Stagnant Apple Needs to Impress

by Jeff Wiener on July 29, 2013

As MacNewsWorld writer John Mello notes, “Now that the prince has arrived, the world can return to waiting for Apple to give birth to its next exciting product” But with several years of incremental upgrades and, to be quite honest, little to be really excited about, does Apple still have what it takes to separate itself from a mobile pack that has be given years to catch up?

While one might hope to hear company CEO Tim Cook channel a little of the cocksure attitude of the late Steve Jobs, when asked if the company had any products in the works that could move its stagnant growth needle, Cook replied, “We’ll see.”

Regardless of what Apple may actually have in the works—be it wearable technology, budget iPhone options, phablets or whatever else—there is a disturbing meekness that is emanating from Apple, a humility—for lack of a better term—that we simply haven’t seen before. While we all hope Apple is simply subverting our expectations for what the company really has in store, the reality as it stands is that Cook’s company comes across as weak…and in this market that means death.

During the company’s third quarter earnings call last week, Cook revealed what we’ve all known for some time now, Apple is stagnating. The company’s revenues for the quarter were noticeably flat compared to the same period last year — US$35.3 billion in 2013 compared with $35 billion the year previous. Further, net profits were down — 6.9 billion compared to $8.8 billion in 2012, and the company’s earnings per share also dropped, from $9.32 a year ago to $7.47 today. The most telling metric, however, was the change in Apple’s gross margins – down to 36.9 percent compared with 42.8 percent in 2012.

While Cook acknowledged the flat growth for the company, there is still a great deal of excitement around the Apple brand, because lets face it, even though the company has stagnated over the past few years, its still one of the most popular tech company’s in the entire world. So what does Apple need to do to reverse its flagging fortunes?

The answer, as we’ve already hinted at, is a return to innovation. While the passion for Apple has simmered significantly, it won’t take much at all to stoke those embers back into a roaring flame, meaning something as expected as an iWatch or some other wearable, or even a willingness to enter into burgeoning mobile markets around the world could renew investor confidence and once again send Apple soaring into the stratosphere.

In my mind, while moving into budget markets is an absolute must, it’s an area that Apple must tread carefully. If Apple does offer a mid-tier priced iPhone, a budget device if you will, there is a real possibility that it will destroy the company’s only consistently viable product, the iPhone. As we saw with the iPad Mini, offer customers a cheaper option and they’ll go for it. The regular iPad line has yet to recover.

Truth be told, what Apple needs to do to win back its rapid North American fan base at least is not offer a cheaper iPhone—save that one for foreign markets—but offer something we haven’t seen before, something new, something fun, something that not only fits into our technological lifestyle, but redefines it. Apple did it with the iPhone, it did it with the iPad, and I believe it can do it again.

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