The biggest selling point that Apple Inc. (NASDAQ:AAPL) has and which continues to see it churning profits is its ecosystem. In the second quarter that ended on June 30 the Cupertino, California-based tech giant earned $8.72 billion largely on the basis of this. The iPhone maker is also helped by the fact that it has a reputation for making products of high quality which enable it to earn higher margins relative to other players in the various segments it operates in.
In recent years, however, Apple has lagged behind with regards to hardware integration. This can be attributed to the fact that Apple has grown to be so huge that all its moves are carefully made in order to avoid alienation of a certain subset of consumers. Unfortunately this has resulted in a product line which is far behind its rivals.
One example of this is the Mac Pro which was highly regarded with regards to performance and design some years back. In recent years, however, updates have been few and far between. The second generation of the Mac pro was for instance unveiled in late 2013 in a cylindrical form and it was praised for being innovative and well-designed since it saved on space while not sacrificing performance.
Since then updates have been non-existent and now the Mac Pro sports a graphics solution from AMD that is five years old and Intel Corporation (NASDAQ:INTC) processors which have been in the market for four years. This makes the Mac Pro look ancient since there have been tremendous changes in the chips sector.
Stalled development cycle
The MacBook is also suffering from a development cycle that seems to have stalled and now notebooks that are Windows-based fare better with regards to efficiency and performance. A case in point is when PC manufacturers such as Lenovo, Asus and Dell who began using Kaby lake processors from Intel in late 2016 but it took Apple seven months to do the same. For Apple the risk with trailing in new technology is that it will alienate those who build brands – early adopters and influencers.
On Wednesday shares of Apple declined by 1.00% to close the day at $155.57.