Apple Issues Earnings Warning: A Wake-Up Call for the Company?

Hey everyone, it's Dave 2D here, and I'm excited to share some news with you all. So, Apple just put out a letter to their investors warning them of lower-than-expected earnings, and let me tell you, it doesn't look good. The revenues are down by like five to nine billion, which is a significant drop. And to make matters worse, the stock price has dropped by ten percent overnight. Now, this isn't exactly the end of Apple as we know it, but it's definitely not a good sign.

I mean, big companies can take hits like this and still bounce back. There are plenty of publications out there that have written about the "end" of Apple, but I'm here to tell you that stuff doesn't happen often. And even when it does, it's usually just a temporary setback. So, what's going on? Well, according to Tim Cook, who wrote the letter, there are several reasons why Apple's performance was poor.

One of the main reasons is the slower market in China. It seems that people just aren't buying as many iPhones as they expected, and this has had a big impact on Apple's sales. The company is extremely dependent on China to grow their iPhone business, and when things aren't going well there, it can have a ripple effect all over the world. Another reason for the decline is the battery replacement program that Apple introduced last year. This program allows customers to replace their old batteries for just $30, which sounds like a great deal, but it's actually had an unintended consequence.

By making these phones slower as they get older, Apple is essentially encouraging people to buy new iPhones. And when you reduce the performance of your older iPhone, more people are likely to buy a new one. It's not necessarily that people want to buy a new phone; they just don't like the idea of having an old, slow phone anymore. So, even if they didn't intend to buy a new iPhone right away, they're still going to do it because they can.

Now, let's talk about Tim Cook's comments on the economy in China. It seems that people are just not buying as many iPhones as Apple expected, and this is having a big impact on their sales. The problem is that most developed markets are already saturated with iPhones, so there's only so much room for growth. And when you try to push new phones onto consumers, it can be tough to get them excited about the latest and greatest model.

For example, take the iPhone 10 R, which was launched at $750. The reviews were decent, but people just didn't seem to care about this phone. They wanted the "real" iPhone, not some lower-end model that's just a bunch of leftover parts from other iPhones. And when you're willing to spend that kind of money on an iPhone, you want it to be the best possible experience. So, Apple needs to step up their game and make better phones or cheaper ones – those are really the only two options.

Now, I know some of you might be thinking, "This is the end of Apple." But I'm not so sure about that. The company is smart enough to know when they need to make a change, and it's clear that they're already on the move. Tim Cook mentioned in his letter that there will be some big changes coming to the direction of the company, including new releases and updates.

It's going to be interesting to see what Apple comes up with next, but I'm excited about it. After all, even when a company takes a hit like this, they always bounce back. And who knows? Maybe this is just the wake-up call that Apple needed to get back on track.

"WEBVTTKind: captionsLanguage: enHey, how's it going Dave 2D here? So Apple just put it a letter to their investors warning them of lower than expected earnings andIt doesn't look good right the revenues downby like five to nine billion then lower than they expected the stock price dropped like ten percent overnightit was not good news, but aHit like this does not destroy companies a lot of publications like this is the end of Apple. It isn't our leastI certainly don't think it is stuff like this happens. All right stuff like this happens to big companies andFor a company like Apple they're still one of the richest companies out there. There's still one of the most profitable companies out thereIt's not that this won't have an effect on them. But I think there's gonna be a huge wake-up call for the whole companyso Tim Cook mentioned a few reasons in his letter as to why thePerformance was poor and I want to touch on a couple of themHe mentions the slower market in China being a big thingAnd he also mentions the battery replacement program and the effect that that program had onIPhone sales now if you'll remember a little while ago someone discovered that Apple was reducing the performance on their iPhoneswhen they were reaching a particular age or when the battery had degraded to a particular stage andThat was really controversial. Some people were like hey that's fineApple is trying to maintain the functionality of the phone by dropping the performance a little bitBut just making sure that doesn't reboot and other people were like what like what this is this is essentially planned obsolescenceThey're making these phones slower to encourage you to buy a new oneClearly when you reduce the performance of your older iPhones more people are buying new iPhones and whether or not they did it withintent we'll never know but the fact is people bought less iPhones this year because of that battery replacement program because you could just spend$30 and Apple would replace your battery and now your old phone suddenly felt new againNow as for tim's comment on the economy in chinaIt seems that people in china just aren't buying as many iPhones as they expected. And Apple isExtremely dependent on China to grow their iPhone business because almost every other developed market outThere is heavily saturated on iPhones see iPhone only sells flagship devicesBut there's only so many people in the world that are willing and able to buy a thousand dollar flagship phoneThere's a finite number of people who want to spend that kind of money on an iPhoneso right now in our market phone companies are trying to push new phones on us so hard like5g phones smaller notches thinner bezels better this better that but the truth is the user experience on our phones hasn't changed hasn'tFundamentally changed in years like if you're if you're talking about iPhonesthe iPhone 5 or nowlet's say the iPhone seSo like the one that looks like the five that has a very similar experience to the newest latest and greatest iPhonetennis is a lot cheaper like the tennis is thousand bucks theIPhone se is probably like two hundred hundred fifty bucks, but they both run iOS twelveI still have to charge both of them at night whether you have a $200 I phone or a $1,200 iPhoneThe user experience is fundamentally the same right now if I phones want to have better businessIt doesn't matter if it's in Asia China or anywhere else in the worldThey either have to make way better phones or way cheaper phonesthose are really the only two options because all these iterative changes that have been doing year on year just isn't cutting it and youCan see it in the numbers those sales figures. Do not lie. Now. I want to talk about one last thingIt's the iPhone 10 R. This is a phone that launched at$750 and the reviews of it were decentNo one really ripped on the phone like the initial impressions were a little weak with the screen resolution and stuffBut people enjoyed the phone and I think a lot of people thought that for $750 you're getting decent value the problemIs that when people buy iPhones when people want that Apple luxury brand?They want the real iPhonethey don't like the derpy version that they offer once in a while like the iPhone 5c and now the iPhone 10 arePeople want the good good. They want the real iPhoneso people just don't buy the b-tier phone and I think this is something that Apple willAdjust in their game plan going forward and that's really the whole message of this video the earnings warningIs bad news, right?Obviously, no one wants to hear thatBut I think Apple is a company that is smart enough that they're gonna make some big movesThey're gonna make some big shifts in the direction of the company the roadmap of when they want to release things how they're gonna doThings they're gonna change because there's no way that they're gonna ride on this and just watch the company tankThere's no way I'm excited to see what they doIt's interesting that this handout the way that it did but I'm interested what you guys think like is this what you expected is this?Theirs I personally don't think it's the end of AppleI think I know some of you guys do but I'd like to hear your thoughts. Okay. Hope you guys enjoyed this video thumbsWe liked it subs if you loved it and see you guys next time\n"