October 20, 2014
By Marc Fogarty, CPA, CFE
As I have mentioned in other blogs, tech companies often need to think of ways to reinvent themselves to keep investors interested. The recent unveiling of the new Apple IOS, iPhone 6 and Watch in the second week of September is no exception.
Despite Apple’s slight stock decline the week before the announcement, it made its way back up shortly thereafter. Fans lined up at Apple stores, much like a new movie, eagerly waiting to experience the new Apple offerings. Investors will keep an eye on preliminary sales but initial indicators are very good. In the opening weekend for sales of the iPhone 6, Apple sold 10 million units, which was record breaking.
Both of the new iPhone models have larger screens, which consumers seem happy about, and Apple has introduced a new electronic payment system called Apple Pay. The Apple Watch, which is the first new product Apple has launched since the iPad in 2010, will integrate with the iPhone and enable health and fitness monitoring as well as response to messages, plus access to Siri, calendar, music and other apps like maps for directions. The hope for the new Apple Watch is that it will have the ease-of-use that Apple products have become known for and competitor products are lacking.
Despite all the good news, there are a few flies in the ointment. The estimated delivery time for new phone orders is a month plus and the iPhone 6 will not be available yet in the Chinese market. The Apple Watch is not due out until early 2015 and it requires the owner to have an iPhone. Despite the issues regarding supply, there is still a strong demand and this should keep investors happy, at least in the short term.
There were also a few glitches with the new iOS and ‘Bendgate,’ but glitches happen all the time in a mass roll out -- especially one of this magnitude. The update to new iOS software is a large scale update that happens to virtually everyone at the same time. There is rarely such an event that is similar. When Microsoft updates to a new operating system or new web browser, those are seldom rolled out to everyone at the same time.
Also, if there was any doubt about Tim Cook’s effectiveness as Apple’s Chief Executive Officer, following in Mr. Job’s footsteps, the latest plethora of product announcements and seamless integration may appeal to investors. By improving existing products, creating new ones of interest, and tying them all together, Apple still seems to be just one step ahead of competitors.