It's amazing that how everyone but Apple knows how to run their business.
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Pretty much. The corrolary is more interesting though: everyone, including Apple, thinks this is a "business" problem. It's not, it's technical.
The bottom line is that phones are commoditized at this point. There's nothing (statistically nothing, that is -- obviously everyone has preferences) that people want them to do that they don't, and there's nothing that a premium product can offer that the cheap ones don't have too.
That's not something Apple or Stratechery or posters here can fix. It's just the way technology works. It's the same thing (almost exactly the same thing) that happened to Apple in the early 90's. Sure, macs were still better. But they were better and more expensive and for 95% of what the median purchaser (which at the time meant "desk worker at a US business") wanted to do a PC clone running windows was perfectly fine. So Apple got trapped in a slowly shrinking prestige niche.
Now, eventually they broke out with exciting new products and new markets that drive new success. But that's not a "business decision".
The author of this piece did predict their China problem, so you might want to give them a bit of leeway. They’re not some armchair commentator.
I think such predictions are pretty much useless in most situations. For example, there are so many experts now who predicted the stock market crash. I follow a guy on Twitter who has been predicting global economy meltdown forever. These days he is suddenly looking like a prophet even though the meltdown has not totally started yet! Saying that Apple will have problems in China means nothing unless someone provides estimates for the losses.
This article uses all the data that is publicly available and yet claims that somehow Apple executives missed all that.
They're also one or two of the most highly regarded Apple commentators. And they provide examples of how apple execs missed stuff in the past. And apple clearly did miss stuff this last quarter: their guidance was uncharacteristically way off.
Stratechery isn't some random site, but you're comparing it to a guy on twitter.
A precise estimate isn't necessary. His claim was that they would shrink measureably in the first S year after a redesign.
Let's look at it this way. If I make 10 predictions out of which only 1 turns out true and if I keep harping on that 1 successful prediction, does that make me a good analyst? If you think yes, then I will be happy to be your investment adviser!
Edit: The guy I follow on twitter is not some random dude. He is an analyst and makes some great points.
What do you think business analysis should just disappear?
Success masks problems.
See also the Innovator's Dilemma
My belief is that Tim Cook's has been running Apple based mostly on inertia from Steve Jobs. As long as things worked mostly the same way, then not much needed to be changed to the formula. It's "easy" to increase revenues, when you benefit from the previous popularity of iPhones, a lot of previous revenue, and most of what you need to do involves launching the iPhone in new countries. Actually, BlackBerry benefited from a lot of these factors, too, when its revenue kept growing outside of North America, despite losing market share rapidly to the iPhone in the US.
But now that things are getting more different, such as prices becoming much higher, a possible economic downturn around the corner, mid-range phones becoming "good enough" for most people, the loss of subsidies from carriers, and so on, Tim Cook is getting a little "lost" in all of this, and doesn't know the best way forward. Worse, he may have already chosen a way forward (Apple becoming more "fashion-focus" for instance) and it may be the wrong way.
Between AirPods & Watch Tim Cook has overseen the creation of a Fortune 300 company within Apple in the wearable space. Not sure why people give Tim Cook shit. The fact of the matter is that all of tech is struggling at the moment with China tensions & overall economic volatility.
This was probably a good time for Apple to broaden their mac range, and expand their computer market share. Under the Steve Jobs era, the Mac was always a premium product, and focused on capturing industry profits rather than market share. I think switching to focusing on market share would have been a very good change for them to make.
As a high end product, the mac is likely not gonna make them much more profits than it already does. However, additional market share would further strengthen their customer base for the areas which will make them money. iPhones, iPads, and services.
If Apple were to release a 5-600$ laptop it likely wouldn't make them much money, but it would create more mac users, and I suspect mac users are significantly more likely to own iPhones and pay for services like iCloud and Apple Music than Windows and Linux users.
And TBH, Apple has a massive market in the enterprise just waiting for some competition. You can see this in the rapid and popular uptake of Google @ Work services, and Chrome OS in the enterprise and education services. People were looking for a simpler alternative to the entire MS Exchange ecosystem, and once again, while these may not have been massive money spinners on their own (though they definitely could have been that as well), they would form a strong solid base to sell iPhones to.
> I think switching to focusing on market share would have been a very good change for them to make
This would kill Apple. It's a profit share company. It's a profit share culture. Customer and culture are tightly knit; you don't change one without altering the other.