Apple’s Cost-Cutting Measures May Delay Some Product Releases

Apple Reduces Trade In Value of All Its Popular Products Credit: Vytautas Kielaitis / Shutterstock
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The big trend for the tech industry in 2023 so far has been cutbacks, with nearly every big tech company from Alphabet to Zoom laying off thousands of employees and working hard to find other ways to slash their red ink as much as possible.

Apple hasn’t been immune to this either — it’s had to delay bonuses and freeze hiring — but so far, it’s managed to avoid the massive layoffs of its rivals. Much of that stems from Apple’s more conservative approach — the company runs lean and mean at the best of times, so it appears to have avoided the “vanity hiring” trap that other big tech companies fell into.

Still, even the world’s most valuable company is feeling the pinch of the current economy. In addition to cutting administrative and staffing costs, there’s another area within the company that’s taking a hit: research and development.

It’s common knowledge that Apple has plenty of projects on the go at any given time. In addition to the big ones that keep the rumour mill cranking, such as the Apple Car and Mixed-Reality Headset, the company undoubtedly has dozens of other smaller undertakings that don’t garner nearly as much attention — and some substantial ones that it manages to keep hidden for years.

However, when times are tough, companies have to set priorities just like the rest of us, and for Apple, that means choosing which of its R&D projects to continue pursuing and which ones can be put on the back burner.

As Bloomberg’s Mark Gurman shares in his latest Power On newsletter, Apple remains committed to doing everything it can to avoid laying off any employees. That’s not just altruism on the company’s part; Gurman notes that it also has to protect its reputation for stability and maintain its current momentum as it prepares to launch new products.

In short, as long as Apple appears to be weathering the current storm unfazed, customers and investors will maintain their confidence in the company, and more significantly, company morale will also stay much higher.

Apple’s top executives are seen as some of the most tactical minds in the industry. Layoffs would either signal that they’d made a strategic blunder or the global economy is in even worse shape than people feared. Either way, it could send ripples through different industries and economies.

Mark Gurman

Gurman reiterated the administrative cost-cutting measures he shared last week, noting that Apple has not only frozen hiring, but also doesn’t appear to be in any hurry to fill positions that people are leaving voluntarily. Further, while Apple hasn’t laid off any actual employees, it has let go of many contract positions. This includes contract recruiters, who obviously aren’t needed if the company isn’t actively hiring, but also some folks who had been stationed within engineering teams and other groups.

Apple’s Home Plans Delayed

More significantly, Gurman shares that Apple has reallocated its research and development spending “to more pressing projects.”

This has made it necessary to shelve some of its lower-priority endeavours for now. Specifically, Gurman mentions that this includes the “HomePod with a screen,” which has now been pushed back to “next year at the earliest.”

It’s unclear how much of a delay this represents, as analyst Ming-Chi Kuo recently predicted it wouldn’t come until early 2024. Of course, Kuo’s information may be based on decisions that had already been made by Apple at that time.

After all, we’ve been hearing about this mythic new HomePod since 2021, so it’s clearly been a lower priority project for Apple for some time. Now, with the need to be more deliberate in its spending, Apple surely prefers to focus its efforts on getting its mixed-reality headset up and running, which it hopes will revolutionize mobile computing. That’s certainly more ambitious than a HomePod with a screen — something that would effectively just be Apple’s take on Amazon’s Echo Show and Google’s Nest Hub.

Not surprisingly, these pushbacks won’t just affect this next-gen HomePod, but also other new home devices that Apple has reportedly been working on, including an Apple TV with FaceTime, and probably a few other ideas we haven’t even heard of yet.

[The information provided in this article has NOT been confirmed by Apple and may be speculation. Provided details may not be factual. Take all rumors, tech or otherwise, with a grain of salt.]

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