NOT A SWEET ’16
Cut in iPhone production the latest blow to Apple
For Tim Cook, 2016 is a year that can’t end soon enough.
Apple’s chief executive has been battling lackluster results at the Cupertino, Calif.-based tech giant, with critics blaming ho-hum sales on an increasingly stale lineup of gadgets — including the iPhone.
The most recent evidence came Friday, with a report from Nikkei, the Japanese news agency, that Apple will slash production of the iPhone 7 by about 10 percent because it “has sold more sluggishly than expected.”
The downbeat news echoed this spring, when Cook was forced to announce a dismal milestone: Quarterly sales of the iPhone — by many measures the most successful consumer product in history — dropped for the first time ever.
“This, too, shall pass,” Cook insisted on a call with Wall Street analysts in April. “The future of Apple is very bright.”
Some investors aren’t so sure. Cook had pleaded that the iPhone 6S — whose sales dropped 15 percent and 16 percent in the spring and summer quarters, respectively — was more or less a placeholder product ahead of the iPhone 7.
But when the iPhone 7 got unveiled in September, the biggest difference reviewers found between it and the 6 models was that it lacked a headphone jack — a switch that many actually found annoying.
The news was the latest disappointment for Apple shareholders, who have weathered a bumpy ride this year. The stock rose 10.8 percent this year, but that’s short of the Dow Jones industrial average, which added more than 15 percent.
It’s not just stale product updates that are now plaguing Apple. Lately, execution under Cook looks slipshod.
The iPhone 7’s painful pivot for customers came as Apple announced the AirPods, a wireless set of headphones to accompany the jackless iPhone 7. But the $179 AirPods soon got delayed past a promised October shipment date and weren’t available to many customers until after Christmas.
The snafu was a particular embarrassment for Cook, who was tapped as Steve Jobs’ successor in 2012 partly for his prowess in running a tight supply chain for products.
Touring the New York Stock Exchange earlier this week, Cook claimed the AirPods were “a runaway success” — a typically vague pronouncement with no numbers in it.
Separately, this fall Apple received a mixed reception to a long-awaited upgrade to the MacBook Pro. The biggest redesign of Apple’s flagship laptop in eight years added a sleek “touch bar” to replace the row of function keys above the keyboard.
Reviewers mainly noticed, however, that the new MacBook Pro’s battery life fell short of the previous model’s.
Looking ahead to 2017, many are pinning hopes on the next iPhone. A rumored “iPhone 8” is expected to get a significant overhaul, possibly with a bigger screen and a body that's made entirely of glass.
Still, many investors remain troubled about the company’s direction, as new projects including an Apple car have reportedly run into problems.
“There’s no question Apple’s best days are behind it,” Bernstein analyst Toni Sacconaghi said earlier this year.