On the 9th of September, Apple released its new product iPhone7&Plus. On the 25th of October, Apple announced financial results for its fiscal 2016 fourth quarter ended September 24, 2016. It can be seen that the sales of iPhone7 decreased and the revenue of Apple declined. According to this situation, and together with the change in Apple’s product life cycle (as my classmate mentioned in his blog https://blogs.ubc.ca/lucasjwong/), I would like to give some analysis from my point view.
Apple’s serious problems:
Low production capacity cannot satisfy the large quantity of demand.
Every time Apple releases its new products, consumers usually cannot get them in a short time and even though some of consumers booked it before. iPhone7 can be a good example. Both online and in-store storage is running short especially for the Iphone7 Plus.
The PODs of Apple seem to be vanished these years.
All smartphone brands are trying to improve phones in the same way. For physical features, less weight, a larger size of screen and a longer battery life. For technology, Android is getting better and is able to compete with IOS. At the same time, Apple’s new innovations are not attractive enough to beat their competitors. It might be because the technology of smartphone is getting matured.
Through the problems to see if the change in product cycle helps:
“Moving to the three-year cycle also creates greater anticipation.”
I agree with my classmate that “Moving to the three-year cycle also creates greater anticipation.” The three-year cycle is beneficial for Apple’s innovation and problems solving, because a longer time is likely to make a greater improvement. I think this is not only my thought, everyone is likely to think so.
“The key for Apple is to capitalize on this anticipation to further promote its brand.”
Such anticipation helps promote products efficiently so as to boost the sales. Product with longer waiting time usually attracts the public’s attention and arouses their curiosity, so people will respond actively once Apple starts to promote the new product and consumers are more likely to buy a product that takes more years to invent. At the same time, high expectation and confidence make the demand for Apple stock in the secondary market increase so the stock price of the company will soar, which increases the value of the brand.
(To see the 4th quarter data summary:q4fy16datasummary)
To sum up, Apple has some problems which are the huge obstacles on its development way. It has to fix them so as to develop further. Changing to three-year cycle can help Apple to get over the challenges and it is a good strategy to adopt.
(430 words)
References:
http://www.apple.com/newsroom/2016/10/apple-reports-fourth-quarter-results.html
http://www.cbc.ca/news/business/apple-earning-fourth-quarter-1.3820749