Apple is no longer far ahead.

Author | Huang Yu

Editor | Zhang Xiaoling

Fifteen years ago, when Steve Jobs announced "One Last Thing" and pulled out the iPhone 3G, it marked the official arrival of the era of mobile internet.

Fifteen years later, Apple's new product launch no longer sparks market frenzy, but instead brings widespread disappointment.

The sentiment that "Apple has become mediocre" reached its peak after the release of the iPhone 15, compounded by the strong comeback of other smartphones, intensifying market concerns.

As the world's most valuable company, Apple has always been at the forefront of the mobile internet era. However, compared to Tesla, which is disrupting the automotive industry, and Microsoft, which is investing in artificial intelligence, Apple's innovation seems weak.

Beyond smartphones, Apple's progress in XR, automobiles, and artificial intelligence has been slow, and its software ecosystem is also facing challenges, with enemies on all sides.

This is also the fundamental reason for the divergence in investor opinions on Apple's stock price. People cannot see Apple's future clearly.

Apple needs to prove that it can once again become a "disruptor" and regain the confidence of investors and consumers.

Disappointment

After the Apple press conference on September 13th, the previous scene of dominating the hot search rankings no longer exists. Instead, smartphones once again dominate the hot search, highlighting Apple's disappointment.

The iPhone 15 series failed to deliver surprises beyond expectations. The iPhone 15 models can basically be seen as "small-screen versions of the iPhone 14 Pro." The PRO models are equipped with the most advanced 3nm process chip, the A17 Pro, but this is not surprising to the market. The Lightning interface has been replaced with USB-C, which was also expected.

The biggest highlight is the upgrade of the camera. The iPhone 15 Pro Max is the first to be equipped with a periscope telephoto lens, which can take close-up photos from a greater distance. It also supports 3D video shooting, indicating that Apple will strengthen MR content production and fill the gap in VisionPro content, showing greater ambition.

However, overall, the iPhone 15 lacks innovation. The market's sales expectations for the iPhone 15 series are also not optimistic.

On the eve of the Apple press conference, Dan Niles, the founder of hedge fund Satori Fund, posted on social media that he would short Apple. Niles believes that Apple's growth is slowing down and its performance cannot support its high valuation.

JPMorgan previously stated that the upcoming iPhone 15 does not have substantial upgrades, so it will not attract a large number of users to upgrade. Mizuho Bank in Japan also lowered its iPhone 15 production forecast from 84 million units to 73 million units, a decrease of 13.1%, due to supply issues.

In addition, as Apple's main competitor in the high-end smartphone market, its return is bound to reclaim lost market share. According to Counterpoint data, in the global high-end smartphone market in 2020, Apple accounted for 55%, while it only accounted for 13% in 2021. In 2022, Apple's market share expanded to 75%, leaving only 3% for others.

Now, with the strong comeback of the Mate60 series, it is expected to put pressure on Apple's sales.

Martin Yang, an analyst at investment firm Oppenheimer, believes that due to the launch of the Mate60 series, Apple's iPhone shipments in 2024 may decrease by 10 million units.

In fact, since reaching a sales volume of 231 million units in 2015, iPhone annual sales have hovered around 200 million units for nearly 7 years. Apple can only seek financial growth through cost control and software service ecosystem.

The consumer electronics market has also entered a mature competition stage. This means that once such a strong player emerges in the market, Apple's market share and growth will be affected.

What's more troublesome is that the service business, which accounts for more than 30% of Apple's gross profit margin and is second only to the iPhone (service business revenue accounted for 26% in the second quarter of 2023), is also facing challenges.

On September 6th, the European Union introduced a bill that includes six technology companies, including Apple, in the scope of the Digital Markets Act. Apple's business models such as the App Store commission and licensing revenue, which bring substantial profits to Apple, are now within the scope of regulation.

With challenges to its two core businesses, the iPhone and services, Apple is facing unprecedented difficulties.

Under the shadow, Apple's stock price has continued to decline since the new product launch event around September 13th. As of the close on September 14th, it has fallen by about 6% cumulatively since September. For this technology giant with a market value of over two trillion dollars, such a significant drop is rare.

Shackles

Apple has always been a leader in the mobile internet era, which was built on the application software foundation established by the iPhone 3G 15 years ago, leading human society into the "iPhone" era and driving other players to innovate.

This epoch-making innovation has elevated Apple to the top, making it a truly leading presence in the tech industry. The annual new product launch event is also regarded as the "Tech Spring Festival," attracting countless "Apple fans" to stay up late to watch. The stock price has embarked on a journey of 30 times growth in 15 years, making it the world's most valuable company.

However, since Tim Cook, who comes from a financial and operational background, took the helm of Apple, there has always been a voice of doubt. Many investors believe that compared to Steve Jobs, Cook has not done enough in terms of innovation and exploration.

After Jobs' passing, Cook focused on the iPhone and launched wireless earphones, smartwatches, and related entertainment subscription services, establishing Apple's unique ecosystem. This made the mobile phone business the core and most profitable business. However, at the same time, it seems to have trapped Apple. Apart from the iPhone ecosystem, there have been no breakthrough products and businesses, whether it is car manufacturing or MR.

In June of this year, the long-delayed Apple MR head-mounted display, Apple Vision Pro, was released. The high price and inconvenient wearing experience made Cook's statement, "The iPhone brought us into the era of mobile computing, and Vision Pro will take us into the era of spatial computing," still seem distant. The AI boom that has erupted this year has become a battleground for every tech giant. Since the beginning of the year, Microsoft's stock price, which invested in OpenAI, has risen by 50%. The stock price of AI chip manufacturer NVIDIA has doubled, and even Tesla's stock price jumped 10% overnight due to the positive outlook on its Dojo supercomputer by investment banks.

In past earnings reports and product launches, Apple rarely mentioned AI or large-scale models. This has led institutional investors to perceive Apple as a consumer goods company and believe that it lags behind in artificial intelligence technology.

Some analysts even boldly claim that Apple's dominant position may eventually be overturned as it is surpassed by Microsoft, Google, and Amazon in the field of artificial intelligence.

To break free from these constraints, Apple must make breakthroughs in artificial intelligence. In fact, Apple's investment and experimentation in AI have never ceased. AI is a core foundational technology and an indispensable part of every product Apple creates.

In the iPhone 15 series, the Pro and Pro Max models are equipped with Apple's latest self-developed chip, the A17 Pro, which includes a six-core CPU and a six-core GPU.

The A17 Pro is the first chip in the mobile phone industry to adopt a 3nm (nanometer) process. It improves the performance core speed by 10% and enhances the efficiency core speed, while the neural engine speed is doubled.

The powerful computing power of Apple's self-developed 3nm chip is expected to enable smooth conversations with Siri, automatic execution of multi-step tasks, and automatic document writing using only the computing power of the mobile phone chip. In the future, Apple's AI applications will only become smarter.

From the perspectives of security and convenience, "AI is everywhere," and it may start with smartphones. Phones equipped with outdated chips will gradually be eliminated in future competitions.

Compared to Elon Musk, who is outspoken and talks about the "Chat GPT moment" that Tesla will embrace, Tim Cook is a pragmatist who prefers to unveil AI products when they are mature enough for practical use.

If one day Cook introduces the application of AI as "One more thing," it could be Apple's "second growth curve."

At that time, Apple will not only be the most profitable company in the world but also a significant driving force behind technological development. In the era of AI, it will not be "lost in the crowd."