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Tim Cook points out cheaper replacement batteries equals fewer iPhone upgrades

By Greg S · 33 replies
Jan 2, 2019
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  1. As Apple is preparing to make adjustments for 2019, CEO Tim Cook has published a letter to investors with first quarter goals. It is yet another way to lower expectations back towards reality.

    Wasting no time, Cook throws out revenue and expense numbers followed by the reverberating message that has been echoed across nearly every publication that covers Apple, "our revenue will be lower than our original guidance for the quarter."

    Changing market conditions are cited as a major reason why Apple's own estimates have not quite aligned with actual outcomes. China's economy showed the second lowest GDP growth during the second half of 2018 within the last 25 years. As a market where Apple expected to drastically expand within, a weak period stifled any hopes of major growth.

    Coupling a low performing second half with immense trade tensions certainly did not help. Whether the reasons were political or purely economic, Apple's stores and channel partners in China saw significantly reduced foot traffic.

    Throughout the rest of the world, iPhone owners were still not very interested in upgrading to the latest iOS devices. Cook points to a lack of subsidies offered by wireless carriers as well as more customers buying replacement batteries for their existing phones.

    After the whole throttling controversy, it is very telling why Apple hid that fact from consumers for as long as possible. Cook himself has now indicated that allowing customers to get affordable replacement batteries reduces the rate of upgrades.

    Onto the positive notes, Apple's wearables division grew nearly 50 percent year-over-year. Apple Watch sales really took off and demand for AirPods remained strong. A new iPad Pro also offered numbers pleasing to investors despite iPhone woes.

    Going forwards, Cook notes that Apple will continue to push incentive programs to encourage more iPhone upgrades as well as offering financing programs. Easier and faster trade-in processes are being worked on to try and retain as many existing users as possible.

    At the end of the day, Apple is still going to churn out astronomically high sales figures and may even be rewarding investors with record earnings per share figures. This has been a lesson in setting expectations at the appropriate levels, but also a time of learning for Apple that limits on smartphone pricing have been reached for the masses.

    Permalink to story.

  2. captaincranky

    captaincranky TechSpot Addict Posts: 14,976   +4,010

    Aw, poor baby.
  3. Scshadow

    Scshadow TS Evangelist Posts: 567   +206

    Its pretty simple. When you focus on delivering value and actual innovation, rather then planned obsolescence, then you don't have to worry about the consumer wising up to your BS and looking for alternatives.
  4. onestepforward

    onestepforward TS Booster Posts: 111   +42

    Apple iPhones receive updates for at least five (5) years. Most Android phones receive no updates at all. Those that do receive updates generally only do so for two (2) years - and that applies to almost all premium Android phones. So, your comment makes you seem incredibly uninformed.

    BTW, the correct word is "than", not "then".
  5. mrtraver

    mrtraver TS Evangelist Posts: 426   +135

    Gee, it's almost like many people can't or don't want to spend a thousand dollars for a phone.
  6. m4a4

    m4a4 TS Evangelist Posts: 1,460   +1,035

    And you seem uninformed and misleading.
    First of all, the OS's are not similar enough to be compared with something as simple as "system updates", as Android is much more modular. OS updates on Android aren't as relevant compared to iOS because systems apps are updated separately from the Android OS.
    Then when it comes to lower-gen iOS devices, they tend to lose more features than an Android device would in similar situations. Sure, the older iOS devices get updated for longer (with less and less features than their newer counterparts), but Android system apps get updated for many years too (which are more on par with their newer counterparts).

    Oh, and my favorite part is that Apple has been caught (and admitted to) slowing down their older devices with updates (claiming battery performance). Which, coincidentally, helps push that planned obsolescence that Scshadow mentioned =P
    Last edited: Jan 3, 2019
  7. MasterMace

    MasterMace TS Booster Posts: 84   +42

    in addition to what a previous poster replied-

    Due to the fact Apple has been well known to intentionally slow down their iPhones with software updates to force users to upgrade, any intelligent individual using an iPhone since the 3gs knew full well never to update their iPhones. Your point of "Apple updates their phones for 5 years" holds no value when you translate it to the intended effect: "Apple tries to slow users phones for 5 years after they are released to force them to buy new crap while preventing failures".

    The primary reason nobody buys older iphone models is this exact reason. you buy a phone and update the software. If you do that with an Android phone, it's up to date and working fast. If you do that with an iPhone you have an incredibly bad phone.
    ForgottenLegion likes this.
  8. onestepforward

    onestepforward TS Booster Posts: 111   +42

    You wrote nothing of any value. How is writing the truth of the lack of Android updates misleading. It is factually correct!

    iOS 12 improved the performance of all Apple devices and it is now on the majority of iOS devices.

    Android devices still don't get updates, making them quickly obsolete. Yep, you remain uninformed. Unless can add something of actual value, please don't bother responding.
  9. Puiu

    Puiu TS Evangelist Posts: 3,450   +1,919

    The only iOS update that improved performance for all devices (not by much mind you) and the reason is simple: they removed some of the intentional code that slowed down older devices in the previous IOS updates because of the whole "planned obsolesce" debacle. They didn't get sued because of nothing and this was just them trying to throw breadcrumbs to their fanatic fans.

    Any good update Apple makes is the second coming of Jesus and all of the bad updates are just the users not holding the phones correctly.
    ForgottenLegion likes this.
  10. onestepforward

    onestepforward TS Booster Posts: 111   +42

    So, Apple put-out some bad updates, which were corrected with iOS 12. On top of that, they support their iPhones for five (5) years or more. Together, that means that iPhones have built-in obsolesce.

    On the other hand, most Android devices get no updates ever and only some (mostly premium) phones get at most two (2) years of updates. So that means that there is no built-in obsolesce.

    It is really hard to deal with the logic of some of the people who feel the need to respond on these fora!
  11. captaincranky

    captaincranky TechSpot Addict Posts: 14,976   +4,010

    Jeez. Exactly who do you think you are?

    I mean really, why not just phase your answers so that we poor uninformed Plebeians can understand them?

    Perhaps sic: "I know it all, you know nothing. So shut your yaps, I get to talk last".
    ForgottenLegion and RebelFlag like this.
  12. captaincranky

    captaincranky TechSpot Addict Posts: 14,976   +4,010

    Then maybe you should leave.
  13. Puiu

    Puiu TS Evangelist Posts: 3,450   +1,919

    Since when are these updates just "a couple" when it's been going on for years and since when does 1 update fix everything? All iOS12 did was tweak how he CPU ramps up. TL;DR they dilled down the intentional throttling to a more manageable level. It's like saying that it's ok to punch someone in the face because you put a bandaid where you hit him.

    Are you even listening to yourself? This goes beyond you giving excuses and are putting Apple on a pedestal like it's some sort of god. You are weird dude O_o

    You also don't know the meaning of the word "obsolete". The only thing that made my 6-7 year old Android phone obsolete was the hardware which could not handle the larger apps (too little space and RAM). I never got an update that slowed down the CPU and any battery issues were easy to fix.
    Last edited: Jan 3, 2019
    ForgottenLegion and Forebode like this.
  14. m3tavision

    m3tavision TS Maniac Posts: 264   +170

    I think you are missing the point....!

    YOu buy a phone for $800+ with said performance... then a year later find out that your phone and it's specs don't mean anything, because the company sold you a defective product in the form of a battery that was known (to the company) to go bad.. and degrade YOUR PHONES PERFORMANCE.

    Apple knew this and hid it from the customers....

    Who cares about Software upgrades, when your hardware is defunct and is planned/designed to fail after just a few years..? (What does Android OS have to do with anything..?)
  15. Theinsanegamer

    Theinsanegamer TS Evangelist Posts: 1,550   +1,768

    Of course Tim Cook, a man who has no love for trump, would try to blame trump's "trade war", ignoring we have been at a massive deficit to china for years now, and it was gonna change sooner or later. A trade deficit that contributes a tiny amount to the asking price of the product, a price that apple, the richest company in the world, could easily absorb to keep sales high.

    The "trade war" has nothing to do with Apple jacking their phone prices so high only the 1% can afford them. Most middle class people cannot justify $1000 for a blinking brick with facebook on it. Even many upper class people balk at paying that much for a phone. Sure, some iSheep will buy it, mush as some android sheep will buy the latest galaxy phone every year, but most people will avoid it, and apple fooled themselves into thinking they could sell $1K iphones like they could $450 iphones, because the average silicon valley tech bro is completely ignorant with how most of the country lives, and thinks $1000 phones are just par for the course.

    It also could have nothing to do with apple removing the headphone jack, begin caught slowing down iphones to cover up the use of faulty batteries, or shipping devices of such poor quality they bend IN THE BOX. Nope, its all trump's fault, apple cant be held responsible for any of its poor decisions!
    iOS apps are tied to the iOS version. Once those 5 years are up, many apps will no longer be able to update, and you will be stuck with obsolete, no longer supported software.

    Meanwhile a 7 year old android phone can still run all the latest apps, and said apps are updates independently of the OS itself. Try running the latest apps on an iphone 4s and see how that works for you.
    senketsu and Fimbulvetr like this.
  16. kira setsu

    kira setsu TS Addict Posts: 136   +114

    Phones have reached the point where there's no point upgrading, they're very powerful now and in the case of apple which has always had an OS that ages well paired with great hardware doing that has sorta bit them.

    this was bound to happen, at this point the smart move would be to release a great product at a low price and go after the "normal" android user, but since apple is stuck on being the fancy company that wont happen.
  17. Forebode

    Forebode TS Booster Posts: 191   +44

    "Tim Cook points out cheaper replacement batteries equals fewer iPhone upgrades"


    And here I hoped to read about customers coming to their senses about buying a new phone every year.
  18. Forebode

    Forebode TS Booster Posts: 191   +44

    Software supported for 5 years, sure, that's great. But where's the hardware support? I'm pretty sure I can buy parts for an android without it getting stopped at customs. Is it so difficult to design for a removable battery anyway for anyone?
    Reehahs likes this.
  19. QuantumPhysics

    QuantumPhysics TS Evangelist Posts: 1,254   +910

    #1 In The Free Market, Apple should be allowed to conduct business as they see fit.
    Personally, I love my iPhone XS MAX. I love that it is waterproof. I love that it's not made of cheap plastic. I love that it's made the way it's made. The only thing I'd change is adding a home button/ Touch ID to the back where the Apple logo is.

    If YOU don't like it - then don't buy it.

    I am sick and tired of anti-Free-market, anti-Capitalism which is mostly coming from foreign companies who know they can't compete with Apple - or can't earn any real profit because people want Apple more than their garbage.

    #2 I see a logic gap here.

    There are a number of people who won't upgrade annually, but there are plenty who absolutely will. If I'd stayed in my iPhone 6 Plus instead of upgrading to the 7 and X, I wouldn't have waterproofing, 4K camera with 60FPS or longer lasting battery life - not to mention the far faster CPU.

    There are some people who use the phone for basic phone use, but there are plenty others who use the Phone as a "computer". I am the latter.

    The ultimate problem is that the wages of working people are stagnant, or shrinking, and the prices of these devices has increased.

    An iPhone XS MAX 512GB cost more than my mortgage payment.

    It isn't easy selling $1000 phones on a yearly basis. I'm actually amazed at how well Apple has done thus far.

    People who hate apple are butthurt that Apple's dare to make $1000 phones has enticed other companies to do the same.

    That said: basing your profitability on how quickly you sell ridiculously priced devices on a quarterly basis is a recipe for disaster.
  20. ShagnWagn

    ShagnWagn TS Guru Posts: 734   +566

    Please do post evidence of the "lack of android updates". I have my Samsung S5 and S8 in front of me. The last update for the S5 was 1/18/2018. My Samsung S8 was last updated 12/14/2018. So much for your "facts".
  21. Cubi Dorf

    Cubi Dorf TS Booster Posts: 146   +51

    Price is too high. I losing trust in Apples.
  22. koblongata

    koblongata TS Addict Posts: 206   +62

    But cheap battery replacement program also makes iPhones even better investments than any other Andoird phones...
    Android phones usually get abandoned by its manufacturers in 2 (3 if you are lucky) year time... You are stuck with an old OS forever. Really, iPhones retain far far better value than Android phones when you sell it on ebay for some very good reasons.
  23. Lew Zealand

    Lew Zealand TS Guru Posts: 675   +577

    All this fanboy yammering aside, one down quarter means nothing as this happens to Apple and everyone else periodically. The real telling will be how the earnings match the guidance in the following 2 quarters and how Apple responds if those are also down.

    I haven't looked to see if the initial guidance for this Q was above or below the same Q in previous years but if it was lower beforehand, then Apple may be in for a bumpy ride. Señor Cook is supposed to be a shrewd businessman, we'll see how well he does now that he's facing a few challenges, some of his own making.
  24. mark kram

    mark kram TS Enthusiast Posts: 36   +10

    I'm using a 5 year old Lumia 635 running Windows 8.1 until it dies. I don't care if its not supported. I don't care if there are no updates. It does what I want. A cell phone is an appliance, just like a washing machine. It has taken over some of the jobs other appliances used to do like cameras and microphones, but at the end of the day its still an appliance. That means if your frig will run 10 years problem free so should your phone.
    mrtraver and cliffordcooley like this.
  25. captaincranky

    captaincranky TechSpot Addict Posts: 14,976   +4,010

    I won't bother to debate any other points. (Don't own any smartphone, let alone the newest iPhone rendition].

    But to consider Apple "an American company", is an almost totally semantic definition. Granted, their new "spaceship" is here in the US. But beyond that, Apple "outsources" the actual manufacture the iPhone to Foxcconn, who retains almost 100,000 workers in China to physically build the iPhone.

    Add to that, allegations that Apple has substantial holdings in Ireland, to avoid US corporate taxes.

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