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Big Revolution - Trouble in Apple land [Members only]

Welcome to the first Big Revolution of the year, and it's just for you lovely members. Full, normal s
January 3 · Issue #307 · View online
Big Revolution
Welcome to the first Big Revolution of the year, and it’s just for you lovely members. Full, normal service resumes next week.

Big things you need to know today
  • Apple has confirmed that iPhone sales are worse than it expected. The company has issued a warning about its next quarterly financial results, blaming sluggish performance in China as the main factor. More on this below.
The big thought
Credit: Ron McClenny on Unsplash
Trouble in Apple land
So, Apple has confirmed what many already suspected, warning that sales of the latest iPhones have been slower than expected. However, it’s worth putting a few things in perspective:
  • This isn’t all about iPhones being too expensive (although that may well be a factor). In his letter, Tim Cook discusses issues like a slowing economy in China, perhaps exacerbated by Trump’s trade war.
  • This isn’t really about you and your friends not upgrading this year because you’re happy with your current iPhone or the new ones don’t have enough new features (it’s amazing how many tech journalists on Twitter projected their own experiences onto this announcement as soon as it dropped). Again, Cook stresses that China was the main issue here.
  • Apple isn’t doomed: it’s still extremely profitable and its iPhone business is doing incredibly well. Yes, it’s having a bad quarter, but Apple is still very healthy indeed.
But on the other hand…
  • Concerns in Western markets aren’t totally unfounded. New iPhones are undoubtedly priced artificially high to compensate for declining demand, and consumers see through that. Meanwhile, existing iPhones last for longer than ever, with iOS 12 giving a new lease of life to older devices. It may not be directly related to this latest news, but it’s an issue to keep an eye on.
  • It’s a sign that we’ve passed peak iPhone. When growth is hard to come by even in China, it means Apple really needs to accelerate its path to another big new source of revenue growth.
  • If Apple is struggling in China, others will too. The news has done little to reassure the markets that technology stocks are a safe bet, and it’s the latest sign we may see recessions in key economies this year.
One big read
The Men Peddling the 'Secrets' to Getting Rich on Amazon The Men Peddling the 'Secrets' to Getting Rich on Amazon
“A growing number of self-proclaimed experts promise they can teach anyone how to make a passive income selling cheap Chinese goods in the internet’s largest store. Not everyone’s getting rich quick.”
One big tweet
Peter Rojas
20th century problems: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

21st century problems: “Half the internet is fake; the trouble is I don’t know which half.”
10:42 PM - 2 Jan 2019
That’s all for today...
The next editions will be members-only weekend editions this coming Saturday and Sunday, and then we’re back to regular service from Monday.
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