPad way back in 2010. As Tim Cook was at pains to point out on Wednesday its been the fastest ever takeoff of any product range they ever introduced.

His words were:

“It absolutely has been the fastest growing product in Apple’s history, and it’s been the only product that we’ve ever made that was instantly a hit in three of our key markets, from consumer to business including the enterprise and education. And so, if you really look at it in just four years after we launched the very first iPad, we’ve sold over 210 million, which is more than we or I think anyone thought was possible at that period of time. It’s interesting to note that that’s almost twice as many iPhones that we’d sold in a comparable period of time, and over seven times as many iPods as we’d sold in the period of time. So, I think it’s important to kind of to put that in perspective. We’ve come a long way very, very quickly.”

Prior to this the iPhone first appeared in 2007 and the iPod way back in 2001

Tim Cook also at a more general level was definitely saying they’re “right” not first on the product range introduction side.

His actual words were:

“As you probably know from following us for a long time, we didn’t ship the first MP3 player, nor the first smartphone, nor the first tablet. In fact, there were tablets being shipped a decade or so before then, but arguably, we shipped the first successful modern tablet and the first successful modern smartphone and the first successful modern MP3 player. So it means much more to us to get it right than to be first.”

Some think Apple may have missed some opportunities. With pressure from the likes of Carl Icahn (who was happy with the results and accompaniments)  to increase the share price which has now cost over $130 billion. The less expensive action  of having their 7/1 share split, which might enable their inclusion in the exclsive Dow Jones Index of 30 companies is most welcome and we look forward to a share price of in excess of $100 in the near future!

We feel a more dramatic use of this $130 billion could have been undertaken either on the product development or acquisition fronts. Arguably, its main competitor, Google is more adventurous/experimental.

The next 12 to 18 months will we envisage see a new product line emerging likely on the wearables front.

We fear with the dropping of the “hobby” description of the Apple TV streaming device together with 20 million unit sales to date that the once vaunted REAL Apple TV may be ditched. This we think is possibly the most missed opportunity of the decade if not the first quarter of the century!

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