While Apple has been at the top of its game for a long time flaunting it’s year on year success, recent instances are making fans and investors think otherwise. Here are 7 times when Apple made headlines, shocking everyone.
1. When Facebook banned iPhones
Apple is known for its sass and we all know it is best not to mess with Siri. But Facebook’s CEO Mark Zuckerberg doesn’t quite agree. Right after the Cambridge Analytica scandal Apple’s CEO Tim Cook dissed Facebook’s business model by saying “The truth is, we could make a ton of money if we monetised our customer data – if customer was our product. We’ve elected not to do that. We’re not going to traffic in your personal life. Privacy to us is a human right. It’s a civil liberty.” An infuriated, Mark didn’t take these comments lightly and ordered Facebook executives to use Android phones instead of iPhones. His reason behind this order – more users access Facebook on android than on their iPhones. That’s not all, apparently reports suggested that Facebook even hired a PR firm called as Definers Public Affairs to push negative content on its rivals – Apple & Google. The articles criticized Google and Apple for their own unsavoury business practices, one of which even called Mr. Cook a hypocrite for blaming Facebook over privacy when Apple themselves collect reams of data from its users. (Remember iCloud leaks back in 2014?)
2. When Netflix cut off Apple’s pocket money
Every time you buy a paid app or make a purchase on an app using Apple’s in-app payment system a cut of that transaction goes to Apple, sort of like paying a tax. So for instance every time a user subscribes for Netflix using Apple’s in-app payment system Netflix has to give Apple 30% (which falls to 15% if you’ve been paying for Netflix for a year) of that transaction. And, that’s a LOT of money. So Netflix thought why share 30% of its revenue with Apple and decided to no longer support iTunes as a method of payment for new members. This move means new members now have to pay for Netflix through its website, rather than through Apple’s service, not a big deal for consumers at all. But for Apple that means a loss of $256 million in annual revenue which is approximately 0.07% of its total revenue. Netflix is in fact the top-grossing app on Apple app store.
But Apple shouldn’t worry it has multiple revenue sources. Other than the iPhone, Apple gets a big chunk of its revenue from services like App Store, Apple Music, iCloud etc. This means ladies, it’s always good to have multiple revenue sources for your business because if one fails you have other sources to bank on.
3. When their billboard ads were wayyyy out of line
Just recently at the world’s largest gadget conference in Las Vegas, Apple took a not-so-subtle dig at its competitors with a huge ad on a hotel billboard that read “What happens on your iPhone, stays on your iPhone”. Now this slogan has for decades been associated with men’s abuse of power against women. For instance, during the hearing of Brett Kavanaugh, the phrase “What happens at Georgetown Prep stays at Georgetown Prep” became a cultural meme referring to his partying as a young man over the years. Not to forget through this ad Apple is subtly dissing its competitors Google, Amazon, or Samsung for not respecting their user’s privacy. But wasn’t Apple caught up in a celebrity photos leak in 2014? I guess what’s happens on your iPhone doesn’t really stay on your iPhone after all!
Misguided advertisements should be a BIG NO, NO Apple!
4. When Trump was being difficult
Although Apple is an American brand everyone knows most of its products are not manufactured in America but they’re manufactured in China because of its affordable labour market. Till date, this sophisticated supply chain (involving hundreds of suppliers, a web of factories and shippers) created by its CEO has accomplished to keep up with the global demand for Apple products. But thanks to Mr. Trump who’s not so happy about China profiting from this, Apple might be forced to move their production to America. Or they might have to face the heavy tariffs imposed by Trump on products imported from China. Both ways Apple is in a pickle. One, it will be extremely difficult for them to find a different market to match China’s scale and skills. And two increasing its price to pay for the higher tariffs will make the already expensive iPhones even more expensive, upsetting all buyers.
5. When their own strategy backfired
People don’t buy iPhones like they used to before. With Apple releasing 3 new phones almost every year, each phone pricier than the older model and having minimal differences from the other, users prefer sticking to their older models. And instead of buying a new phone, they prefer purchasing new batteries to extend their iPhone’s battery life. A trend that was fuelled by apple when they cut their battery prices from $79 to $29. This was actually ‘damage control’ move by Apple in response to news that said the Apple software deliberately slowed down iPhones with older batteries. But it backfired and Apple is now in a dilemma – On one hand they want iPhones to be durable and long lasting so users see it as a worthy investment and end up buying more in-app purchases (such as iCloud storage) adding to their revenue. But on the other hand lesser people buying newer iPhones is also bad for the business because sales decline!
6. When Chinese fans switched to Android
2 months ago Apple announced that they would no longer disclose how many iPhones, Macs and iPads they sold because it’s not an indicator of their business strength anymore. For years the number of units sold was a huge metric to highlight Apple’s growth. But the CEO believes that the iPhone business has reached its peak and the business will now slow down. This obviously didn’t go well with investors and Apple shares dropped more than 30% since. It fell so much that it’s now worth less than some of its biggest rivals Microsoft, Amazon and Alphabet, Google’s parent company.
Reduced iPhone sales in China and other emerging economies is mostly responsible for this decline. And there are a couple of reasons for this decline– The ongoing U.S. – China trade war, a slowdown of the general economy, competition from local phone makers, competition from other affordable smartphones, and ever-increasing rates of the iPhone. All this has forced Apple to drop its elitist attitude and resort to offering discounts, offers, and EMI options.
7. When their CEO sent a dramatic letter to Apple investors
Early this year, Apple’s CEO sent a letter to its shareholders announcing that their initial revenue estimate of $89 to $93 billion in the first quarter (January, February, March) of 2019 had to be revised to $84 billion dollars. This announcement means a drop of almost $9 billion from the earlier estimate. Since CEOs rarely send such letters to shareholders it obviously worried investors and triggered a series of events at Wall Street.
1. Following the announcement, investors panicked and started selling their shares in Apple.
2. This led to a drop of almost 9% in Apple’s share price! (From $157.92 to $143.80)
3. Now since Apple forms a large part of the S&P 500 (The American version of NIFTY & SENSEX! S&P 500 is an American stock market index that indicates how the American markets are doing) a fall in Apple’s shares naturally lead to fall in the overall American stock markets (S&P 500 fell by 2.47%)
4. Also because Apple is a huge multinational company involved with so many other companies when Apple’s share price falls it affects those companies as well. So people sold shares of other companies too. It was just like a Domino effect!
Despite all this lots of people still own and love their Apple products. And lots of investors directly or indirectly (through mutual funds) own its shares. So, while this might not be Apple’s best time, they’re still a large company that matters. In fact, some might say the markets overreacted and this is actually a good time to buy shares of Apple since they’re trading at such a low value. We still love our Apple products and probably thinks it’s a good idea to hold onto it, but what’s your take on this matter?