Apple September 2105 event Tim Cook opening 003

Apple’s reliance on the iPhone is well documented, but that didn’t stop analysts at Oppenheimer from issuing an unusually scathing investor memo describing “strategic issues” at the Cupertino firm.

In the note, a copy of which was obtained by Business Insider, analyst Andrew Uerkwitz and his team charge Apple for being too reliant on the iPhone and headed in the wrong direction, saying the company “lacks the courage to lead the next generation of innovation”.

From Oppenheimer’s note:

We believe Apple lacks the courage to lead the next generation of innovation (AI, cloud-based services, messaging); instead will become more reliant than ever on the iPhone. We believe Apple is about to embark on a decade-long malaise. The risks to the company have never been greater.

Oppenheimer’s take is that iPhone sales will peak in 2018.

Oppenheimer analysts are also concerned about Apple’s inability to raise prices of iPhones, iPads and Macs. One of the problems at Apple, the note reads, is a clash that’s developing between its “primary role as the hardware platform with its secondary role as the software and service provider”.

I don’t think anyone would disagree that Apple is now an iPhone company.

In the September quarter, it raked in a cool $28.16 billion in iPhone revenue, but “only” generated $5.74 billion from Macs, $4.26 billion from iPads, $6.33 billion from various services and $2.37 billion from sales of the Apple Watch, Apple TV, Beats products, iPods and accessories.

Apple sales Q3 2016 image 001
Apple’s September 2016 quarter by product category.

That being said, Oppenheimer also noted:

We believe Apple’s strong profitability, a cash hoard for protection and one last growth hurrah from the tenth-anniversary iPhone will keep investors interested in the company.

Despite all the negativity, Oppenheimer’s “Perform” rating of Apple remains unchanged.

Go figure.

Source: Business Insider

  • lysingur

    The rating remains unchanged because he’s talking about long-term? What’s so hard to understand?

    • TechnoBuff

      I completely agree with you….

  • TechnoBuff

    I think the analyst report is pretty clear…..
    Apple will continue to make money as usual but will not be seen as the leading company for innovation…which is key in how customers perceive Apple in the long term which is key to profitability.

  • lemieuxfan67

    The decimal place for iPad revenue is in the wrong place in your article text.

  • Jerry

    Wtf do these people want? Flying cars? Technology has peaked the progression from this point on is going to be very slow. Apple doesn’t do things until is mature and ready. Unlike Samsung who rush stuff out and resulted in exploding phones. That “fast charge” they have is terrible

    • QaakAufim

      Naw, you’ve got it wrong. That’s a Samsung feature: optional S’mores creation when you need a campfire.

      • Jerry


      • redsymphony


      • Chris Owen

        Damn that’s a good one lol

    • JeanMeanMacHine

      “Technology has peaked”, seriously? Sounds like another visionary statement to me. Who could possibly need more then 640Kb of RAM?

  • Inseltraeumer

    I guess Apple is doomed

  • David Murphy

    Apple is going the way of Microsoft, innovation is passing to others and Apple is looking more like a utility company with vast revenues and profits but growth is stalling. The mac line is not being taken seriously and the latest upgrades leave it several years behind the market.