Tim Cook couldn’t hold back. «Obviously this is a disaster,» he told finance executives in an email in 2018, ordering his aides to improve disappointing sales of Apple's latest iPhones.
Apple's business in China was falling, leading to the company's first warning about arrived. at 16 years old. According to emails recently released as part of a lawsuit against Apple, one executive described productivity as an «extreme issue» and another said employees needed to respond as if it were a «five-alarm fire.»
< p>The company later reported two straight quarters of revenue declines, a rare setback for a company known for reliably collecting more money from its customers each year.
At the time, the blame for poor sales was placed on themselves. the legs of Huawei, the Chinese phone giant that is seen as a domestic rival to the iPhone maker.
«I think upgrade advocates believe that choosing [such as Huawei] is a better choice, especially if they don't see the underlying reasons and new innovations in the iPhone,» wrote Apple's China marketing executive.
In Ultimately, Huawei did not destroy Apple's business in China. US sanctions have effectively crippled Huawei's ability to produce high-quality phones, while giving the iPhone maker an advantage.
Despite the deterioration of relations between Beijing and Washington, Apple continued to record record sales in the Middle Kingdom.
But Cook may have simply delayed reckoning. Wall Street recently raised new alarms about Apple's business in China, causing the company's shares to fall.
This is just one of many serious problems facing the world's largest company.
In November, the company reported that revenue had fallen year-over-year for four straight quarters, marking a the longest decline in more than two decades. . Some analysts believe Apple could see a decline in the fifth quarter when it reports Christmas sales in the coming weeks.
It would be the longest losing streak since 1998, the year after Steve Jobs returned to save the company from near bankruptcy.
No one is suggesting that Apple or Cook have a similar problem. The company became the first company to reach a valuation of $3 trillion (£2.4 trillion) last year, and its shares hit a new all-time high just last month.
The company has reached more than two-thirds of that maximum. The end segment of the smartphone market — the only part that is consistently profitable — generated $97 billion in profits in the last fiscal year: about $11 million an hour.
Cook also defied repeated predictions of a «peak Apple» by continuing to fill the company's coffers even as each annual iPhone release becomes increasingly difficult to distinguish from last year's.
But investors are increasingly nervous. Since its peak in December, Apple's share price has fallen 8.5%, a decline of $260 billion in market value terms.
The company now faces a number of challenges that, collectively, represent perhaps , the most complex in the world. Cook's tenure
Jefferies analysts said Monday that iPhone sales in China are likely to fall by double digits this year. Supply chain sources suggest supplies are currently falling by 30%, investment bank analysts say.
This is a concern since the iPhone still accounts for the majority of Apple's revenue. However, smartphone sales in China are not Cook's only headache.
Ahead of Christmas, the company was forced to suspend most sales of its Apple Watch in the United States after the medical device company won a lawsuit accusing it of patent infringement.
Apple has frozen the order as it appeals the decision, but the delay may only last until this Friday when US customs authorities will decide whether the proposed update will address the complaint.
The Apple Watch, which remains the most significant device released during Cook's more than 12-year tenure, has become a significant source of revenue, if not the revolutionary product that the iPhone was.
There are other potential legal problems. Last week, The New York Times reported that the US Department of Justice is on the verge of filing a major antitrust case against Apple, which will likely target the tactics the company uses to protect the iPhone's market position.
While the company would likely fight either case, the encounter would be unpleasant, to say the least, and likely very time consuming.
More immediate regulatory action will be felt in Europe. Later this year, new competition laws mean iPhone users will be able to bypass Apple's lucrative App Store when installing apps.
As problems grow, Apple is instead trying to focus on a new product it hopes will revive its business.
Apple announced Monday that its Vision Pro augmented reality headset, which looks like ski goggles, will arrive on sale February 2. Cook talked about his credentials, calling her a “new product.” type of computer.»
Apple CEO Tim Cook with Vision Pro virtual reality headset Photo: Josh Edelson/AFP
Still, the launch will be a major test of Apple's sales power and innovation potential. At $3,499, both production and sales of the devices will likely be limited. Other companies have also failed to achieve success with high-tech headsets.
Meanwhile, as Apple introduces its technology to the metaverse, the world turns its attention to a shinier innovation: artificial intelligence. Apple has said less on this topic. The company rarely praises artificial intelligence per se, preferring to talk about how machine learning improves existing technologies such as auto-correction or the iPhone camera.
This has led to the perception that the company is losing ground, but this idea has not been helped by constant user dissatisfaction with the artificial assistant Siri on iPhone.
Apple is reportedly planning to update Siri later this year with a new system closer to ChatGPT, and is in talks with news publishers to license their content for the launch. However, the company faces questions about whether its privacy mandate will prevent the company from collecting vast amounts of data that is typically used to train artificial intelligence systems.
Apple has had long sales slumps in the past, but It's always been like that. was saved by new breakthrough products: the iMac in 1998 and the iPod in 2001.
As the clouds gather again, Apple's new ideas have more to come to fruition.
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