Apple Death Knell #63: Apple Is a Dead Company Walking

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Apple Death Knell #63Greetings. Apple released its Q3 2013 earnings report today. The company beat estimates for earnings, revenue, and iPhone sales, and yet still I must bring to you another Apple Death Knell, #63. Writing for CBS News, one Dave Logan penned a piece titled, "Why Apple is a dead company walking."

Yes, a dead company walking. It's only a matter of time before Apple's corporate body realizes it has no more orders to remain standing and keels over.

My assumption would be that Mr. Logan was concerned the burden of carrying the $150ish billion in cash Apple has, but instead we are treated to another attack on CEO Tim Cook and how his lack of vision is destroying Apple.

But I love Apple...

As many recent Death Knellers have been sure to tell us, Mr. Logan is a fan of Apple, so much so that it pains him to tell us how bad off the company is. He goes way back to the Apple ][ days, and he owned the first Mac. He loves the company's products, blah blah blah, and Apple is doomed.

The source of his pronouncement is the time honored practice of analyzing word mapping, or analyzing the speech of people to see what they're all about. This is vaguely like looking at someone's Twitter or blog word cloud to see what they're talking about. I have one on my personal blog, if you're interested. It's in the lower right side bar.

I'm actually a fan of this concept. There's a lot that can be understood about people, literature, political speech, and even crowd consensus by mining words for patterns, frequency, and usage. But just as is the case with programming, the weakness in such analysis is that when you put garbage in, you get garbage out.

Wrong Turn

And that's where Mr. Logan went wrong. He's not asking the right questions, and in my (seldom) humble opinion, he's misinterpreting the answers he does get. That said, let's start with his take on word mapping Steve Jobs, something he did pretty well:

An analysis of Steve Jobs' word mapping is that he focused on "honoring greatness," emphasizing "those things that don't change," getting Apple "back to its core," to its "core values." Jobs believed that the world "wants to know what Apple is about" and "what it stands for." Jobs contrasted this focus to things that he dismissed: features, boxes (as in, computer boxes) and speed. This word mapping revealed a true visionary.

I don't know that it's accurate to say that the word mapping "revealed a true visionary," though I understand where Mr. Logan is coming from. I think it would be more accurate to say it reveals Mr. Jobs's passion for change and his belief that core values shape a company. Interestingly, that's a key aspect of what Mr. Logan is missing concerning Steve Jobs's replacement, Tim Cook.

Tim Cook

Mr. Logan's thesis for Apple's walking death is that Tim Cook is "cannibalizing [Apple's] luster" while failing to bring anything new to the company. He has, according to Mr. Logan, the opposite view of Steve Jobs, and he is destroying the Apple brand.

From the piece:

An analysis of Cook's word map reveals the mirror opposite of Jobs. He emphasizes market share, customer satisfaction, an array of new features, better speed, increased battery life, more money paid to developers, more awards and more growth. In perhaps the most telling comment at Apple's recent developer conference (at about 16:30 on the video), he said, "We're not standing still... We have lots of innovation left."

This is the garbage in/garbage out part. Mr. Logan concludes that Tim Cook emphasizes market share when the exact, precise, polar, and total opposite is the case. Mr. Cook's word mapping might show that market share is often a topic of conversation, but it's because he's constantly asked about it by interviewers and analysts.

Reality

Tim Cook's actual response to these questions? That Apple is concerned with making the best products and that market share isn't a priority.

In addition, even when Steve Jobs was still alive and running Apple, it was Mr. Cook who fielded questions about market share from analysts during quarterly conference calls. Mr. Jobs attended only a couple of those conference calls during his time at Apple, and thus the questions fell to Mr. Cook. Since Mr. Jobs's passing, many analysts and a few interviewers have been the ones obsessing about iPhone and iPad market share.

That's the reason such concepts show up in his word mapping for Mr. Cook. It's not because Tim Cook is concerned about them, it's because people who don't understand Apple and somehow can't see that Apple makes more money than all of its competitors combined think Apple should do things like those competitors.

Dave Logan might love Apple, but he apparently isn't paying any attention.

Thinking Differently

He is absolutely correct that Mr. Cook emphasizes different things than Mr. Jobs, but that's where we run into more garbage in/garbage out problems. Mr. Logan is mired in the mindset that Apple must be lead by a revolutionary visionary to succeed, and the proof of this opinion (to him) lies in the fact that Apple hasn't released a disruptive product in the "several years" since Tim Cook took over as CEO.

From the piece:

His word map reveals a relationship to innovation that should deeply trouble Apple employees, investors and fans. Instead of producing innovation, innovation is something to be used, like a scarce resource.

Please note that it has been "several years" since Apple released the iPad—three to be precise—but that Tim Cook has been CEO for less than two years, not "several." He was promoted in August of 2011.

Garbage in, garbage out.

Why does Tim Cook get less than two years to disrupt a market and blow us all away? It's not a rational position, and even if it were, it misses the boat entirely. It will take years for us to know if Apple under Tim Cook can deliver more disruptions. Years.

And we've been hearing this stuff since the fall of 2012, when Mr. Cook had been at the helm for 15 months. It's frakking nonsense.

The Apple Culture

Tim Cook's job is to ensure that the culture that Steve Jobs built—the Apple culture—continues and can self-perpetuate. I've come to realize that the last thing Apple needed was for a product visionary, someone as revolutionary as Steve Jobs, to take over after Mr. Jobs died.

Any such person would have remade Apple in their image, tossing out whatever they didn't like and rebuilding the company anew. Just like Steve Jobs when he came back. That's fine, in and of itself, but we wouldn't be talking about Apple anymore. We'd be talking about a new company called Apple.

That's why Steve Jobs the visionary picked this man for the job. It turns out he knew what he was doing. Apple needed time to process the death of its founder and to figure out its place in the world without him. Tim Cook is the only man on the planet who could shepherd Apple through that process, and he's doing a great job at it.

In two years if Apple hasn't disrupted a new market, then you can start to grumble. In the meanwhile, Tim Cook's actual emphasis on making the best products, on being maniacal about making only the best products, about never rushing something to market, about being focused only on making the best products and letting the profits and the market share take care of themselves, shows that Apple still has its priorities straight.

Bryan Gets Cranky

Mr. Logan also said this, the bit I included as the representative quote in the Apple Death Knell Counter:

Apple appears to have a few years of its magic left. It will use this scarce resource to make its existing products better, faster, cheaper, with longer battery life, support for more displays and so on. It will introduce new products based on existing ideas.

But the days when Apple would imagine the unimagined, led by its core values, and bridge the worlds of technology and aesthetics by doing what no one had ever thought of before -- that's the Apple of the past.

I tell you what, Mr. Logan. Let's meet again in two years and see what you have to say.

One more thing: the magic that Apple is doing behind the scenes to increase battery life is way cool, it's hard as heck to do, it is remarkably innovative (though less sexy than a stunning form factor), and it's something only Apple can do because it controls the hardware and the software. Dismissing it as unimportant is foolish.

In fact, that's an idea worth exploring in a standalone piece.

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14 Comments Leave Your Own

Mike Alessi

Apple has infinite years left. Just because you can’t create an iPhone or iPad type innovation every single year (that everyone copies) does not mean you lack innovation. This company created entire sectors of products that created entirely new genres of products. And they will, in my opinion, continue to do so. Crazy Mac Pro coming soon.

anovelli

just a typo… great dismembering otherwise wink

And we’ve been hearing this stuff since the fall of 2012, when Mr. Cook had been at the “help” for 15 months. It’s frakking nonsense.

Lee Dronick

The battery life is very important. We are asking, and doing, more and more with our iPhones and iPads.

skipaq

Great article for the “Knell” count. I fully expect that the next blockbuster product Apple releases will be credited to Steve and not Tim. They might praise Tim for not messing it up; but the claim will be that Jobs thought it up and is the innovator of the revolutionary product.

geoduck

I like Apple
But it’s doomed because I don’t understand it.
I think Tim Cook is Brilliant
But I disagree with everything he does
I think Steve Jobs had the courage to make tough decisions and get them right
But I don’t think he made the right one with Tim Cook, though I can’t say why
Tim Cook has decades of experience at Apple
But I, who’s never run so much as a lemonade stand, don’t agree with his business decisions.
Apple makes great world changing products.
But it’s doomed because they aren’t coming out as often as I want.
Apple comes up with revolutionary designs that nobody else can and everyone else copies because they are that good.
But Apple is doomed because I, who failed to correctly assemble a Boy Scout birdhouse kit, don’t know what’s in the pipeline.

So sayeth the analyst.

wab95

Bryan:

I actually used that phrase, ‘dead company walking’ in comment not long ago, thinking such a phrase was so obviously sarcastic that it would instantly paint as ridiculous anyone who would hold to such a position. I never dreamt that someone would have the lack of social context to actually use the phrase with serious intent. This only makes it more difficult to take the piece seriously, given Apple’s performance indicators and now recent earnings report.

It is also noteworthy that pundit consensus, at the time of SJ’s passing, indicated that there were enough products in the pipeline that, for at least the next 2 - 3 years, whatever Apple came out with would have been not only blessed but contributed to by SJ. In other words, for the next 2 - 3 years, we would remain under SJ’s CEO momentum. That being so, how can we be less than 2 years out and holding Cook accountable for any perceived slow down in new product lines and services? Either SJ has a 2 - 3 year coat tail or he doesn’t, but we cannot say he does and then complain that Tim Cook has overseen anything revolutionary less than 2 years out.

Furthermore, I don’t understand how Apple can be doing so badly when no one else in the industry is cranking out anything new or innovative, let alone something innovative every six months, as one commentator mentioned by way of complaint against Apple on yesterday’s Bloomberg TV. We have a promissory note from Google about Google Glass, but no consumer product, and then we have…what? And from whom? Sure, we have evolutionary updates from industry giants, even some creative software solutions but little evidence that any of these are game-changers, in that they have altered the gravitational centre and course of the industry. Perhaps I’ve simply missed it. That Apple should live or die under a binary proposition of bi-annual (i.e. every six monthly) revolution or death is absurd and indicative of bias, or worse, ignorance.

Finally, and this impression was reinforced while I observed that same Bloomberg report, I believe that most of this negativity about Apple, for which Tim Cook is the inescapable lightening rod as CEO, results from let down and withdrawal from an unhealthy dependence on Apple (and the industry more broadly, but Apple specifically) to produce one new thrill after the next to satiate the insatiable, namely our pleasure in being surprised with something new, and the momentary distraction and escapism its exploration provides. We haven’t plumbed the depths nor integrated the full range of the tech we currently have, and already we feel incomplete, left hanging? Or rather is it merely the boredom that derives from superficial interest and an incurious and uninspired mind?

I was bewildered yesterday, while watching Bloomberg, as several pundits waxed euphoric about Android and how wonderful it was, comparing iOS somewhat unfavourably, when, by all performance metrics, Android users do not appear to be anywhere near as productive with these devices, nor developers anywhere near as materially compensated, as those in the iOS ecosphere. Everything real must leave evidence of itself, indicators of its existence, otherwise it is fantasy pure and simple. Where is the evidence, as measured in the hard data of consumer activity and productivity, of iOS being an impaired, inferior, or limiting experience for the user? Rather, I submit that this negativity is merely anger that stems from an imposed withdrawal from the six-monthly fix that some have come to expect from Apple, and not having received it under Tim Cook, they now openly devalue him and all things Apple. Yes, not only is Apple failing and worthless, it’s already dead. It just hasn’t been buried yet.

The challenge, as I see it, is for Apple under Tim Cook, to transition us to a healthier and more realistic set of expectations about the rollout of new vs updated consumer products. It will remain up to us, as it has ever been, to fathom the potential of the technology, and take ourselves to new heights of productivity and fulfilment.

Bryan Chaffin

Awesome comments, everyone. geoduck…that was perfect. wab95, you are as insightful as ever.

Thanks.

wab95

Many thanks, Bryan.

Geoduck:

A hit. A palpable hit.

geoduck

wab95
I thank you.

David Stotz

In my humble opinion, Apple Inc. has created exactly 5 “disruptive” products in it’s entire 36 1/2 years in existance:

1. the Apple II which brought the personal computer to the masses
2. the Macintosh which brought the mouse-driven GUI to practical reality
3. the iPod which created two entirely new industries
4. the iPhone with iOS which defined the smart phone as we know it and brought about the “app” industry
5. the iPad which made tablet computing and the internet appliance a reality.

In between these revolutions there has been significant and rapid product evolution, with each new version better than the one that came before. The company has not gone out of business or become irrelevant. To complain about going two years without changing the world is a little harsh.

Timothy Weaver

I would have enjoyed the analysis a lot more if the subject material was at all worth analyzing.

wmac

I have always enjoyed reading all the articles, editorials and product reviews at TMO for a number of years. I’ve also enjoyed reading the ADK analysis as well. This one, for some reason. has really annoyed me to no end. It is really getting old reading all the claptrap about Apple having lost its “mojo” because Steve is gone. Nothing can be further from the truth! A true visionary puts together a team that will stay the course of creating the best products possible that will delight the customer and have an impact on their lives.

When I look at some of the features coming with Mavericks, as well as products like the new Mac Pro, I can see that it is time, for me at least, to upgrade from my current 2007 models because I see the value and it will make a positive impact in my day-to-day life.

The fact that Apple has kept growing in the midst of a worldwide recession tends to follow the “flight to quality” decisions consumers make in tough economic times.
Thanks Brian for your analysis and I apologize for my slight rant. I feel better now….

Yussel1

Only time will tell the tale.

I think competition from Google will overwhelm the industry.  There is no dispute that Apple has good products however that is not the only issue.  You can only see what is on the surface and not what goes on behind the scenes.  Worldwide there are a lot of other issues with Apple including the price and distribution.  Third world countries need inexpensive products and the ability for mass open distribution and service.  Apple will have to open its doors and that is not a Steve Jobs Apple concept.

We will just have to wait and see what develops in the industry.

NewRider

Geoduck; one word- AWESOME post. I guess it is two words, still so right on.

This is the same rhetoric we have been bombarded with for way to long now and #63 is a real gem. The thing that roasts my buns is people believe these guys.

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