On April 26, Apple released its second-quarter earnings results. Unlike general four three-month periods that make up an organization's fiscal year, Apple’s fiscal first quarter ends in December, running from the beginning of October to the end of December. Thus, Apple’s second quarter is the period from January to March.
In a nutshell, Apple's 13-year growth streak finally came to an end. Apple brought in $50.6 billion in revenue for the first three months of the year, down 12.8 percent from a year earlier. Its net profit dipped 22.8 percent y-o-y to $10.5 billion over the same period.
Disappointment in the numbers sent Apple’s share price slumping 8 percent. Sluggish sales in China and the lack of innovation in the iPhone 6S weighed down on Apple’s Q2 results.
Despite the share price decline, Apple chief executive Tim Cook sounded upbeat. He said: “Our team executed extremely well in the face of strong macroeconomic headwinds,” said Tim Cook, Apple’s CEO. “We are very happy with the continued strong growth in revenue from Services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”
“This too shall pass,” Mr Cook said on a call with analysts, adding that Apple was confident “that the market, and particularly us, will grow again”.
The phrase “This too shall pass” is often attached to the parable of King David’s Ring. One day, King David told a goldsmith, "I want you to make a gold ring for me with an inscription that will get me through all situations in life. Find the ONE statement that can humble me I am on top of the world and embolden me when I am in the pits."
The goldsmith spent days desperately searching for the right statement that can satisfy the King but he was unable to find one. Luckily, the goldsmith ran into Salomon and the goldsmith presented the demand of the King to Solomon. Solomon thought about it for a moment and gave what he needs to inscribe on it: "This too shall pass." The goldsmith engraved "This too shall pass” on a ring and gave it to the Kim. The King was very much pleased.
I guess the way Tim Cook felt wasn’t so different from how Kim David felt. Tim Cook as the leader of the tech giant mentioned "This too shall pass” probably to express his determination not to be swayed by fleeting things that come his way.
Apple is no stranger to ups and downs. Apple co-founder Steve Jobs, known for an exacting perfectionism and his fractious personality, was forced out of the company he founded following his unsuccessful bid to have CEO John Sculley removed.
Having been fired from Apple, Steve Jobs founded a new company called NeXT. NeXT built computers that were unsuccessful hardware-wise but successful software-wise. Apple was floundering without Jobs around to make those final calls. Apple needed NeXT’s technology, so Apple ended up taking over the company. Steve Jobs assumed the mantle of Interim CEO of Apple and he magically turned around the company by continuing the amazing run of product successes on the back of excellent marketing tactics and creativity. A slew of innovative products, from computers and the iPod to the iPad and the iPhone, have catapulted Apple to the top of the industry.
Now, it’s Tim Cook’s turn. If Apple failed to bring a different level of innovation to the iPhone 7S, Tim Cook’s mention of the phrase: "This too shall pass” would be remembered as an evasive excuse made by some unforesighted CEO refusing to face up to the cold, hard reality.
Can Tim Cook lift Apple out of this crisis just like Jobs did Apple fans miss the innovativeness that Jobs brought in. However, he’s gone. And Apple led by Tim Cook is on shaky ground.
The famous Steve Jobs quote "stay hungry, stay foolish” comes across my mind.
The iPhone 7S is scheduled to launch in September. Will Tim Cook surprise the world Apple’s crisis serves as an opportunity to its rivals. I hope Apple will go back to the drawing board to think differently. And I root for Tim Cook and want to continuously see him at the helm of the company. And I’m looking forward to a good surprise from Apple.
