Apple’s “luxury” strategy not working out too well

SUMMARY: In a report to investors obtained by Reuters, US financial services giant Citi Group has delivered a stark warning to Apple that its iPhones in general, and iPhone XS Max in particular, are in trouble.  Not only are sales tanking on the iPhone, but a review of social media indicates that the latest iOS updates are causing issues.  This shouldn’t be a surprise.  The idea that people were willing to pay $700 for a new iPhone was dead before they were launched.

At a meeting with a bunch of Millennials before the holidays I was surprised that so many of them were using the new Dell laptops and loved them.  When I brought up that almost everyone was using Windows I heard how much they loved their new Windows laptops and the fact that they were 40% cheaper than the MacBook Air’s which they previously were using.  However, I also heard something else…to these Millennials “Apple wasn’t a cool brand anymore”.

I guess I should say upfront that I’m an Apple person.  I have a 27″ iMac, MacBook Pro, iPad and iPhone.  However, if I had to purchase a new PC I don’t think it would be an Apple.  They are just too expensive compared to other machines and I’m sick of the constant updates to software that we used to blame on Microsoft which was “the evil empire”.

So what happened?  Here is my list..

1ne: Tim Cook killed innovation in favor of the stock performance.  He stripped down the desktop team and was only good at keeping the company on a course set by Steve Jobs.

2wo: New iPhone models didn’t give people a reason to say “I want one” and pay big bucks for them.

3hree: The new MacBook Air is priced way beyond competitive models and people aren’t willing to pay that premium when Microsoft has closed the gap in performance.  You could make an argument that OS X software hasn’t seen a major update in over 7 years.

4our: The purchase if Beats headphones was a bad idea.  Not only did Apple overpay for the brand their products aren’t rayed that well by audiophiles and there are competing models that sound better.

5ive: There isn’t any reason for consumers to upgrade their iPads or iPhones.

7even: Apple isn’t a “hip brand” anymore.  The company also hid money offshore to avoid paying taxes and used the tax cut to purchase company stock.

8ight: The continued need for “Apple events” to introduce updated products is being met with a huge yawn by consumers.

9ine: OS X is stale, dated and old.  Can you imagine Steve Jobs using the developer conference to talk about emojis?

10en: Samsung and Microsoft are doing a better job of innovating than Apple.

There was a time when I would stay up all night to wait for the release of new software, but I don’t even bother watching the key notes anymore because they are boring and painful to watch.  Look for Tim Cook to retire within a year and also look for some key executive to be replaced because they aren’t as big a star as they think they are.   So sad to see this happen…

Apple’s “luxury” strategy not working out too well

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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