Taking a look back at another week of news from Cupertino, this week’s Apple Loop includes the disappointing sales of the iPhone XR, delayed to the iPhone 5G, the latest iPad Pro reviews, why Tim Cook is focused on the iPhone, no more iPhone sales will be revealed, the PR angle to recycled aluminium, and repairing the new MacBook Air.
Apple Loop is here to remind you of a few of the very many discussions that have happened around Apple over the last seven days (and you can read my weekly digest of Android news here on Forbes).
iPhone XR Demand Is Less Than Expected
How is the iPhone XR doing in the market? As the pre-launch ordering window opened up, it took an inordinate amount of time before Apple raised the ‘sold out’ signs. That lower demand appears to be a feature of the XR, with a twenty-five percent reduction in demand being reported as Foxconn reduces the number of assembly lines. Lauly Li and Chen Ting-Fang report:
Apple has signaled disappointing demand for the new iPhone XR, telling its top smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the relatively cost-effective model that hit shelves in late October, sources say.
"For the Foxconn side, it first prepared nearly 60 assembly lines for Apple's XR model, but recently uses only around 45 production lines as its top customer said it does not need to manufacture that many by now," a source familiar with the situation said.
iPhone 5G Delayed
Although 2019 is set to see 5G handsets dominate the flagships, Apple’s plans to bring the super fast connectivity to the iPhone have been dealt a blow. According to reports, Intel’s 5G chip is generating too much heat and it cannot be dissipated fast enough. That means more engineering time, and no iPhone 5G until 2020 at the earliest:
Where does that leave Apple? Tim Cook and his team have been working to make Intel its sole supplier in key areas and the expectation is that this relationship will continue. It would be a courageous move to switch to an alternative 5G chip supplier (such as MediaTek) so Apple’s choice is to either enact a radical change with its supply chain, or to stay the course and hope that the myth of ‘Apple only introduces mature technology’ will continue to be in place through next year’s model and another twelve months after that into late 2020 with the iPhone X4 (or will it be the iPhone XSSS?).
Computer Or Tablet? Reviewing The iPad Pro
Apple’s latest tablet is pitched as a professional machine that will replace your computer. Can it really be a substitute for your laptop? That’s the key to understanding the iPad Pro’s mission, as I discovered earlier this week:
The idea is simple - the iPad Pro can replace your computer. The problem here is that this definition of a computer lies with Apple. If you have a requirement that is outwith Apple’s walled garden then you have a very expensive paperweight that plays slightly too many piano covers of Abba songs. And it doesn’t take much for the iPad Pro to fail. Take the USB-C port. It may work with monitors and keyboards, but ask it to connect to external storage, to hard drives, to cameras, to flash cards, and you’ll be waiting a long time
More details on the reviews here on Forbes.
Why Tim Cook Is Ignoring Your Favorite New Apple Product
Reviews aside, does Tim Cook’s Apple care deeply enough about the iPad, the Mac range, or anything outside the iPhone and the Apple services? Yes, they bring in a significant dollar amount, but are they the future of the company? Adrian Kingsley-Hughes argues that the latter are all that count:
Take a moment to absorb the fact that Apple's services business -- which comprises of digital content and services, AppleCare, Apple Pay, licensing and other services -- is a bigger business than the Mac, and that "other products" -- which covers AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and other Apple-branded and third-party accessories -- is bigger than the iPad.
Now it could be argued that some of the revenue for services and "other products" comes as a result of iPad and Mac, but given the size of the iPhone install base compared to that of the iPad or Mac, it will only be a modest amount.
Apple's priority is keeping the iPhone business afloat. Everything else is secondary.
No More iPhone Numbers
As discussed last week on it’s earning calls, Apple will no longer be releasing iPhone sales numbers. Given that the iOS smartphones have been ‘basically flat since the iPhone 6’, Apple’s growth has been in the increased handset costs. Hiding the iPhone numbers means that this increase in growth is likely at an end, and Apple is trying to move the narrative to ‘services’ rather than hardware sales or revenue. Ben Thompson explains:
Still, even though unit growth had been stagnant for a full three years (not just the last year, as many reports, including the one above, incorrectly stated), reporting those numbers helped Apple tell its story: after all, you needed unit numbers to calculate the average selling price.
What the reports are right about, though, is that unit sales going forward are absolutely a story Apple would prefer to avoid: it is very unlikely that units will grow, and while Apple pushed pricing even higher with the iPhone XS Max, it probably can’t go much further, which means it is likely that the average selling price-based revenue growth story is drawing to an end as well.
The PR Of Recycled Aluminium
At last week’s launch of the new MacBook Air, Tim Cook and his team put a lot of focus on the use of recycled materials in the new macOS powered laptops. It sounds great, but is there a significant benefit to the world, or is it a nice bit of PR on a pretty standard practice for a modern tech manufacturer? Casey Williams picks up the story:
Buying recycled aluminum is simple, cheap, and probably a good business decision for Apple anyway, according to Kyle Wiens, who advocates for responsible device recycling and serves as CEO of iFixit, a site dedicated to repairing gadgets.
“Aluminum is one of those things that is always recycled,” Wiens says. “It’s way cheaper to recycle aluminum than mine new bauxite ore, so there’s a strong market demand for scrap. Really, this is the lowest hanging fruit on their 100 percent recycled material pledge.”
And Finally…
The new MacBook Air is easier to repair! At least if you are Apple. The teardown team at iFixit has found that the laptop has many new tabs to help remove parts, but getting to those parts will be very difficult unless you have Apple’s own tools and guides.
But don't go thinking Apple has gone soft on us. These design improvements have more to do with rework than repairability. The Air still uses external pentalobes to keep you out, requires lots of component removal for common fixes, and both RAM and storage are soldered to the logic board. All together, that means Apple has an easy time with their knowledge and tools, but the average DIYer is left out to dry when it comes to upgrades. We’re not ones to complain (okay, yes we are), but we hope this is just the beginning of an upswing in repairable design.
More at iFixit (and my thoughts on the implications here).
Apple Loop brings you seven days worth of highlights every weekend here on Forbes. Don’t forget to follow me so you don’t miss any coverage in the future. Last week’s Apple Loop can be read here, or this week’s edition of Loop’s sister column, Android Circuit, is also available on Forbes.
