The Poisoned Apple

by wullersd

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Yesterday Apple unveiled their two new iPhones, the 5c and the 5s. While Apple congratulated itself in the usual manner, the world is not that enthusiastic anymore.

“Awesome”, “cool”, “remarkable” – Tim Cook has even tried to copy Steve Jobs’s stage vocabulary to come closer to the original. He, however, remains out of reach. While the former CEO and worshipped Apple founder surprised and revolutionized several markets with incredible innovations, Tim Cook even fails at silencing his employees and subcontractors about the fact that there is nothing new to report.

The only thing noteworthy about yesterday’s event and the only thing that is heavily reported on is the pricing. Analysts had expected that the c in 5c would stand for cheap. Instead, it just stands for color – or cupidity. According to Engadget (http://www.engadget.com/2013/09/10/apples-iphone-5c-isnt-low-cost/), Apple saves truckloads of money producing the 5c compared to its technologically identical predecessor. At the same time the price drops by just 17%, even though a truly new 5s hits the shelves simultaneously.

Sticking to the old pricing policy has surprised analysts a lot but the Chinese even more so. China has become the single largest market for mobile phones. And it’s a market that is dominated by the world’s largest mobile phone provider, China mobile, with about 740 million customers. The whole planet apparently expected Apple to target this gigantic easy-entry market with a new line of low-budget phones to reclaim lost market share and gain some traction in Asia.

When Apple’s marketing VP, Phil Schiller, burst that bubble, the iShare took a blow and lost about 3 per cent yesterday and has been losing an additional 6 per cent so far today. While most analysts did not take the news so well, some positively framed the move as a natural consequence to Apple’s identity as a producer of luxury goods and enabling the tech giant to keep high margins (e.g., http://www.cnbc.com/id/101023198). This view is not shared by many.

While the majority of stock market experts is rampaging about Apple coming with a super-expensive, colored knife to a gun fight, life style commentators were more disappointed by the lack of innovation. Sure, the iPhone 5s stacks a fingerprint sensor and – more importantly for tech-savvy Cupertino fans – makes the jump to a 64 bit architecture. And of course Apple advertises both as uber awesome. But that’s like introducing the first motorized vehicle and then trying to sell leather seats as an equally astonishing innovation.

The iPhone 5s is a really well-crafted high-end smartphone, no doubt about that, but Apple has set the bar far higher for themselves – maybe too high. The A7 chip will allow the new iPhone to outperform most and maybe even all of the competition, has a good operating system with iOS 7 and other neat features. Apple, however, is the company that revolutionized the music player market, began the smartphone era and resurrected the tablet market from the dead. And all they can come up with now is a finger print sensor and a new color.

Tim Cook has two options now. Either he plays nice with the analysts, stops caring about the fashionistas, and does what any doubted corporation would do: further increase profitability. Or he could scare the number crunchers off his property and present us with an iWatch or an iTV – devices that no one has ever seen before and no one can ever live without again. If he continues to do neither, Apple will end up where it started before Steve Jobs returned in 1996 – and will no longer be magic.

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