Yes, I knew what you meant by the term pipeline; what I don’t understand is why you apparently put so much stock in the ability to see what’s in it. What I mean is, Apple rarely publishes roadmaps for its products (though they certainly have on occasion, with mixed results). Secrecy is in their DNA. With the exception of pre announcing the iPhone, has Apple ever had a visible pipeline filled with big ticket products in development? I think you will have a difficult time finding even one that turned out to be a major game changer upon release.
In addition, Apple really really really hates what it sees as slavish imitators- the Samsungs, the Googles and so on. A known pipeline would encourage the copying it detests so much. It only took a rumor of Apple making an iWatch for Samsung to release its own version. So, since Apple has had tremendous success keeping their cards close to the chest and there is an ever-present pack of hungry competitors circling above 1 Infinite Loop, why do you contend that the absence of a pipeline now is a necessarily bad thing for Apple?
Forgot about the Mac Pro being announced 6 months in advance. But despite it being a big ticket product, I think it’s fair to say it’s not on the iPod/iPhone/iPad as game changer level.
That’s a terrible comparison. They start off with a goofy case and try to work from there, requiring them to go with an edge-case motherboard, unusual memory, etc. The case should be the last thing you’re worried about since the argument is generally about specs. Start with the components first and work from there instead of picking the closest-looking case and then trying to find whatever you can to fit into it. “PC hardware equivalent” shouldn’t start with the box.
This has nothing really to do with the Mac/PC debate but I just can’t believe anyone would take their comparison seriously based on that article.
Edit: To their credit, they do say at the end that “So is there a scenario where a PC DIY system could be constructed as a better value than the New Mac Pro? Definitely.” and talk about alternate builds that offer more power for less money. Which sort of makes the “actually costs more” argument moot.
Great comments. I’m going to build on some of them a bit.
I agree that the watch phone is a non-starter. The Samsung model is not even a self-contained smartphone; it requires a Bluetooth connection to a smartphone to work. Of course, a watch/smartphone could be produced, but like you said, screen size.
Precisely. There is no hardware improvement for Apple to make in the first place. The only thing to do, perhaps, is grab all the media and make them conveniently accessible, as I read recently about a very expensive stereo that will bring some order to the mess of Spotify, Pandora, MP3s, etc. There is some value-add to that, but it wouldn’t be revolutionary, and I doubt the market is all that big. Personally, if I didn’t have family members that “needed” it, I would cut cable right now and go all Internet, with my laptop being my “TV.” If you need to, you just plug the laptop into as big a monitor as you want. So I don’t even know what innovation is to be made here.
I never said that having a non-secret pipeline would be better than a secret one. I’m saying 1) that there are no rumors that Apple has anything in the works and 2) I doubt it has anything big + secret in the works. I’m just doubting that it has a pipeline at all, at least one containing game-changers.
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Logically speaking, Apple can do only two things to launch a huge product:
Dramatically improve on technology that already exists but is not serving the market nearly well enough. The iPod and iPhone really hit the sweet spot in this regard. What electronic gadget that people really want could really be improved right now?
Launch a totally new product that we didn’t even know we needed. Apple has never even done this before, except maybe its first home computers.
Sure, if Apple launches a Helm of Telepathy or something totally new like that, excellent. They will make a ton of money.
There is also plenty of room for failure with new stuff. I don’t think Google glass is going to go anywhere, really. It’s a niche product. The watch thingie that organizes your life that someone mentioned sounds like the same kind of thing. Niche at best.
But there are rumors, as you’ve acknowledged; the iWatch and the “real” Apple TV. And they certainly meet the definition of your sweet spot: tech (and its corresponding user experience) that exists but sucks. We might quickly dismiss a future of wearable devices for example, but who wouldn’t have dismissed a rumor of an Apple-branded MP3 player back in mid-2001?
I guess what I’m getting at is, what leads you to doubt there is a pipeline at all, or at least no game changers sitting in a Cupertino lab somewhere? I mean, they are a pretty big freaking company, they spend more and more billions on R&D every year, with lots of talented employees, they have a proven track record of innovation. This is the IMHO forum, so I don’t begrudge you your position, I just don’t understand how you concluded that the Apple tank is dry. Would you also argue the same is true for Apple’s competitors?
Luckily, neither Apple nor any other company is limited by your lack of imagination. Are you seriously giving us the “everything that can be invented has been” line?
You say they aren’t innovating but their cpu design team created a semi-custom 64 bit cpu for the iphone 5S that beats their rivals in independent benchmarks. Samsung and Qualcomm are now racing to try to catch up.
It may not seem like a new breakthrough product, but certainly it’s very important when trying to deliver new functionality in a small form factor beyond what your rivals can produce.
I disagree. I think you are conflating a few different issues here. As a company, Apple is doing quite well. In fact, pretty much better than any company ever. Yes, their growth has slowed, but that is to be expected with any enterprise their size. Additionally, they are too big, and have too much cash on hand for a hostile takeover. They don’t really have to listen to any investors, and they can survive for a long while if they do very little to innovate. Especially since Apple could probably go private if it really wanted to. From a business financial perspective, Apple is doing very well.
What might suffer is consumer opinions of the brand as an innovator and leader. That has very little to do with there long term profitability though. Just because Apple isn’t seen as “the greatest brand ever” doesn’t mean people won’t buy their products.
Your specific point only addresses how they can continue to win the hearts and minds of their biggest fans. Doing that might require them to shakeup another industry, but it’s not necessary for their success. If Apple’s goal is to just make money, they can do one or more of the following.
Buy another huge company like Sony, Cisco, Visa, Intel, Ticket Master, Clear Channel, or Verizon to more fully vertically integrate one or more of their current revenue streams.
Buy a bunch of major players in a bloated, inefficient, and highly regulated industry like healthcare, energy production, education, or mining . For example, they could buy Kaiser Permanente, UnitedHealth, and/or Aetna, then standardize and integrate all of their products and services into healthcare delivery.
Provide content for their entertainment portals like iTunes. They could create a record label, or produce TV shows a la Netflix.
A hundred other things other smart people that work there can thing of.
So did lots of other people, especially Commodore. The game changer here was IBM - notice how IBM PCs and compatibles chewed up market share and got the big boys interested.
Scully worked for Pepsi. Coke guys would have done better.
For profitability, sure. But look at their stock price. And many of the things being said about Apple could have been said about Microsoft a few years ago, in terms of making money if not innovation.
But it might mean they’d have to discount to keep market share.
That would dilute the hell out of management attention. Apple has a fairly small product portfolio. Maybe Apple execs could do something with ticket master, but they know nothing about those other companies. Intel, for example, is a manufacturing company primarily, and Apple doesn’t know much about fabs. Not to mention that Apple buying up Intel would drive PC makers to AMD as fast as AMD could accommodate them. The other choices are equally good.
UHC is pretty automated - at least in my experience. Based on their ads at least Kaiser has a good information system - my provider does. I don’t see much synergy. Are they going to turn away Android users at the ER? Or will it be, “Well, Mrs. Jones, your husband died but the incision was really beautiful.”
You realize why Netflix is creating content, right? And how much they are creating? Apple could distribute content through iTunes today, but it wouldn’t be a game changer.
Your idea has been tried over and over. Look at the number of things Microsoft got into, and failed at. Intel also. Google seems best at this, by trying lots of things, starting small, and not being afraid to kill failures.
The future is going to be ubiquitous devices, which know where you are. And they will make money through advertising, which is where Google shines.
I think arguments like this boil down to, “Apple is so clever, they’re going to come up with something!”
They definitely could. For example, they could launch a game console that approaches video games from a completely different angle. (Actually, that is kinda what the iPad is already.) They have a lot of money to do a lot of different things. The trouble is, it’s just easy to come out with new stuff. Sony was riding high for decades, but does anyone care that they invented the Walkman any more? The company is suffering the kind of malaise that awaits Apple if the latter doesn’t keep coming up with BIG products. The same thing with Microsoft. How about this stat:
Since the first quarter of 2005, Microsoft’s online division has lost $10.9 billion. And, Last quarter, for instance, Microsoft’s online division had an operating income loss of $262 million. And that’s a big improvement! Oh dear.
A really big point of this thread and my OP that I could have made clearer: It’s not really “personal” with respect to Apple. Any company that grows big enough encounters this problem.
The scale itself becomes the problem. What would have been a successful product for Apple in 2001 would now be seen as minor or even a failure because so much is expected of them. If they were to launch the iWatch and it made only a couple hundred million a year for them, it would be seen as a joke.
Well, for one thing, it has been going on four years since Apple has launched its latest exciting product, the iPad. April 3, 2010, according to Wikipedia.
Keep in mind also that Apple has been talked about in a different way than its competitors. This is the company with the largest market capitalization in the United States. It was supposed to be “different,” operating at a much higher level of innovation, intelligence, goodness, whatever.
Apple’s competitors have been thought and talked about in a qualitatively different way. Take Nokia. Nokia makes phones and was only expected to make phones, basically. Nokia was once huge huge huge. They have suffered from the same growth malaise. BUT they did come out with the Lumia phones, which IMHO at this point beat the shit out of the iPhones in terms of the user experience. I have one. Still, those products haven’t been a big success, and no one gives a crap. True excellence, but no one is throwing them ticker tape parades.
But that is how the big electronics giants work, including currently successful ones like Samsung. They try to make the best stuff that is currently being made in every category, including in dull markets like refrigerators. If fortune smiles, once in awhile they will produce a product that someone actually cares about, like the Galaxy smartphones from Samsung. I translate and write copy for a big Japanese electronics company, and the disorganization that we see would shock you. And the sheer wishful thinking in hoping that minor improvements in functionality or environmental performance will mean anything to anyone.
Apple’s competitors are kinda pathetic (except Samsung, which genuinely seems to be doing some things right). But then, large companies tend to be kinda pathetic.
Nope, that’s why I said that Apple could launch a “totally new product.”
Innovation comes in fits and spurts and doesn’t necessarily favor one industry. What “gadget” company is really exciting right now? Tesla. They are on the upswing and are genuinely changing the automotive industry. We just got a Tesla dealership in Indy, and it’s pretty freakin’ awesome. It gets people excited.
Back in the 90s (I was working in the drug industry), Viagra was a genuinely revolutionary product. By the way, apropos of this conversation, the trend in the drug industry has been toward consolidation, since a drug company is pretty worthless as a going concern unless it has a major pipeline (which can be a single blockbuster) to keep it going.
Sometimes people who fail to imagine are correct. One major reason the PC/laptop market got mature and is now actually declining is the failure to create new “killer apps” for the machines. People used them for word processing, spreadsheets, surfing the net, and games, primarily. PCs and laptops aren’t particularly needed for surfing the net and games, so now tablets are eating significantly into that market.
All the brilliance of the Valley never ended up creating a new “killer app” for this huge market. Sometimes innovation just isn’t in the cards.
You’re just repeating me here. The only thing I disagree with is going private. Impossible with that kind of market cap.
Already happening.
This is wrong, since they have already lost market share in the smartphone market; what saved them is that the market has been rapidly growing in the developing world.
Not sure exactly what you mean. The math is pretty clear: they need to introduce big new products to grow, definitely, and to maintain their present revenue, almost certainly. The smartphone market is already heading toward maturity (i.e., everyone who wants one has one), and they are already losing market share to cheaper and arguably better competitors.
My guess is that Apple will eventually go on a shopping spree with all that cash, but that would not be a good thing for Apple, and it is not a good thing for companies in general. There is a reason that conglomeration is considered an old school business practice that went out of style in the 1970s (and that companies spun off a bunch of stuff in the 1990s): it typically doesn’t work. You end up with a ragtag portfolio of different businesses with different needs requiring different styles of management.
And as Voyager said, it divides management attention. The whole idea behind conglomeration when it was big in the 1960s was, “We’ve got these genius managers whose brainpower is not being used to capacity. Let’s buy some companies so that they can apply it further!” It doesn’t work out because, for example, would you want Steve Jobs dividing his time between new gadgets and Ticketmaster?
And buying something like that doesn’t solve the growth problem. If they use their billions in cash to buy a company, then that is an asset that needs to produce as much return (ROA) or more than using that money to develop new products. In reality, the cash Apple has socked away is rather damning: it says that Apple can’t as yet imagine a use for it.
This goes from plausible to untenable.
There is no reason why a growth company, which Apple is still trying to be, would buy a company in a non-growth industry, particularly a crappy company in such an industry. That would suck for ROA (return on assets) and would make absolutely no one happy.
Sounds like small change compared to what their current products produce in revenue. I mean, Apple could probably open a five-star restaurant with money, too, and make it successful, but it would be meaningless on their balance sheet.
The trouble is scale. An idea that could make you a couple million bucks and a very happy person would be meaningless to Apple.
That is exactly what the whole reinventing of TV is. Not just cable. It’s going to be an integration of everything in the living room; standard cable, downloadable content, social aspect “what are your friends watching”, games, etc.
I’m not saying that Apple is going to do that, but TV is being reinvented and it isn’t finished yet.
Apple copies as much as those other companies do. It’s one of Job’s reality distortion fields that Apple doesn’t copy and the rest are slavish imitators.
In addition, smart watches have been around a long time before any sort of iWatch rumour.
In my opinion this is going to change the market quite a bit. Not only for laptops. Hardware can be produced very cheap nowadays. Google is going to profit from this immensely and just wait for all the Chinese companies launching their top tier smartphones.
That being said, Apple is in no trouble whatsoever. With that market cap and so much cash around it’s going to be a long time before the company is in trouble. I will say that with Job’s loss they have lost some of their reality spinning capability.
They haven’t come out with anything big in the past years. So what? Innovation isn’t the same thing as Moore’s law
Just a side story about conglomeration that I think is relevant.
Before General Foods bought Burger Chef (a company based in Indianapolis, my city), it was running neck and neck with McDonald’s for total locations and overall success. General Foods bought it, but Burger Chef was just a blip on its balance sheet. They didn’t need to run it well, and they didn’t. McDonald’s surged ahead, and GF eventually sold Burger Chef off to a crappy company that turned Burger Chef into Hardee’s, a fast food chain whose continued existence is a mystery to me.
You see this all the time with Google and Yahoo buying small promising companies and letting them die. Not exactly a part of our economic system that I think really serves the end user.
I think it boils down to Apple is just better at knowing what people want than they do. Who wants a $400 MP3 player? Who wants a cell a with no keypad? The iPad is just a big iPhone.
I don’t mean to be a pedantic dick about this, but since invoking the years is a common refrain of the “Apple can’t innovate anymore” charge… can you quantify what the number of years mean to the argument? Like is there a chart somewhere that shows how many years have to tick by before pundits can start calling Apple beleaguered again? Because if the years can’t be quantified, what can it possibly tell us about the health of Apple? For example, it was about five and half years in between iPod and iPhone, why doesn’t Apple get the benefit of the next year and a half?
This is not true. Android is a company that was bought by Google. HP bought Palm for WebOS, initially to develop themselves and it was canned, and now LG might be incorporating it in their TVs. Instagram by Facebook and their are many other examples. Apple recently bought Primesense a company that developed the Kinect Technology.
Not to mention the influx of money into the economy instead of “sitting” on a balance sheet.
I also don’t agree with your conglomeration idea. There are still numerous examples of companies that are active in different fields that are not related and are successful.
The one thing Apple has over any other computer or tech company is their base philosophy about control over the software and hardware of the products they ship.
No other company can claim this. And despite how some argue this as a weakness or shorting the end user, they’ve been able to maintain a tight correspondence and transparency between the technology they deploy and the quality of their products and user experience.
They have arguably the best OSs, software and hardware on the market, and despite not much happening in the big new product fanfare dept., they’re still in top shape. Sure, this can always change on a dime, and it’s true, they’ve set the bar very high for themselves, but so far I’ve seen hardly a sign that Apple’s changed that one philosophy as a company, and as long as that holds, I think we can expect everything else to just work.
