The investor community has its agenda. Make lots of money and delight themselves. Apple has its own agenda. Make lots of money and delight the customers. When these two agendas clash, $AAPL tanks. Think of it as punishment for Apple raking in all that money.
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We know the drill. Investment analysts, VCs, and some media sites get a simple-minded idea. Apple should sell cheap iPhones to stop the infestation of cheap Android phones in emerging markets. That will surely allow Apple to squeeze out the bad guys and dominate the market. If Apple dominates, its investors get rich. That was happening in 2011 and 2012 with the iPad, as Apple reigned. Apple stock soared.
Apple, on the other hand, has its own set of problems. It must maintain the quality of its brand, and it must allow any iPhone to be a gateway to its own services, iTunes, iCloud, iBooks, and so on.
So just exactly how would Apple build a cheaper phone that nevertheless supports all the services Apple offers and also maintains that special customer craving for something really cool? Cheaper speakers and audio subsystem would denigrate iTunes. Crappier display? That would only disappoint. Omit certain communication bands? Then it wouldn't work worldwide seamlessly. Cheapen the construction so that when a customer drops it from a meter height, it explodes into 20 pieces? Not good. Smaller battery? Not with LTE you don't.
Apple executives have access to information we do not. They know how each part of the design of the iPhone fits into their strategy and the markets the company pursues. They know what sells and what doesn't. They can estimate what would be lost by going cheap.
And so, Apple pursues its own agenda and lets market share slide. Other companies that sell smartphones (besides Samsung) aren't making much, if any, money. Yet, the tirade of the investor community continues to misjudge Apple's business model, and so they, in dismay, punish Apple by selling off their stock.
Here are two excellent explanations. First, Jay Yarrow: "Apple Doesn't Want, Doesn't Need, And Doesn't Care About A Cheap iPhone." Second, Rocco Pendola: "Apple Laughs When It Realizes Google Makes Computers."
Meanwhile, Apple takes the money, in an indirect sense, the investors could have made and banks it. To the tune of US$140 billion. That makes them even madder. So Apple had to placate investors with dividends. But it isn't enough.
And so it goes, around and around.
In my opinion.
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Tech News Debris For The Week of September 9
Jean-Louis Gassée suspected that Tim Cook may have tricked competitors into a false sense of what a modern smart watch ought to be. He explores that theme, playfully but smartly, in: "Apple’s Wearables Future."
John Sculley has provided a detailed account of what drove Steve Jobs out of Apple back in 1985. Why now? According to Forbes, "Sculley clearly didn’t appreciate Ashton Kutcher’s recent Steve Jobs biopic. (“For those of us who knew him well, [we’re] scratching our heads what they were thinking of when they wrote this movie,” he said earlier in the day.) Here's the story, including Sculley's biggest regret. "John Sculley Just Gave His Most Detailed Account Ever Of How Steve Jobs Got Fired From Apple."
It just goes to show that re-creating history for the sake of entertainment (and cash) while the principals are mostly still alive is a perilous, vacuous venture.
Rocco Pendola thinks that Apple, by making iWork free, is being very clever, and I agree. It's one of those things where you lightly mask the "2" (content creation on a tablet) then add the other "2" (free iWork) and someday, a magic and obvious sum of "4" pops out that no one saw coming: Microsoft's tablets plans are derailed: "Apple Killed Microsoft: The Media Buried the Lede."
It appears to be insane for Google to allow anyone to post apps to Google Play and then have a setting in Android to restrict downloads to Google Play only. (Ostensibly for better security.) Especially since, according to Symantec, about about 1,000 malware apps were posted there in August alone. Although the apps are removed, usually overnight, Symantec notes that during that time, there are an estimated 8,500 to 10,000 downloads by unsuspecting customers. Ouch.
For those who thought that Apple was out of iPhone innovation gas, Dan Rowinski sizes up the iPhone 5s and writes that "The iPhone 5S: More Than An Incremental Apple Update." Rowinski writes," Apple wanted to state, with authority, that its iPhone [5s] was the best damn smartphone ever built." And it has.
Image Credit: Apple
Finally, Dan Goodin is the Security Editor at ars technica, and he's written a pair of interesting articles on the state of security in Java. "Security of Java takes a dangerous turn for the worse, experts say" and then, later in the week, "New features aim to shore up Java’s flagging security."