It's about meeting continued very high expectations. This is what is starting to drive Apple, rather than great products. They are beginning to substitute hype for substace. We all know their profitabilty is great for now. But on their current path, how long will that last? Shareholder expectations are influencing decisons.
You need to better understand Consumer Electronics history. When great new gamechanging products emerge they go through a very predictable cycle. AM radios, 78 RPM record players, calculators, digital clock radios, home telephones, VCR's, personal computers, film cameras, video games, cassette players, record players, CD players, camcorders, they all followed the same script. Smartphones are no exception.
The first phase is adoption, getting an audience for the product, getting it sold. The next phase is expansion, watching as competitors enter the space, innovating and copying others ideas. After that comes mass consumption, where prices drop and new discount channels are opened. The product explodes, every consumer has to have one and every retailer wants to satisfy them.
Years later, we enter the saturation phase where sales growth starts to halt and consumers stop buying as aggressively because they already own the product and it's good enough. And it's at this phase where the surviving manufacturers batten down the hatches, curtail innovation, and stop the bloody pricing war and raise their prices so that they can maintain their profitability when sales units drop off sharply.
This is the phase iPhone has entered, taking pricepoints up, reducing R&D spending, making sure each phone makes maximum profit in a phase where fewer units are going to be sold. Take that $349 iPhone 6 and make it into a $1250 iPhone X. Weather the storm for a few years, wait for the next big tech breakthru, that must-have feature that will jump-start smartphone sales again, and then go back to that expansion phase and enter another price war.
Most recently, this happened in the HDTV realm. 2005 plasma HDTV's starting gaining momentum. 2007 LCD's brought the prices down. 2008 thru 2010 dramatic expansion as every household in the world bought an HD panel. 2011 the failed attempt with 3D to jump-start the industry. 2015 the infusion of 4K panels which are leading growth in the category for the first time in nearly half a decade.
Shareholders understand what phase Apple is in, these blips with stock corrections and dramatic statements from a few analysts are inconsequential. And guess what? Apple is in a better place than, say, Samsung. Apple has deliberately delayed certain innovations like facial recognition, wireless charging, and OLED screens, this stuff is brand new to iPhone users. It's old news to Android. So on the product lifecycle Android is the one in trouble, not iPhone. Apple has a few years before everyone in an 8 or an X gets bored.
