Tim Cook battles dreary sales due to ‘stale’ line-up of gadgets
HE RUNS the world’s biggest technology company, but Tim Cook will be happy to say goodbye to 2016— a year of dreary sales and scathing reviews.
FOR TIM Cook, the end of 2016 could not have come soon enough.
Apple’s chief executive has been battling lacklustre results at the Cupertino, California-based tech giant, with critics blaming ho-hum sales on an increasingly “stale” line-up of gadgets — including the iPhone.
The New York Post reports the most recent evidence came Friday, with a report from Japanese news agency Nikkei that Apple will slash production of the iPhone 7 by about 10 per cent because it “has sold more sluggishly than expected.”
The downbeat news echoed this spring, when Mr Cook was forced to announce a dismal milestone: Quarterly sales of the iPhone — by many measures the most successful consumer product in history — dropped for the first time ever.
“This, too, shall pass,” Mr Cook insisted on a call with Wall Street analysts in April. “The future of Apple is very bright.”
Some investors aren’t so sure. Mr Cook had pleaded that the iPhone 6S — whose sales dropped 15 per cent and 16 per cent in the spring and summer quarters, respectively — was more or less a placeholder product ahead of the iPhone 7.
But when the iPhone 7 got unveiled in September, the biggest difference reviewers found between it and the 6 models was that it lacked a headphone jack — a switch that many actually found annoying.
The news was the latest disappointment for Apple shareholders, who have weathered a bumpy ride this year. The stock rose 10.8 per cent this year, but that’s short of the Dow Jones industrial average, which added more than 15 per cent.
It’s not just stale product updates that are now plaguing Apple. Lately, execution under Mr Cook looks slipshod.
The iPhone 7’s painful pivot for customers came as Apple announced the AirPods, a wireless set of headphones to accompany the jackless iPhone 7. But the $179 AirPods soon got delayed past a promised October shipment date and weren’t available to many customers until after Christmas.
The snafu was a particular embarrassment for Mr Cook, who was tapped as Steve Jobs’ successor in 2012 partly for his prowess in running a tight supply chain for products.
Touring the New York Stock Exchange earlier this week, Mr Cook claimed the AirPods were “a runaway success” — a typically vague pronouncement with no numbers in it.
Separately, this fall Apple received a mixed reception to a long-awaited upgrade the MacBook Pro. The biggest redesign of Apple’s flagship laptop in eight years added a sleek “touch bar” to replace the row of function keys above the keyboard.
Reviewers mainly noticed, however, that the new MacBook Pro’s battery life fell short of the previous model’s.
Looking ahead to 2017, many are pinning hopes to the next iPhone. A rumoured “iPhone 8” is expected to get a significant overhaul, possibly with a bigger screen and a body that’s made entirely of glass.
Still, many investors remain troubled about the company’s direction, as new projects including an Apple car have reportedly run into problems.
“There’s no question Apple’s best days are behind it,” Bernstein analyst Toni Sacconaghi said earlier this year.
In addition to its product problems, Mr Sacconaghi continues to cite the challenge of tacking any significant gains onto Apple’s already massive market cap, which is still the world’s biggest at nearly $620 billion.
Indeed, the biggest reason to buy Apple shares, according to many bulls, has nothing to do with the company’s products. Rather, it’s the prospect of a massive stock buyback in the event that Apple gets a tax holiday from the Trump administration to bring its mountain of overseas cash back to the US.
This article originally appeared on the New York Post and was republished with permission.
Originally published as Tim Cook battles dreary sales due to ‘stale’ line-up of gadgets
