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Under pressure:

Apple CEO

Tim Cook

miscalculated

Photo:

Andrew Caballero-Reynolds/AFP

What's happened:

Apple has lost around 7 percent of its stock market value since the beginning of the year - while the other tech stocks are performing significantly better (see chart).

And what really happened:

It is becoming increasingly clear that Apple CEO

Tim Cook

(63) planned incorrectly strategically.

Apple lacks the next big platform for growth.

Apple's revenue fell slightly in 2023.

Sales of iPhones, the most important product with around 52 percent of total sales, fell by 24 percent in China at the beginning of 2024, according to the analysis firm Counterpoint Research.

Apple's market share in China is plummeting.

There is a fundamental problem behind this drop in sales: the changes between device generations are now so small that it practically doesn't matter whether you have an iPhone 13 or 15.

Users sometimes don't even know which model they have.

In times of crisis, many people forego the upgrade.

If you have to hold on to money, you can use your old iPhone a little longer.

With the VR headset Apple Vision Pro, Tim Cook has a potential growth driver.

However, due to the low sales volumes, this will play no role in either hardware or software sales in the foreseeable future.

Why service revenue doesn't offer Apple a way out:

Apple will also not be able to compensate for the problem with hardware sales with a sharp increase in its service revenue, which currently accounts for around 20 percent of Apple's revenue.

On the contrary: the dispute that Apple is currently having with the European Union (EU) over the Digital Markets Act suggests that it will be difficult to squeeze even more out of the App Store.

The biggest danger for Apple is that it will lose a hyper-lucrative deal with Google.

Google pays Apple around $18 billion a year to be pre-installed as the default search engine on iPhones, iPads and Macs.

Due to the EU's Digital Markets Act, Apple now has to let users in the EU choose their search engine.

It is questionable whether Google will continue to pay so much if users choose Google search voluntarily anyway.

How it goes on:

It is obvious that Tim Cook also sees Apple under pressure.

Uncharacteristically for Apple, Cook announced to investors at the last earnings call that Apple would be bringing new AI features - before Apple actually presents them at the WWDC developer conference in June 2024.

It is now expected that an AI Siri will be presented at WWDC: a voice assistant based on artificial intelligence.

This could also boost Apple's iPhone sales.

Because it is conceivable that the feature only comes to the new iPhones - or at least is only temporarily available free of charge for new devices, while everyone else would have to pay, for example, 6.99 euros per month.

Why Apple should not be underestimated:

An AI Siri should not be underestimated as an AI assistant.

The willingness of users to share data is probably highest with Apple compared to other tech companies, and for such an assistance program it is a huge advantage that personal data is available in the device.

In addition, interaction with the AI ​​assistants will primarily work via voice.

And with AirPods and the Apple Watch, Apple already has devices that are perfect for the AI ​​age.

When it comes to virtual reality, Apple also has an advantage over practically all other tech companies that should not be underestimated, with Apple Stores all over the world: it is central to the product that it can be experienced live.

Physical Apple Stores are perfect for introductions to technology.

And Apple may have failed to develop its own Apple Car.

But Tim Cook has been stubbornly conquering the car for some time without any hardware of its own - with Apple CarPlay.

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