Are Apple’s Strategies Hiding in Hind Sight?

May, 2018

The Context

They are the disruptors! They are the forerunner of innovation revolution. They own a market capitalisation of USD 914.461 Billion (as on 8th May 2018). Yes, we are talking about the brainchild of Steve Jobs – Apple. On May 1, 2018, the company released its second quarter results which touched $61.1 billion, indicating an increase of 16% from the second quarter of 2017. This is indeed a substantial rise looking at the meagre 4% rise of Q2 2017 results from that of Q2 2016.

Analyst Observation

The company’s CEO, Tim Cook has expressed that it has actually been an impressive March quarter with consistent growth in iPhone, Services and Wearables. However, our analysis indicates that iPhone's contribution in the operating revenue was respectively 65%, 63% and 62% over Q2 2016, Q2 2017 and Q2 2018. This clearly reveals that the sale of iPhone was comparatively lesser in Q2 2018 than in the second quarters of previous years. The sale of 52.2 million iPhones in the 2018 second quarter indicates a rise of meagre 3% compared to last years’ second quarter. But we fail to understand the 32% dent in the number of iPhones sold in Q2 2018 over Q1 2018. Is this fall in sale of iPhone due to the ‘dearest’ iPhone X arriving in stores for sale globally on November 3rd, 2018?

apples global performance

Source: Chart has been prepared on the basis of company’s quarterly reports

Breaking it Down

We understand the iPhone is definitely the major product portfolio that steers Apple’s growth strategy. The dependency is huge. But modifying the product pricing strategies along with the geographical positioning strategies specially in the Asia-Pacific region should not be overlooked. Asia Pacific is one such region whose revenue had dipped by 42% in Q2 2018 over Q1 2017. We are sure you have better plans ahead to surprise us and reach the pinnacle of innovation. The world considers Apple to be the most coveted brand; appearances in Forbe’s ‘The World's Most Valuable Brands’ list is a clear answer to all its mounting tasks.

It is only because it’s a giant, that the expectations are way huge. What matters is the agility and ability to stay on a roll and put the right strategies in the right place at the right time. The audience looks at you every quarter. Battling those expectations and staying glued to the vision at the same time is definitely a task. We expect an even better upcoming quarter for the company!

- Kathakali Basu,
Assistant Manager – Content Marketing and Strategy,
Infoholic Research