Hey, how's it going Dave 2D here? So Apple just put it a letter to their investors warning them of lower than expected earnings and
It doesn't look good right the revenues down
by like five to nine billion then lower than they expected the stock price dropped like ten percent overnight
it was not good news, but a
Hit like this does not destroy companies a lot of publications like this is the end of Apple. It isn't our least
I certainly don't think it is stuff like this happens. All right stuff like this happens to big companies and
For a company like Apple they're still one of the richest companies out there. There's still one of the most profitable companies out there
It's not that this won't have an effect on them. But I think there's gonna be a huge wake-up call for the whole company
so Tim Cook mentioned a few reasons in his letter as to why the
Performance was poor and I want to touch on a couple of them
He mentions the slower market in China being a big thing
And he also mentions the battery replacement program and the effect that that program had on
IPhone sales now if you'll remember a little while ago someone discovered that Apple was reducing the performance on their iPhones
when they were reaching a particular age or when the battery had degraded to a particular stage and
That was really controversial. Some people were like hey that's fine
Apple is trying to maintain the functionality of the phone by dropping the performance a little bit
But just making sure that doesn't reboot and other people were like what like what this is this is essentially planned obsolescence
They're making these phones slower to encourage you to buy a new one
Clearly when you reduce the performance of your older iPhones more people are buying new iPhones and whether or not they did it with
intent we'll never know but the fact is people bought less iPhones this year because of that battery replacement program because you could just spend
$30 and Apple would replace your battery and now your old phone suddenly felt new again
Now as for tim's comment on the economy in china
It seems that people in china just aren't buying as many iPhones as they expected. And Apple is
Extremely dependent on China to grow their iPhone business because almost every other developed market out
There is heavily saturated on iPhones see iPhone only sells flagship devices
But there's only so many people in the world that are willing and able to buy a thousand dollar flagship phone
There's a finite number of people who want to spend that kind of money on an iPhone
so right now in our market phone companies are trying to push new phones on us so hard like
5g phones smaller notches thinner bezels better this better that but the truth is the user experience on our phones hasn't changed hasn't
Fundamentally changed in years like if you're if you're talking about iPhones
the iPhone 5 or now
let's say the iPhone se
So like the one that looks like the five that has a very similar experience to the newest latest and greatest iPhone
tennis is a lot cheaper like the tennis is thousand bucks the
IPhone se is probably like two hundred hundred fifty bucks, but they both run iOS twelve
I still have to charge both of them at night whether you have a $200 I phone or a $1,200 iPhone
The user experience is fundamentally the same right now if I phones want to have better business
It doesn't matter if it's in Asia China or anywhere else in the world
They either have to make way better phones or way cheaper phones
those are really the only two options because all these iterative changes that have been doing year on year just isn't cutting it and you
Can see it in the numbers those sales figures. Do not lie. Now. I want to talk about one last thing
It's the iPhone 10 R. This is a phone that launched at
$750 and the reviews of it were decent
No one really ripped on the phone like the initial impressions were a little weak with the screen resolution and stuff
But people enjoyed the phone and I think a lot of people thought that for $750 you're getting decent value the problem
Is that when people buy iPhones when people want that Apple luxury brand?
They want the real iPhone
they don't like the derpy version that they offer once in a while like the iPhone 5c and now the iPhone 10 are
People want the good good. They want the real iPhone
so people just don't buy the b-tier phone and I think this is something that Apple will
Adjust in their game plan going forward and that's really the whole message of this video the earnings warning
Is bad news, right?
Obviously, no one wants to hear that
But I think Apple is a company that is smart enough that they're gonna make some big moves
They're gonna make some big shifts in the direction of the company the roadmap of when they want to release things how they're gonna do
Things they're gonna change because there's no way that they're gonna ride on this and just watch the company tank
There's no way I'm excited to see what they do
It's interesting that this handout the way that it did but I'm interested what you guys think like is this what you expected is this?
Theirs I personally don't think it's the end of Apple
I think I know some of you guys do but I'd like to hear your thoughts. Okay. Hope you guys enjoyed this video thumbs
We liked it subs if you loved it and see you guys next time