Analyst: Apple needs to 'think different' to 'regain mojo'

Summary:Apple is one of the biggest tech success stories of the decade, but one analyst believes that the company needs to "think different" in order to address the challenges it faces over the coming years.

Apple has carried out the biggest turnarounds over the past decade, but Sterne Agee analyst Shaw Wu believes that he company needs to "think different," and "change its strategy to regain its mojo."

In a note to investors, Wu suggests that Apple needs to address two critical areas. First is the fallout from the fact that the iPhone 5 is no longer viewed as a high-end product in the face of competition stiff competition from Android handsets. Secondly, Apple needs to become more aggressive in the mid-range markets.

However, Wu says that there is evidence to suggest that Apple is making forward progress in both of these areas.

First, the company stepped up to the challenge offered by larger form factor smartphones from the likes of Samsung, and bumped up the screen size of the iPhone from 3.5-inch to 4-inch. However, this may not be enough.

In the face to handsets such as the 4.8-inch Samsung Galaxy S III and the 5.55-inch Galaxy Note II, the iPhone 5 "is viewed as mid-range but with a high-end price."

Apple is "leaving money on the table by not participating in larger touchscreen form factors," claims Wu. He believes that while Apple is right to avoid the low-end market, the company needs to more aggressively target the midrange markets.

He points out that "the iPhone 4 and 4S are highly desired by many," but due to supply chain constraints, partly down to the fact that manufacturing capacity had been scaled back in favor of iPhone 5, they are "not as widely available as they could be."

The iPhone 4 and 4S are particularly attractive since their bill of materials costs have come down dramatically since the devices were first released.

Closing on a positive note, Wu says that investors "have shown a willingness to accept lower margins for sustainable top-line growth" with companies such as Amazon and Google, and that this should give Apple the space it needs to adopt a new strategy over the coming years.

Topics: Apple, iOS, iPhone

About

Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology -- whether that be by learning to program, building a PC from a pile of parts, or helping them get the most from their new MP3 player or digital camera.Adrian has authored/co-authored technic... Full Bio

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