Apple's biggest WWDC 2015 challenge
WWDC 2015 is a little under a week away, and while the engineers at Cupertino are working hard to pull together iOS 9, OS X 10.11, and possibly some new hardware delights, Apple faces a much bigger challenge -- keeping customer and pundit (not to mention investor) expectations grounded in reality.
WWDC 201
At next week's keynote it's a safe bet to assume that Tim Cook and the gang will take to the stage to talk about iOS 9 and OS X 10.11 (any guesses what that will be called?), and maybe unveil a new Apple TV, or perhaps a new MacBook Pro or iMac, or an update to the Mac Pro line.
These products are Apple's bread and butter, the software and hardware that bring in the big bucks. Then there are things like Apple Pay and HomeKit, which have less to do with the bottom line and more to do with embedding iOS and to a lesser extent OS X into as many aspects of our lives as possible, turning the iPhone and iPad from shiny baubles to must-have devices.
All this is more than enough to fill up the two hour WWDC keynote, and get the developers fired up for a week of coding and design.
But this hasn't stopped the speculation that Apple will unveil "something" new and exciting -- as if pulling in a quarterly profit of $13.6 billion isn't thrilling enough. For a few years this "something" was a TV, but more recently this has changed into what is popularly called the Apple Car.
And there, in a nutshell, is the problem that Apple is facing. Here is a company that is growing at a phenomenal pace, and pulling in money at an unbelievable rate -- about $4.5 billion of revenue per week -- and it just isn't enough. There's a desire for Apple to be expanding into new, and quite frankly, dangerous territory.
Take the TV for example. For years now there really hasn't been a better way for tech firms to lose money than to make TVs. They've peaked in terms of size, performance, and features, and now all that's left to do is compete on price, which is not a good way to make money.
Then there's the car industry. While it's been experiencing growth since the wheels fell off in 2008, it's a hellishly cutthroat, crowded market. Tesla has made some headway in the sector, but it's facing pressures from carmakers and lawmakers alike, both resistant to change.
And there's the money. While revenues are increasing at Tesla, so are losses. And compared to Apple, Tesla's revenues are a drop in the ocean. Last quarter Tesla pulled in just under a billion, a figure that's less than what Apple makes in two days.
And yet there are no end of journalists and pundits who still want Apple to get into the car industry or TV business because iPhone and iPads and Macs aren't new enough, shiny enough, or exciting enough.
But the truth is that from a business perspective, these products are performing phenomenally. So well in fact that it's hard to see a TV or car doing any better. But still the media continues to generate astonishing levels of buzz about cars and TVs and, who knows maybe in a few years, an Apple hoverboard or flying saucer.
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