For many while it might seem like Apple sits atop Olympus, untouched by earthly concerns as it churns out must-have gadget after must-have gadget , its clear that the Cupertino tech giant is simply yet another mere mortal, deeply affected by the continued economic sluggishness across America. In fact, Apple’s earnings report fell short for a second consecutive quarter, meaning that like every other retailer on the continent, its hoping it to will find its (economic) saviour this coming Christmas season.
But in this down-turned economy the problem for Apple is that its devices, while greatly desired, are getting farther and farther out of reach for those struggling to make ends meet, meaning that as consumers cope with a drastic rise in gas and the associated cost of living, they simply have nothing left in the kitty to purchase their favourite gadgets.
Of course we already know Apple’s response to this struggling economy: release multiple devices simultaneously and watch them compete against each other for the same finite amount of tech dollars. While the company is, in the words of CEO Tim Cook, experiencing one of the most “prolific periods of innovation and new products in Apple’s history,” it’s clear the darling of the tech world has lost its sense of timing…and with it perhaps its dominance.
There’s no question that Apple has pinned its revenue hopes on the upcoming holiday season, evidenced no more clearly than the fact the company ditched its traditional segmented release schedule in favour of flooding the market in early Fall. The company, having experienced multiple quarters of missed expectations, has seen a mixture of positives and negatives from its product line-up of late, as the company sold more iPhones than expected, but drastically fewer iPads than analysts predicted.
Of course with any earnings report that misses the mark Apple’s quarterly results came with a host of explanations, including the fact that iPad sales slowed as consumers waited for the release of the iPad Mini. Now that its here, priced well above its popular competitors, we’ll see if sales pick up.
The problem, as I’ve said before, is that Apple seems to think its invulnerable to economic concerns, knowing that hype alone with drive consumers to dig as deep as they need to in order to get their hands on the latest Apple gadget. But what Apple will soon find is that as the cost of living continues to increase consumer purse strings will close.
While premium pricing as always been part of Apple’s modus operandi, in today’s economy the company may have over-played its hand with these quick successive releases, as such financial conservancy will mean that most consumers can buy one Apple product this holiday, but certainly not two or three. In fact, customers will soon find that for the same amount of money they can purchase two affordable competitor’s gadgets instead of one expensive Apple one, and its then we’ll see just how enamoured the public is with the Apple brand.
In the end, given the sluggish economy, the more affordable competitors, and the introduction of Microsoft’s Windows 8, its clear this holiday might not be provide Apple the economic salvation it’s looking for.