Apple (NASD: AAPL) is heading into dangerous territory – the firm recently regarded as an innovation factory has failed to release remarkably new products in years. Despite the success of the I-Pad and I-Phone, their effect on the firm’s bottom line is beginning to diminish.
We cannot overlook that in the past decade, the firm has been in unprecedented territory, creating device after device of new technology that consumers eagerly bought, no matter what the price. Many market observers now worry if Apple’s success has reached it’s crescendo, and will descend back into the territory it occupied in the mid-1990’s, a struggling tech company without Steve Jobs as its leader.
The criticism is probably unfair, or at the very least, misplaced. Tim Cook is not the reason the firm has been struggling in recent quarters, or at least, he’s not the whole reason. The firm needs another game changing device, and recently, it’s failed to provide it. The firm still has the best and the brightest under it’s roof, and all of this could change in an instant – but, for now, the market is punishing Apple for it’s recent failures.
The criticism extends beyond the US market too. In a televised exposé on China Central Television earlier this month, the network accused Apple of only repairing broken or faulty parts within its products for Chinese customers, where customers in other markets would have been issued a replacement device entirely. Apple responded online, maintaining that it fell well within local laws and regulations and that the company highly respected its Chinese customers. “Empty and self-praising” were just some of the words used to describe Apple’s response to complaints over its Applecare warranty program. Its warranty policies and “dealings with journalists” have piqued the attention of the China Daily, the newspaper run by China’s Communist Party.
The firm faces increase competition, at home and abroad. Tech companies have flooded into the space Apple largely created, and while the firm may still have the ‘cool factor’ that the other firms doesn’t, that too can wane in time. Consumers and investors have been clamoring for the long rumored Television to finally be announced, but no recent news indicate that is on the horizon. Monitoring Apple suppliers in China, there is no spike in demand for glass tv panel displays, or the components needed to manufacture televisions. So, the horizon for now only has continued improvements on their existing product line. Then again, this is Apple – and it can all change in an instant. That hope alone is enough to keep the stock somewhat elevated for a while.
