I previously covered the secrets of the top 1% of business minds. Today, I reveal how Apple is using this level of thinking to make their entire business stronger.
In a perfect demonstration of the macro/micro concept in practice, the Wall Street Journal broke the news that Apple is shifting its leadership. The company is also changing priorities throughout its multiple divisions (retail, hardware, artificial intelligence and services).
Why? For starters, Apple posted a quarterly decline in revenue and profit for the December quarter. The company hasn’t experienced that in 10 years.
However, looking into the details reveals that revenue from other products and services grew by 19%. This highlights some interesting points.
Lifting iPhone Sales
Apple needs to focus on lifting slowing iPhone sales. But they’ll need a new strategy. People won’t keep upgrading to new, but more expensive models without a perceived benefit and more value.
It’s like paying an even higher price for a bigger plate of the same food. That’s not the sort of value they need. After a certain amount of eating, people get full. But they will happily pay top dollar to eat at a gourmet restaurant (note: where dishes are usually much smaller).
Apple faces the same problem with their phones and their features. They need to switch their thinking in order to lift sales. Unfortunately, new leaks suggest that Apple has nothing new to offer with upcoming releases of the iPhone.
Diversification
Competition from China, where plenty of manufacturers make lower priced phones with a full set of features, is also impacting Apple.
Added to this fact is that more than 60% of Apple’s revenue comes from the iPhone. The company knew that eventually, sales would slow down (remember the iPod?). Therefore, when phone sales drop, Apple's whole business is at risk of being hit hard, since the entire company relies on iPhone sales.
On the other hand, a company like Samsung can make a profit, even though there were exploding Note 7 reports. That’s because they make memory chips, LCD panels and lots of other products.
Apple Is Trying To Diversify
Apple is trying to move from an iPhone-driven company to a company where growth is led by services and maybe even new technology.
Recent changes include:
- Artificial intelligence chief John Giannandrea was promoted to the executive team
- Retail chief Angela Ahrendts left and was replaced with head of human resources, Deirdre O’Brien
- Top voice-assistant executive for Siri, Bill Stasior, was pushed out
- 200 staffers from its autonomous-vehicle project were cut
- Eddy Cue is leading engineering resources in its services business into work on Hollywood programming
If Apple is trying to get into the media streaming arena, life could get complicated. Netflix, Spotify and Amazon are already way ahead with paying subscribers.
In other areas, Google and Tesla are already far ahead with autonomous vehicles logging a growing number of miles on the road and Google Home and Amazon Echo are already assisting with controlling millions of homes.
If Apple wants to catch up, the company will need to keep a tight focus and use the rule of bridges to succeed.
Note: I have reached out to Apple for comment but have yet to receive a response.
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