As far as tech companies go, there is no doubt that one of the top players is the Cupertino-based company, Apple. With its critically acclaimed iOS devices and Mac computers, the Cupertino giant surely has taken the world by storm. Apple has some of the most dedicated consumer fanbase and the company's branding is a force to be reckoned with within the industry. However, if you are keeping yourself in the loop with regards to news about the company, you will know that Apple is currently facing some serious challenges. From the death of former CEO Steve Jobs to its never-ending patent wars against companies like Samsung, the company is definitely having some difficulties. Will 2013 be rough for Apple? Here are 11 Reasons Why Apple is Worried.
11 Reasons Why Apple is Worried
Broken Product Update Cycle
Last October, there have been some buzzes that the iPad line will be updated by Apple. Many thought that it will be an iPad 3rd gen with a few minor tweaks. As it turned out, the device which is yet to be released back then was actually the 4th generation iPad. The iPad 4 is twice as fast as the iPad 3, thanks to its Dual-core A6X chip with quad-core graphics and it is also integrated with the new Lightning Dock connector.
Obviously, this didn't sit well with most people, especially with folks that bought the 3rd-gen iPad back in March. Nobody was expecting the seven month update cycle for the iPad, so many consumers were disappointed. According to a survey, 50% of iPad 3 owners were dismayed that the fourth-gen iPad has been released so soon, followed by 45% iPad 2 owners, and about 40% first-generation iPad owners. With the iPhone 5S rumors brewing so soon, will Apple say goodbye to its yearly update cycle?
Supply Chain Production Issues
The demand for a new Apple product is always high, that is a fact. However, product demand can be so ridiculously high that Apple's supply chain partners can't manage to keep up. This is especially true with the release of the iPhone 5. Foxconn’s chairman Terry Gou said, “It’s not easy to make the iPhones. We are falling short of meeting the huge demand. We just can’t really fulfill Apple’s requests.” Apparently, the design of the latest iPhone requires a more complicated production process, and thus it is a lot slower.
Many were left wanting when the iPhone 5 was released just because they can't get their hands on one. During the release of the iPhone 5, Apple's stock was down by about 2%. Fortunately, it seems that the Cupertino company has managed to stabilize its production yield just in time for the holidays.
iOS 6 Problems
For a major software update of Apple's mobile operating system, the launch of iOS 6 was simply rough. Right off the bat, there were a lot of issues the consumers have experienced after updating. Perhaps the most notorious of them all is the "flawed" iOS 6 Maps. The Cupertino giant promised a worthy replacement for Google Maps but has put out one of the biggest tech fails of the year. Missing landmarks and locations, route suggestions that don't make sense, frequently misplaced business establishments, botched 3D view, are just some of the issues reported by users.
There are other complaints as well like the Wifi / Bluetooth bug, vanishing music libraries, bug that affects the music app, and many others. Apple can certainly iron out these kinks by rolling out numerous firmware updates but the damage has already been done, customer satisfaction has declined and these problems have certainly hurt Apple.
iPhone App Downloads Have Declined
For the first time in Apple's history, the company is recording a drop in key segments, including the number of downloads from the App Store. App downloads are always going through a seasonal fluctuation but the decline isn't that significant because app download percentage usually reads between 30% to 37%. For the first time ever, iPhone app downloads have dipped below 30%.
So what are the possible reasons? Well, the first reason is if anyone can remember, Apple has been hunting down download bots earlier this year which are used by developers to manipulate their chart positions. The second reason is the growing popularity of the iPad. Simply put, customers have been using their iPad more to download apps rather than their iPhone.
The Samsung Galaxy S4
There is no doubt that the strongest competition to the Apple's iPhone right now is Samsung's flagship handset, the Samsung Galaxy S line. There were some talks that Samsung will be releasing the follow-up to its highly successful Samsung Galaxy S III early next year. The Samsung Galaxy S4 is rumored to have a 5-inch touchscreen which will feature 441ppi and capable of 1920 x 1080 Full HD display. There are buzzes as well that it will include a 13-megapixel camera.
There is nothing concrete yet as of now and these are all merely rumors. However, the Samsung Galaxy S4 is sure to represent a tough competition for the iPhone 5. Samsung will make sure that the specs of the S4 is up to par or better. It will be interesting to see what Samsung can come up with for their next flagship device.
Google Voice As Competition to Siri
When Siri was introduced, it was marketed as a game changing feature and as an incentive for folks to update to the iPhone 4S. Back when Siri was announced, she was helpful, smart and even downright funny in a sort of sarcastic way. However, a new challenger has come to town in the form of Google Voice Search.
There are numerous comparison tests that were conducted online and the results are fairly varied. There are those that state that Google Voice Search is smarter than Siri, while there are those that say the performance of both solutions are on-par but Siri does it with more panache. Regardless of what reviews actually say, there is no doubt that Siri is having some real competition now with Google Voice.
Apple's Rank In China's Smartphone Market
While Apple is indeed dominating the U.S. market share, the same simply can't be said when it comes to another major mobile market which is in China. Over the years, Apple has managed to be in the top five list in China's smartphone market. But according to Q3 results, the Cupertino giant has dropped out of the top five and has been bettered by the competing companies like PC maker Lenovo and South Korean company Samsung. Apple holds about 8% of the market share in China which drops the company to sixth place. There is also a recent report that Android dominates China with 90% share in the mobile market.
So why should Apple care about the market share in China? Chinese consumers are known to be voracious when it comes to new technologies. The volume and growth rate of the Chinese mobile market is growing rapidly and is expected to overtake U.S. smartphone demands by 2012. There have been some reports that Apple may release a cheaper iPhone in 2014 to address this issue.
Declining Apple Stocks
Probably one of the most important aspects that Apple should be worried about. As November entered, the Cupertino company was off to quite a rocky start. This is because Apple stocks have discovered gravity and is now down by 20% since setting an all-time high numbers in mid-September. So what are the likely reasons why shareholders are losing their confidence? One of the most likely reasons is the slipping market share of the iPad. The second factor brings us to the next reason why Apple is worried.
If you have been keeping up with the news regarding Apple, you should be well-aware that there has been major management changes within the company. Among the biggest changes is definitely the departure of iOS Chief, Scott Forstall and retail Chief, John Browett. Forstall will be leaving the company next year and the one who will take over his role is Jony Ive, in addition to being the head of Industrial Design. In a recent report, the head of the Apple Mapping team was reportedly dismissed as well for hurting the launch of the iPhone 5.
Will Apple be able to keep up with these management changes and get their groove back? With Jony Ive on the helm of the iOS design, will we finally see an iOS interface that doesn't induce a strong sense of déjà vu?
It's no secret that Apple is in a never-ending legal battle with just about anyone. Apple has been in quite a suing frenzy as of late. However, there are those who have been suing Apple as well and have been winning. The latest hit would be when the federal jury in Texas ruled that Apple's FaceTime video chat software has infringed numerous patents secured by VirnetX, a patent holding firm. The court ordered the Cupertino giant to pay $368 million and VirnetX can push for a motion to ban the sales of Apple products that violate the said patents.
No New Gadgets Released Since 2010
Don't you think that it has been a long time since Apple released something that isn't a refresh or an update of its existing products? Don't you want Apple to release a product that is truly unique and innovative? The last time that Apple has released something truly revolutionary and unique was with the original iPad back in 2010. Apple really needs to release a new product to keep things exciting, like maybe the rumored iTV?
Bonus: BlackBerry 10
These days, Research in Motion hardly counts as competition for Apple or any other major player in the smartphone market. However, BlackBerry 10 does show some promise and could be a wildcard player in the 2013 smartphone race. For sure, BlackBerry 10 could make or break RIM.
With these reasons, Apple has every right to be worried. Will Apple have a hard time in 2013? That remains to be seen. The consumer market is rapidly changing and the competing firms are also stepping up their game. For sure, Apple will have some tough challenges down the road.Contact Us for News Tips, Corrections and Feedback