Great post by Ben Thompson on how Apple remains profoundly misunderstood by many:
And yet, the perception that Apple is somehow hanging on by the
skin of their teeth persists. I was speaking to someone about
Apple’s particularly excellent China results this afternoon, and
was struck at how their questions were so focused on threats to
Apple — “How will Apple respond to Xiaomi” for example. This is
in stark contrast to the way most think about a company like
Google, where their dominance in whatever field they choose to
enter is assumed, just as Microsoft’s was a decade ago. Apple,
though, is always a step away from catastrophe.
It’s difficult to overstate just how absurd this is, but here’s my
best attempt: last quarter Apple’s revenue was downright decimated
by the strengthening U.S. dollar; currency fluctuations reduced
Apple’s revenue by 5% — a cool $3.73 billion dollars. That,
though, is more than Google made in profit last quarter ($2.83
billion). Apple lost more money to currency fluctuations than
Google makes in a quarter. And yet it’s Google that is feared,
and Apple that is feared for.
His list of three wrong assumptions about Apple is so spot-on. Worth bookmarking. I’d venture to say that just about all wrong-headed analysis of Apple’s future prospects comes down to one or more of those assumptions. The only one I’d add to the list: Apple can’t innovate without Steve Jobs.
Brian X. Chen, writing for the NYT:
The company on Tuesday reported $16.1 billion in revenue from
“greater China” — which includes mainland China, Hong Kong and
Taiwan — in its first fiscal quarter, up 70 percent from the same
period a year ago. Canalys, a research firm, estimates that Apple
is now the No. 1 smartphone maker in China.
The conventional wisdom just two years ago was that Apple needed to create a low-priced iPhone — not just lower-priced but low-priced — to compete in “emerging markets” like China. That would be true if Apple were interested primarily in market share. But they’re not, never have been, and never will be interested primarily in unit sale market share. Far from hurting them, Apple’s commitment to the premium end of the phone market is helping them separate from the pack in China.
An aside, on Chen’s lead:
Apple is famous for setting trends.
In China, though, Apple has found success by following one.
For years, Apple rivals like Samsung offered large-screen
smartphones. Although the bigger phones sold well in China, Apple
held off on releasing a similar model, and the country remained a
weak spot. But Apple introduced its own versions last September,
and now the sales spigot is wide open.
There’s no question that Apple was a latecomer to the bigger-display phone game, and I think few would dispute that the iPhone 6 and especially 6 Plus display sizes played a primary role in this quarter’s breakout success in Asia. The Asian market prefers bigger phones. (From Tim Cook’s remarks on the analyst conference call: “There is clearly a geographic preference difference, where some geos would skew much higher on their preference to iPhone 6 Plus than other geos. So it’s something that’s not consistent around the world.”)
But China was far from a “weak spot” for Apple prior to the iPhones 6. In the year-ago quarter Apple had $8.8 billion in revenue in China, up from $6.8 billion the year before that.
Greg Kumparak, writing for TechCrunch:
This page charts the past record
Until today, Russia’s Gazprom (the largest natural gas extractor
in the world) held the record at $16.2 billion in a quarter.
Apple now holds the record: $18.04 billion in profit, fiscal Q1
For reference, that means Apple makes around $8.3 million dollars
per hour in profit (24 hours a day).
Of the current Top 20 record holding earners, 15 are Oil/Gas
producers — primarily ExxonMobil and Shell. The other five are
all Apple, over various quarters.
Who knows how long Apple’s ride at the top will last, but this is a moment worth savoring. A toast to the value of good design.