Sunday, November 6, 2011

Apple Stumbles With Battery-Gate and Siri Server Crash

With the launch of the iPhone 4S, Apple is stumbling in a similar fashion to the way it did when it launched the iPhone 4 last year. While last time there was Antennae-Gate, this time there are Battery-Gate, Yellow-Gate, iOS Error 3200, among other problems.

For Battery-Gate, many users have reported that the battery lasts only for 4 hours, even with minimal use of the phone. In terms of Yellow-Gate, many users have reported yellow spots on the screen. This actually occurred with the iPhone 4 as well in 2010. Apple admitted to the problems in the middle of this week, but said that a fix would be weeks away.

Adding to the quality issues, Siri was down for an entire day this Wednesday, when its server crashed. This was in addition to problems users outside the U.S. have had with Siri, in which the location features do not work. Apparently when Apple engineers were testing the iPhone 4S, they only tested the device in Cupertino, California. Thus, they were not aware of the fact that Siri's location features do not work outside the U.S.

Revaluing Apple?

Samsung recently surpassed Apple in the smartphone industry with its latest quarterly earnings report. Samsung sold 23 million smartphones in its latest quarter, while Apple only sold 17.1 million. With Wall Street's preoccupation with being number 1 in the smartphone industry, Apple falling behind Samsung will likely cause its shares to be revalued. However, with people still lining up for Apple products, the big question is not if the shares will be revalued, but when.

Analysts Displaying Herd Mentality to the Extreme

At a time when 49 out of 54 analysts covering Apple have either a Buy or Outperform rating on the shares, they are clearly displaying herd mentality. The analyst from BGC is perhaps the one investors should pay attention to, since he downgraded Apple to a Hold just before the company announced its latest quarterly earnings, and the shares subsequently fell 7% after-hours.

Apple Has Lost its Magic

Antennae-Gate in 2010 taught investors that Apple products were no longer perfect. It also caused many institutional investors to dump the shares, though many other institutional investors bought the shares when the PR nightmare was over.

At a time when many of Apple's customers are in their 50's and 60's, and buying Apple products in the hope of being “cool”, the company has clearly reached its peak. With Steve Jobs gone, Samsung having surpassed Apple and a long list of problems plaguing the iPhone 4S, Apple's magic has diminished. Its shares will be revalued by Wall Street soon enough.

No comments:

Post a Comment