Despite Record-Breaking Quarter Apple is Doomed Once Again


apple is doomed
Photo Credit: Mike Deerkoski

Last week Apple revealed its financial numbers for the holiday quarter, blowing away all estimates and sending a shockwave across Wall Street. In a conference call to investors on Tuesday the company revealed that it had racked up $74.6 billion in sales on its way to pocketing $18 billion in profit, making it the single most profitable quarter by any company in history. On top of that, more than 74.5 million iPhones were shipped in that quarter alone, crushing previous records for sales of the smartphone, which now accounts for more business than both Microsoft and Google combined. But despite these incredibly impressive numbers, the nay-sayers were back in full-force, telling anyone who will listen exactly why Apple is doomed once again.

It seems that there is an ongoing narrative amongst tech financial analysts that no matter how successful Apple is, the company is always on the brink of disaster. Even in the wake of its record-breaking quarter there are pundits who say that that the company is in big trouble. One even went so far as to list six reasons why Apple is doomed, going to great lengths to point out what he perceives to be chinks in the company’s armor.

The article, which is written by Forbes contributor Peter Cohan, is filled with strange logic. For instance, he says that Apple’s stock is too expensive – even though it is more affordable now than prior to the 7-1 stock split back in June. He also says that Apple is likely to fall victim to the trend of falling prices for smartphones that is sweeping across the industry, but ignores the fact that the average selling price of an iPhone has actually gone up in recent quarters. Cohan even takes a poke at Apple for its shrinking profit margins, which have certainly been a cause for concern in previous financial reports. But he once again ignores the fact that margins have actually improved with the arrival of the iPhone 6 this past fall.

apple is doomed

Cohan, along with other Apple doomsayers, have also indicated that they feel the Apple Watch will be a failure right out of the gate. Critics of the watch, which isn’t set to launch until April, say that the smartwatch isn’t a product that the public is clamoring for, and even Apple won’t be able to sell it to anyone other than their die-hard fan base. But negative reaction to an Apple product pre-release is not uncommon, as the iPod, iPhone, and iPad all had their share of detractors prior to launch as well. Each of those products went on to sell millions of units, and make Apple billions of dollars, and the Apple Watch could become the next device to do that very same thing. If anyone can make wearable technology a success, it is probably Apple, and it appears to have higher aspirations for the Watch than most other companies currently making wearables.

That isn’t to say that some of Cohan’s points aren’t valid. He does point out that declining iPad sales should be an area of concern, and that Apple’s over-reliance on the iPhone to generate revenue is troublesome. It is true that tablet sales across the entire industry are in decline, and Apple has not found a way to counter that trend other than with increased sales of their other mobile devices. While there is still plenty of growth to be had in the smartphone market, diversification into other revenue streams would seem like a prudent strategy on the part of Apple.

apple is doomed

Fortunately Tim Cook seems to agree. In the financial call he indicated that Apple will push into two new product categories in the next few months, which seems to hint that the company has more up its sleeve other than just the Apple Watch. What those two new categories are remains to be seen, but if the Watch sells as well as some analysts believe, and Apple Pay continues to grow nicely, the company will have additional revenue streams to help bolster its bottom line.

As with any publicly traded company, there are always concerns about how Apple will continue to grow, particularly considering its impressive run over the past five years or so. But seldom has there been a company that has been so successful, and yet has continually had its doom predicted so vehemently as well. Considering the fact that all businesses have their ups and downs, and that no one can stay on top forever, it seems inevitable that Apple will eventually be knocked off of the top of the tech pedestal. That said however, it seems unlikely that the company will have to face its “doom” anytime soon.

But I guess that story isn’t as tantalizing to the press, so they’ll just keep on predicting it no matter what the real-world results show. Meanwhile, Apple will continue creating innovative products that see well, while marching towards becoming the world’s first $1 trillion company. Doomed indeed.

Also Read:

6 Reasons 2015 Could Be Apple’s Best Year Yet

Why Apple Watch isn’t Competing with Android Wear at All

 


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Kraig Becker

Kraig Becker is a freelance writer based out of Nashville, TN. His two passions are technology and travel, which are also the two things he most likes to write about. An avid Apple fan, he bought his first Mac back in 1990, and has and has been using the company's computers, and other devices, ever since.

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