Apple is in trouble--but it's flawed thinking to say that's due to Jobs' passing

In My Humble Opinion
21

I really have to disagree with both of the statements in the title.

Apple is not in trouble. As others have pointed out, they’re experiencing a slowing of growth, but when you’re measuring size in hundreds of billions of dollars, how much bigger can you get? (In fact, put me down as predicting a major accounting scandal at Apple by 2020. There will be a lot of pressure to make numbers continue to look good whether reality supports it or not.)

On the other hand, I think the loss of Steve Jobs is a crippling blow. I’m willing to admit that I might be interpreting events in Jobs’ favor, but I do know that OS X 10.7 was the final straw that converted me to Windows, and my interpretation of the facts puts the blame on Apple’s current lineup of leadership rather than Jobs.

22

I don’t know (and don’t much care) how well Apple is doing, but a bit of historical perspective might be in order. Steve Jobs and Steve Wozniak, one a marketing genius and the other a technical genius, built the first commodity personal computer in, I think, 1977. By 1981, when the first MS-DOS (then called IBM-DOS) machine came out, Apple had a really successful computer, the Apple 2 (in various incarnations). Then Apple lost some of its allure. Probably because no corporate procurement guy ever lost his job by buying IBM. Then came the Mac. It was limited, the most important thing being the lack of expandibility. Both the Apple 2 and the IBM-PC and eventually clones had expansion ports. At any rate, Apple wasn’t doing that well, although I think the Mac was on its way. The board at Apple panicked, fire Jobs, mothballed Woz (who eventually left) and hired a Coca-Cola executive, one John Scully. Ten years later Scully had successfully flown the company into terrain and, in desperation, the board rehired Jobs. Who had meantime founded, wasn’t it Pixar, on its way to fabulous success. The rest is history. Sure he had a lot of help (I don’t accept the myth of the self-made man), but he made the great people in his company be great. I don’t know what he did, but the results seem to speak for themselves.

23

This is my whole point; that is the trouble. I said it would affect any company in Apple’s position.

You raise a good point that I had not considered: an important function of the CEO is not just thinking good things to do but also preventing the company from doing bad/stupid/ineffective things. During Steve’s run, Apple had some failed products but overall was good at not screwing things up. I think the recent OS problems (i.e., people hating them, or at least hating the direction in which they are changing) is an example of an unneeded screwup. But there were things about Mountain Lion too that I didn’t like (buggy as hell, Calendar made to look like a paper calendar, useless notification center, and so on…).

24

You mention “no evidence of a pipeline” a lot. What exactly are you looking for and why does the lack of it mean trouble for Apple?

25

My girlfriend just got one. The touchpad worked on and off for a while then quit. She had to buy a mouse to use it. Then the N key stopped working. After a week of light using (mostly checking email) she got a “Chrome OS is missing or damaged. Please insert a recovery USB stick or SD card.” And so on.

Checking online, it appears these problems (among others) are common. My opinion, it’s a piece of junk.

26

I don’t know about the ‘not innovating with their OS’s’ bit.

Apple had their desktop OS (OS X) and their device OS (iOS). They’ve been slowly merging them together, integrating the device concepts and techniques into the desktop software. On the other hand, Microsoft only wishes they had started doing this as long ago as Apple. Their OS side is a complete mess. The various permutations of Windows 8 are an attempt to get the two sides together, but instead of the slow, organic integration process Apple has gone through, Microsoft is in a near panic mode, trying to ram the two together quickly to catch up, and taking a lot of flak for it along the way.

27

My opinion is that Apple’s recent growth and profitability is strongly (completely?) linked to three things:

  1. iPod. This was the first portable music player that did everything pretty much right, and was integrated properly (with iTunes), and most of all, looked cool and had that hip cachet.

  2. iPhone. This was the first real smartphone, and they have millions of users locked in now.

  3. iPad. The first real tablet.

However, each of these devices’ success was based on being the first to market with a complete and well-done version. Since then, that differentiation has been lost with multiple portable music players, smartphones and tablets on the market, many of which surpass the Apple versions in capability.

Without another market breaker, Apple’s going to have to either do business the old fashioned way and try and out-capability their rivals, or rely on the existing installed base and hope to grow it through greater interoperability.

That’s almost certainly the reason their growth and profits have declined; the last “big thing” they came out with was the iPad something like 3-4 years ago. Since then, it’s been new variants of the same old things, and doing that is a different ball game than marketing something entirely new.

I don’t know if the lack of another “big thing” is something due to Jobs’ death, or something they foresaw before that.

28

I read several times in the past few years he wanted to take a jab at reinventing television. We already see the ‘smart watch’ is out there. I imagine the ‘next great thing’ in these arenas.

29

Watches are obsolete. You have a clock on your phone. Very few people want one on their wrist. In the days that phones were getting smaller and smaller, I could have seen a watch/phone, but since Internet is growing to be more important than the actual telephonic part of smartphones, phones have gotten larger so you can actually read the screen.

But yeah, Apple didn’t invent the portable music player or the cell phone, but they improved them and capitalized on it. They did basically (re-)invent the tablet market, since earlier tablets were too crippled by the limited hardware available.

However, yes, they then ‘ride’ on only making small, incremental changes in the various hardware models each year. They never really ‘innovate’ much from there. It amuses me year after year to read people’s comments complaining that the newest ipod/iphone/ipad is only faster hardware and a couple of minor changes from last year’s model. OF COURSE IT IS! It sells, and it works, so just make it a little better and they’re good, right? Unfortunately, there have been a couple of times they’ve been caught with their pants down by their competition, who come up with better features, and sometimes they stick their head in the sand and brush off cool features they should have embraced.

As for the whole ‘reinventing TV’ thing, I think it’s too late. TV is on the cusp of a larger change, as the content providers get absorbed by the Internet providers (Comcast owning NBCUniversal, for just one example). TVs are basically just large monitors these days for the equipment they are connected to (Roku, cable box, computer, etc), and ‘cable TV’ will eventually cease to exist as you just buy your content from your Internet company, or from another media company over the internet.

30

Pipeline means new products in various stages of development. I worked in the drug industry a bit, and it’s a very common phrase there.

Apple hasn’t delivered a big new product in several years now. There are no rumors of any, either. Without new products, the company can’t grow, and its revenues will probably shrink eventually, as it is becoming less competitive in its current markets, and those markets are themselves becoming less attractive (e.g., commodification of smartphones with sinking price points).

My use of the phrase “in trouble” seems to have been the greatest point of contention in this thread, although I think I was fairly clear what I meant by it. Apple has a ton of cash right now–“trouble” doesn’t mean going out of business. “Trouble” means no longer being in an upswing phase of launching exciting and dominant new products and growing revenue and profit; it means being in a downswing phase of losing market share and seeing revenue and profit shrink.

When Apple was a smallish, scrappy computer maker, they were refining a known product with miniscule market share–even in that market now, there is a ton of potential upside for them, although the market itself is mature, full of cheap substitutes, and no longer very attractive. Their sales of iPhones and iPads dwarf their computer sales. Some have said that this has resulted in less innovation in the computer area, and there has been a lot of griping about the direction of the OS. One person already said he ditched the Mac after OS X 10.7.

This is something that can happen to companies that, dollarwise, is good but can nevertheless cause malaise: having your original core competency become less important or even irrelevant to the big picture. An example is search in Yahoo. Before Google, that is pretty much where you’d go to search. Yahoo grew, that became irrelevant, and Yahoo is currently a profitable company but without any core area of excellence. They do a bunch of stuff sorta OK, and a lot of stuff not sorta OK.

I became a “Mac” in 2004 before Apple really blew up. At that time, the computers were still the most important thing. The debate of Windows vs. Mac raged, of course, but if you dug the Mac, then you felt like you were joining a special club that appreciated you. Now the Mac seems like something sorta close to an afterthought to Apple, and I don’t have that feeling any more.

31

I take a very spiritual view of everything because as for me the spiritual is the reality, what we experience is the result of the spiritual. From what I know Steve Jobs died a angry & bitter man; that due to the success of Android and his belief that he has created that ‘market’ (as opposed to angels who lead and ‘freely gave that to’ Steve to that due to favor for the ultimate benefit of all people). For many years Apple was freely given (through Steve Jobs), what was the next step for humanity, instead of embracing that gift and with the help of getting further insight as to what is next, he grew fearful and bitter of the competition and took the development as his own. Next thing you know he is dead (no surprise there), and Apple, well let’s just say is not what it use to be, we will see where the Angels who wish to guide us to a interstellar community arrive next.

I really do feel that the spiritual favor that has been given to Apple is now revoked.

32

There’s one rumor… that Apple is working on an enhanced Apple TV that, combined with iOS 7’s new controller support, will turn your iPod/iPhone into a mini-game console. If they can pull it off, it would be a huge (pardon the pun) gamechanger in the console space.

33

I would actually cite all of these facts as reasons why now is the ideal time to be reinventing TV. As you say, we’re at the cusp of large changes. If Apple could for TV what iPod/iTunes did for music… well, that’s worth another $100 billion at least.

34

Apple’s doomed! How will they survive?! October 25, 2001.

35

Yes, but mine has worked flawlessly, as has mine and my wife’s nexus 7.

If these devices work well enough, often enough, for cheap enough then they provide an option other than apple that is surely going to erode their market share.

Perhaps their remaining share is enough to keep them profitable and healthy but they’ve set the bar so high for themselves and relied upon the driving vision of one man so much that they run the risk of disappointing at every new release.
And what groundbreaking device has been released since Job’s death? Nothing particularly new. The ipad mini was in reaction to others releases rather than any great insight on apple’s part. The new iphone looks massively overpriced compared to similar android phones. I suggest that all eyes are on them for something truly new and the market won’t be kind if it is another iphone C.

36

Not sure if possibly having to gradually transition from a growth to a value mode because there is not much more room to grow, because the market segment has matured, counts as being “in trouble.” It has a similar PE and dividend yield as Exxon … is Exxon in trouble because they don’t have blistering growth potential?

That said the growth potential for AAPL is still there. The recent deal with China Mobile has potential to bring in lots of growth. As mentioned already television is in the process of major change. Apple has been holding fire in that line with its minimalist item AppleTV for a long time as it works out how it will interact (or compete) with the content providers. A full function Apple smart TV may not be innovation by now, but then Apple has never really done innovation so well. What they’ve done well is take the ideas that have been out there but not really taking off and execute them in a way that they do take off with them driving/revolutionizing the market. (iWatch? I hope not.)

37

You guys just wait until they release the iFax and the iBeeper!

38

Nah, they’ll make it up by suing I Heart Radio, claiming people think it’s theirs (iHeart).

39

Apple’s still viable and in great shape. The OP talks about the big picture, and how Apple used to be a scrappy little computer company, until the iPod/iPhone changed all that, yet in most pro and prosumer markets, Apple seems to be as strong as ever (despite the gnashing of teeth over the fate of the Mac Pro, which has finally seen an all-new design in that area).

It’s obvious they’ve hit a bit of a plateau if not a slope for a while. But after an amazing climb over 15 years from death’s door to market saturation, it’s okay to let them find their bearings again until it’s time for a bold, new product (my guess as been an iTV too, for years now. It’ll happen eventually, like the iPhone).

40

There are at least two fairly well substantiated rumors of new product lines that Apple is working on:

  • Some kind of life logging wearable computer (probably a watch), most likely incorporating the new M7 motion co-processor and using Bluetooth LE to communicate with iDevices.
  • A play in the television space, most likely building on Apple TV and using the new PrimeSense gesture technology that they recently acquired.