Apple (AAPL) is the most profitable consumer electronics company in the world by a healthy margin but according to one industry watcher, the company has stopped innovating. Apple’s record-breaking iPhone 5 launch helped the company pull in $36 billion last quarter, and its high margins yielded a net profit of $8.2 billion. According to Global Equities Research analyst Trip Chowdry however, the record demand for Apple products at present has nothing to do with innovation, which the Cupertino, California-based company has been lacking lately.
“Apple’s innovation is sputtering,” Chowdhry wrote in a research note to clients. “Why is that Apple, the company that brought touch to phones and tablets, stopped just there and did not bring touch to notebooks and iMacs? Why is it that Apple brought high-resolution screens to…some MacBooks and not to all devices? High-resolution screens are a commodity today.”
What’s going on at Apple that is stifling innovation? Chowdry thinks the answer may have led to Scott Forstall’s departure and the recent executive shake-up.
“Our contacts speculate that Apple executive leadership may have rushed Scott Forstall to deliver products prematurely,” Chowdhry noted. “This may also indicate that Apple may be lacking a three- to four-year product road map, because if a roadmap existed, engineers would not be pushed to ship products prematurely — especially when they are not fully tested.”
Innovation or no innovation, Apple anticipates a record holiday quarter with earnings guidance at $11.75 per share on revenue that is expected to reach $52 billion.
