每日英语：Apple Is Losing Its Cool
Turns out Apple AAPL +1.87% can't buy investors' affection with ever-bigger share repurchases.
They still care more that the tech giant keep its edge in profits. And to do that, Apple still needs to keep its edge in technology.
Apple's financial results for the fiscal second quarter ended in March were overshadowed by an announcement that the company is drastically increasing the size of its stock-buyback program, to $60 billion from $10 billion, as well as modestly increasing its dividend. Even so, its shares gave up initial, post-earnings-release gains in late Tuesday trading.
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That is because the company's financial performance was a mixed bag. Yes, revenue was slightly higher than analysts were expecting. But the company posted its first year-over-year quarterly earnings decline in a decade. And its gross profit margin of 37.5% was at its lowest level in over two years. A reason for that is that more customers are purchasing cheaper, older versions of the iPhone as well as iPad Minis that don't generate as much profit as traditional iPads.
And there may be more pressure on profit if Apple continues to struggle with product innovation.
A criticism of the current version of iOS, Apple's mobile-operating system that powers the iPhone and iPad, is that it has grown stale. Despite Apple's ability to steadily improve iPhone hardware, the iPhone's software has remained largely the same for years. That has allowed smartphones running Google's GOOG +0.97% Android operating system, like the Samsung Galaxy S 4, to close the gap.
So even before the next version of the iPhone is released in the fall, investors should watch the next release of iOS to see if Apple has anything special in store that will make future devices more appealing. Worth noting is that it will be the first new version of the software since last fall's management shake-up put new executives in charge.
In important ways, Google has already leapt ahead of Apple─notably in the services it is able to provide smartphone users. Google Maps is much more useful than Apple's alternative, thanks to years of investment. The search giant has also developed a unique predictive tool called Google Now. The tool can see a boarding pass inside a user's email inbox, for instance, and tell them automatically if their flight is delayed.
If Apple trots out only incremental changes for iOS, it will prompt more questions about the company's ability to maintain the premium price it charges for its smartphones.
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Apple still has big advantages that others can't match, including a large network of stores where users can get help with their smartphones. There is also a huge base of users that will keep buying iPhones simply because they still store all their music in iTunes. Though without big improvements to the device, they may feel less pressure to upgrade them as often.
There are other innovations waiting in the wings, such as a TV and a watch-like device. But it's hard to see these last two having as much potential as the iPhone franchise. In the meantime, Google is quietly adding enhancements to make its services indispensable. Historically, Apple's been great at revolution; evolution is proving trickier.
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