Apple Inc. (NASDAQ:AAPL) will not be ready to show off a TV service at WWDC in San Francisco next week. The product isn’t ready, according to Rod Hall of JPMorgan, because of the “complexity of the content negotiations.” The product was expected to change the TV world, but it seems that Apple is bogged down in talks about how to bring it to market.
In a speech given on Tuesday the Apple boss said that users shouldn’t have to “make trade-offs between privacy and security”. Cook didn’t mention Google Inc (NASDAQ:GOOG), (NASDAQ:GOOGL) or Facebook Inc (NASDAQ:FB) by name at EPIC’s Champions of Freedom event. He did, however, hit out at firms that “built their businesses by lulling their customers into complacency”.
Apple loses the product pipeline
Apple released the Apple Watch before the device was ready to fulfill orders. The wearable will finally end up on store shelves in June, if training for the firm’s legions of retail staff is to be believed.
The in-store launch of the Apple Watch comes after months of frustration for those trying to get their hands on the device. At the same time, it seems as if sales of the Watch aren’t going to be all that strong. Bernstein analyst Toni Sacconaghi thinks that the firm sold just 3 million units in the June quarter.
The TV service, lost in the realms of complex negotiation, probably won’t be launched in June. The service is thought to involve deals with all of the major over-the-air TV producers as well as many cable firms in the US.
Andy Hargreaves of Pacific Crest says that Apple is set to launch an expensive TV service that will replace cable altogether. He says that Apple is banking on the American “incredible willingness to pay” for TV content.
Apple may well get the TV service out later this year, but the failure to launch now reminds one of the problems with the Apple Watch this year. Tim Cook may be losing control of some aspects of the business, and that is hurting the firm in the short, if not in the long, term.
Apple was supposed to launch the TV at WWDC 2015. The event takes place between June 8 and June 12. That’s not going to happen, however, and investors may be forced to think about Tim Cook’s performance in recent months.
Tim Cook slows down
Apple does one thing really well. The iPhone is the most popular product in the world, and it’s going to stay that way for some time. The firm will do well in 2015 off of the back of the phone, and it may continue to thrive as sales grow or remain solid at the very least.
New products still haven’t seen much success at Apple since Tim Cook took over, however.
Beats Music, another hopeful set to launch at WWDC, only exists because the firm failed to get users onto iTunes Radio. Apple Pay, though the target of much hype, is still not a major player in payments, and other tech giants could easily take over.
Tim Cook is a great CEO, and his reign at Apple has seen an incredible jump in value at the firm. His handling of new product launches, however, may not be all that good.
Even with product delays and the awful launch of the Apple Watch, UBS analyst Steven Milunovich says that he can’t “see much downside risk at this point and remain positive on the long term.”
Even if Apple ruins every single new product that come out of the gates, the firm will still have the iPhone. That’s all that investors really care about at the end of the day.
As long as Tim Cook does a good job in that business, floundering on the side will be tolerated by shareholders. But while, “Apple doesn’t want your data,” as Tim Cook told yesterday’s conference, the firm does want to get its hands on your cash.
The firm is not able to do that without success in at least one product category. The iPhone is great, but it can’t last forever. Tim Cook may not like collecting user data, but he should pay some attention to what people want and try to give it to them before sentiment on Apple turns around.
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