Apple Inc. Gets Punished for Doing the Right Thing

0
264
Validea Peter Lynch Strategy Daily Upgrade Report - 12/9/2017


A few days ago, the founder of Primate Labs, developer of popular mobile processor performance test  Geekbench 4, published an interesting blog post  about the potential degradation of the performance of Apple ‘s (NASDAQ: AAPL) iPhones over time.

It wasn’t long before this post was published that Apple furnished an explanation of what was happening to TechCrunch . Here is the statement in full (emphasis added):

Our goal is to deliver the best experience for customers, which includes overall performance and prolonging the life of their devices. Lithium-ion batteries become less capable of supplying peak current demands when in cold conditions, have a low battery charge or as they age over time, which can result in the device unexpectedly shutting down to protect its electronic components .

Last year we released a feature for iPhone 6, iPhone 6s and iPhone SE to smooth out the instantaneous peaks only when needed to prevent the device from unexpectedly shutting down during these conditions. We’ve now extended that feature to iPhone 7 with iOS 11.2, and plan to add support for other products in the future.

There has been considerable argument among those who follow Apple about whether Apple is doing the right thing here. The more cynical commentators seem to think that Apple is simply reducing the performance of its older phones over time to drive customers to buy new phones.

Image source: Apple.

The less cynical seem to think that Apple is telling the truth when it says that it implemented this feature that slows down the performance of its devices to prevent them from seeing unexpected shutdowns.

I count myself among the latter. Here’s why.

Proof by contradiction

Let’s suppose for a moment that Apple wasn’t being honest in its statement to TechCrunch and that Apple really is just degrading the performance of older phones to try to get people to buy new phones.

Is that strategy really likely to work? I don’t think so.

One of the ways a company builds brand loyalty is by offering buyers an excellent product that they enjoy using for the lifetime of the device. If customers believe that they were sold a bad product, or a product that was intentionally designed not to last, then those customers might think twice about going out and buying another iPhone to replace their current iPhones.

Maybe such a strategy would push customers to buy new phones, but they probably wouldn’t be iPhones.

If we assume that Apple’s goal is to maximize customer retention and maintain the immense brand equity that it has built over the years, then it would be downright nonsensical for Apple to maliciously try to worsen the user experience of the products that it already sold.

What Apple could have done differently

Fundamentally, Apple is doing the right thing: I think most smartphone users will trade off-peak CPU performance in their devices in exchange for the peace of mind of knowing that their devices won’t unexpectedly shut down. After all, a phone that works, but is perhaps a bit slower, is far more useful than a phone that doesn’t work reliably.

The one mistake that Apple seems to have made, though, is that it doesn’t seem to have a mechanism built into the phone to inform users that the battery has degraded so significantly that it’s impacting performance.

On social media, one user seems to have proposed what I think is a reasonable fix for this situation:

This whole Apple battery debacle, simple solution-get this-Apple should build a battery health indicator into IOS so people can tell when they need to get the battery replaced.

– ���� (@GRbUF8qUqYB4iPy) December 20, 2017

This indicator shouldn’t be in the form of an intrusive pop-up or something else that gets in the way of the user experience; instead, it could be as subtle as, say, an exclamation point superimposed on the battery life indicator.

When that indicator shows up, users can press on the battery indicator which would then take users to a page that illustrates the health of the battery and then provides a simple explanation for why it might be a good idea to get the battery replaced.

The explanation would need to be worded carefully so that users understand that battery degradation is endemic to all smartphone batteries and not just all iPhones. It should also explain that a new battery may lead to longer iPhone run times as well as potentially improved performance, but should also assure the user that if she or he doesn’t replace the battery in the iPhone, the device will continue to work reliably.

The user should be given the option to either disregard this message or to get the battery replaced (either by shipping the device back to Apple or by bringing it to a local Apple store ). It’d probably be in Apple’s best interests to not suggest buying a new iPhone in this message to avoid any appearance of an attempt at planned obsolescence.

10 stocks we like better than Apple
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Apple wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of December 4, 2017

Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy .


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



Original Source