Apple Inc. (AAPL)’s Margins Are Its Undoing

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When did Apple Inc. (NASDAQ:AAPL) become so out of touch? When did it realize that it’s bequeathing the mainstream market to Google‘s Android? Has it even realized that yet?

Apple Inc. (NASDAQ:AAPL)

Yesterday’s iPhone event was supposed to be Apple Inc. (NASDAQ:AAPL)’s moment to shine. It was one of CEO Tim Cook’s perhaps final chances to prove that the consumer tech giant can recapture the glory it had when Steve Jobs was around.

Instead, we got more of the same.

  • The iPhone 5s has some new features, but it has the same form factor as last year’s iPhone 5. That wouldn’t be a bad thing if Apple Inc. (NASDAQ:AAPL) hadn’t surrendered market share, going from 17% of the global market to just 13% over the past year.
  • The iPhone 5c was supposed to be the entry-level device that would finally open doors for the company with the prepaid wireless carriers here, and the countless carriers abroad, which don’t offer hundreds in subsidies in exchange for long-term contracts. No. It’s unlocked price of $549 without a contract isn’t going to make a difference in a world where entry-level Android smartphones are available for a sliver of that.
  • After seeing Samsung — the company that overtook Apple Inc. (NASDAQ:AAPL) in smartphone sales — introduce a smartwatch last week, there was always the hope that the Cupertino taste maker would finally make a big splash in wearable computing. No. It didn’t happen.

There are plenty of snazzy features in the iPhone 5s. The camera is dramatically improved, and that’s a big thing for many buyers trying to consolidate gadgetry. However, boasting about the more powerful 64-bit processor seems as if it’s missing the mark. I’ve heard people complain about slow PCs, but never slow smartphones. It’s a nice feature, but it’s not a very marketable one if it’s not aiming at an addressable problem.

Then we get to the fingerprint identification. BlackBerry Ltd (NASDAQ:BBRY) had to be biting its cracked nails when Apple announced its features to make the iPhone 5s more secure, but when you’re gunning for BlackBerry Ltd (NASDAQ:BBRY)’s fading market, you’re essentially fighting for scraps. Yes, Apple Inc. (NASDAQ:AAPL) did make its devices more compelling for the enterprise market yesterday, but that’s right now. Just wait until the 5s is out in the wild, and folks begin having problems accessing their phones if the ID technology proves to be less than perfect, or the sensors wear out in time. Today’s selling point can be tomorrow’s selling point — if you know what I mean.

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