Apple CEO Writes Memo Explaining Reasons Behind Selling Less iPhones

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Tim Cook in a memo written for Apple employees has said that Apple is not going to use external forces as an excuse for the current situation the company is in

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Cupertino based technology giant Apple is facing tough times in many of its international markets. Not only a Chinese local court banned sales of various iPhone models in one of Apple’s largest market-China, but the brand is also facing similar setbacks in Germany.

It’s legal battles against the chip-maker Qualcomm seem to be taking a serious toll on its sales in various regions. Moreover, there have been reports suggesting that Apple has asked its manufacturers to decrease the production of latest iPhone models. Now, a memo supposedly written by Apple CEO Tim Cook has surfaced and it explains why Apple is selling less iPhones. The memo has been obtained by Bloomberg.

It is to be noted here that Huawei had replaced Apple to become the second largest smartphone brand in Q2 2018. Tarun Pathak, associate director, in one of Counterpoint Research reports for Q2 2018 had said, “Huawei had a good second quarter in 2018 as it shipped more smartphones than Apple to capture the second spot in the global smartphone rankings, after seven years of Apple-Samsung dominance. Huawei achieved this by launching smartphones in the premium segment and capturing the mid-tier segment with its fast-growing Honor sub-brand.”

External forces pushing Apple a bit

Tim Cook in the memo written for Apple employees has said that the brand is not going to use external forces as an excuse for the current situation the company is in. Instead, the company will focus on delivering best products on Earth. It seems as if Tim wants his employees to focus om Apple’s strengths and mission.

The memo read, “External forces may push us around a bit, but we are not going to use them as an excuse. Nor will we just wait around until they get better. This moment gives us an opportunity to learn and to take action, to focus on our strengths and on Apple’s mission — delivering the best products on earth for our customers and providing them with an unmatched level of service. We manage Apple for the long term, and in challenging times we have always come out stronger.”

Apple CEO has also stressed on the fact that iPhone XR, iPhone XS and iPhone XS Max are the best iPhones the company has made so far. He wrote that factors including macroeconomic, some specific to Apple and the industry, barred it from making a new iPhone sales record during Q1.

He wrote, “We are tremendously proud of the innovations we’re delivering to our customers with iPhone XR, iPhone XS and iPhone XS Max. These are, without a doubt, the best iPhones we’ve ever made. We did not set a new record for iPhone sales in Q1, however, due to a number of factors — some macroeconomic, and some specific to Apple and the smartphone industry.”

Apple expects to set all-time revenue records in its key markets

Mentioning US, Canada, Mexico, Western European countries including Germany and Italy, and countries across the Asia-Pacific region like Korea and Vietnam as key markets, Tim Cook expressed that the brand is expecting to set all-time revenue records in these markets.

His exact words were, “We expect to set all-time revenue records in key markets including the US, Canada and Mexico, Western European countries including Germany and Italy, and countries across the Asia-Pacific region like Korea and Vietnam.”

He also mentioned that though the company is falling short on its quarterly revenue goal, Apple’s fiscal first quarter set record in terms of revenue from Mac, wearables and services. Apple’s base of installed devices worldwide, as per the memo, has also hit a all-time high.

The memo mentioned, “While we are disappointed to be falling short of our quarterly revenue goal, our fiscal first quarter was also a record setter for revenue from Services, Wearables and the Mac. iPad revenue grew double-digits over the year-ago quarter, and iPhone activations in the U.S. and Canada set new Christmas Day records.”

It continued, “Our worldwide installed base of active devices also hit a new all-time high, reflecting the loyalty of our customers and their appreciation for the work you do.”

Maurice Klaehne, research analyst with Counterpoint Technology Market Research, in one of his reports based on Apple’s Q3 2018 earnings had said, “A year ago, the worry was Apple was in for a decline in China. There was also hand ringing that Europe was potentially in trouble of slowing. Today the company’s key regions were very close in revenue growth. Americas are seeing 19 per cent growth, Europe 18 per cent, and China 16 per cent. This means the iPhone brand has held up nicely vs. Huawei, Oppo, vivo, Samsung and others while pushing the limits on higher ASPs. However, we are seeing strong growth by these companies in developing markets.”

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