Economy

Because Apple no longer shines

It is the company that is worth most of all in the world: over 3,400 billion dollars, 44 times the capitalization of Intesa Sanpaolothe largest Italian banking group. In the last 12 months the Apple title has risen by 26 percent. And in the ranking drawn up by Fortune of the most admired companies on the planet has been working on the first place for years. Yet on the future of the tech company par excellence, the shadows of the decline are stretched. The fans of the apple speak of them: they regret that magical, exciting period marked by the launch of iconic products, beautiful as design works, capable of changing our digital life forever.

The spectacular presentations of Steve Jobs “The Wow effect” was insured, especially when the founder of the Cupertino house, who disappeared on October 5, 2011, pronounced the fateful phrase “One More Thing”. And with the arrival of a new iPhone or iPad in Apple stores, people camp in front of the windows to grab the latest news.

Today that magic has passed away. The versions of the iPhone in circulation, more or less one to the other, has been lost, and for some time the giant led by Tim Cook no longer seems to invent something revolutionary. The company that with iMac, iTunes, iPod and iPhone has shocked the world of computer science and music, creating a real new economy and putting a mini-computers with touchscreen capable of doing everything in our pockets, it was not able to emerge in the fundamental sector of artificial intelligence. And the last Apple device, the Vision Pro presented in 2023, is a fiasco vehicle: a little practical and expensive object (3,499 dollars), after a first phase of discreet success it disappointed expectations and the company had to reduce its production .

From the death of Jobs, the only really interesting mass products churned out of Cupertino were the Apple Watch and the AirPods. Meanwhile, Meta, together with Essilorluxottica, has given birth to a new market, that of the Smart Glasses, which would have been a typical Apple hunting ground given its ability to create extremely sophisticated portable objects. A missed opportunity. “We are faced with the difference between a radical innovation and an adjustment innovation” comments Umberto Bertelè, chairman of the digital innovation observers of the Polytechnic of Milan. Undoubtedly Cook has not signed many radical innovations such as Jobs, it is Bertelè’s thesis, but the current CEO has had the extraordinary ability to fully exploit the iPhone ecosystem, improving production and bringing home incredible results in terms of profits and turnover. The Californian company still excels in quality and continues to make mountains of profits: it produces perfect and reliable smartphones, constantly improves operating systems, its microchips are exceptional. But he lives on innovations of the past.

A thesis supported by Mark Zuckerberg, a bitter rival of Cook. Speaking with Joe Rogan, conductor of a very popular podcast, the number one of Meta-FaceBook said that Apple “has not invented anything significant for some time” and that in the Tech industry “if you don’t do a good job for 10 years, Sooner or later someone will end up exceeding you ». Zuckerberg said that the company founded by Jobs is still stopped at the iPhone, revolves around the great invention of 18 years ago: «year after year the number of sales (iPhone, ed) is flat or in decline, the reason is that each new generation is not so better than the previous one. So people start more to update (the smartphone, ed) compared to before. And how do they earn more as a company? Essentially squeezes money to people and force developers to this 30 percent tax ».

Zuckerberg refers to the mechanism of commissions that weigh on the App Store: Apple holds 30 percent on all sales sales and in-app purchases for most developers. Since 2021 the company has introduced a program for small developers who reduce the commission to 15 percent for those who earn less than one million dollars a year from all their apps. The mechanism set up by Apple is the subject of antitrust criticisms and investigations in various countries, with accusations of monopolistic practices, especially because the App Store is the only channel for the distribution of apps on Apple devices. The chief of Meta then added some little known information on the “tricks” used by Apple technicians: “They completely hinder the possibility for anyone else to create something that can be connected to the iPhone (like airpods, ed). We would have liked some features for Meta Ray-Ban glasses: in particular, a communication protocol to simplify the connection but every time we speak in interoperability they become super sensitive and raise their defenses by talking about violation of the privacy of people and safety. In reality that protocol is insecure for design and use this justification to allow their products solely to connect in a simple way ».

By examining the budget data of the Cupertino company, Zuckerberg’s theses on the importance of commissions and on the risks of decline for the iPhones seem well founded: even if in the last quarter of the tax year 2024 Apple has scored record results, in the ‘ The whole exercise The turnover rises only by 2 percent compared to the previous year, at 391 billion dollars, and is slightly decreasing compared to 394 billion in 2022.

Of those 391 billion, the Great, 201 billion, comes from the sales of iPhone, stable compared to 2023 and slightly decreasing compared to 2022. The second item in importance is that of services, in decisive increase from 78 billion in 2022 to 96 billion of 2024 The problem is that Apple’s throne in the kingdom of smartphones begins to shake.

In 2024 the global iphone sales decreased by 2 percent on an annual basis in a period in which the overall market grew by 4 percent. According to Counterpoint Research data, the market share of phones with apple fell to 18 percent, less 19 percent of the previous year. While Chinese producers have recorded significant growth, with Xiaomi who marked an impressive increase in sales of 12 percent.

And Thursday 16 January the Canalys Research Company revealed that last year Apple lost the scepter of the major smartphone seller in China: the iPhone deliveries slipped by 17 percent and the company ended up in third place exceeded alive and Huawei. Among the reasons for the decline there would be the absence of artificial intelligence functionality in the last iPhones sold in the great Asian country, where Chatgpt is not available. “This marks one of Apple’s worst annual performances in China,” he said to Reuters Canalys Toby Zhu analyst. “Apple’s premium market position faces multiple challenges: the continuous versions of Huawei, the proliferation of national folding phones in high price segments and Android brands such as Xiaomi and Vivo that build the loyalty of consumers through technological innovations”.

Talking about an Apple at sunset is excessive, and even if the precedent of Nokia is disturbing here we have a giant who has built a very strong image over time. “It is not the first time that we are talking about a decline of Apple” adds Bertelè “but the company has come to date with that stock exchange value. Of course, the future is critical. Imagining another was like the one inaugurated by Jobs is difficult. The next “product” will probably be artificial intelligence that will change our life ». And just on the AI ​​Apple is late. Almost 30 years have passed since the Apple coined the slogan “Think Different” in 1997 and had the strength to reinvent itself. Perhaps it is time for the company to return to think differently. n

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