Are Apple Fans in Denial? No They’re Not

| Particle Debris

Denial?Now that Apple has succeeded beyond our wildest dreams, some bloggers find it hard to resist exploring the idea that all companies have a natural business cycle: birth, maybe a mini-death, revival, and final demise. It’s an intriguing proposition, especially for Apple fans who are especially touchy about the prospect. What’s a good approach to all this fuss?

This week, Forrester CEO George Colony raised a fuss when he ventured into the Theory of Social and Economic Organization by sociologist Max Weber. In this schema, Apple falls into type #3, the corporation run by a Charismatic individual. And what happens when that organization is faced with the matter of succession. His blog was titled, “Apple = Sony.” His conclusion: “Apple’s momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation.”

Let’s think about that for a minute. In my experience, there’s often much wisdom in the theses by experienced business leaders, sociologists, business analysts when comes to analyzing typical businesses. But is Apple quite so typical? It’s all too easy to point to Kodak, RIM, Blockbuster, and even IBM from what I’m hearing and conclude that Apple is in their mold. Your particular frame of mind, whether you’re an Apple fan or an Apple critic will likely decide whether you think the prior analysis of failure applies to Apple. What if it doesn’t? How do we go about proving that one way or the other?

And to just stop there and decide that because every business has a life and death life cycle that Apple is soon to be doomed, now that Steve Jobs no longer with us, is far too simplistic. Worse, it ruffles so many feathers that it’s hard to carry on a sensible discussion from there. It’s like politics. Once you announce you’re on one side of a contentious political issue, often based on armchair reasoning, the other side stops listening.

Deeper Questions

I propose that there are deeper questions to ask.

First, one has to be aware of who is asking these questions and what they have to gain.

Second, why are these issues being raised now when there’s no specific evidence that Apple cannot continue its success? Who can accurately quantify how long this run will be? So how does anyone know when it’s the right time to ask the question, other than to be self-serving? Or hope that, in their lifetime, they can say, “I told you so.”

Third, companies start to fail when technology leaves them behind or when a smarter, more nimble company can exploit their weaknesses and nibble away at them. Who is in a position to do that against Apple? Has Apple shown any evidence that they are invested in the past, can’t adapt, change and move forward briskly? I’ve seen none. In fact, a lot of Apple’s success is because it moves forward more quickly than the competition.

Truth us out there

Fourth, some companies start to die when executives make too many mistakes, sense competitive failure, then roll too much money to the top to protect their golden parachutes and thereby starve their operations. Is Apple doing that? (I don’t think so.)

Fifth, are the business practices that Apple’s executive team put into place over the last 15 years somehow breaking down and failing to adequately confront the competition? All signes point to the opposite. Apple has out thought and out maneuvered companies led by men with feet of clay. Apple’s values and execution have been shown to be superior to their competitors, and customers have rewarded Apple for that. What forces can we point to that are breaking that model down? (I don’t see any.)

A Major Intellectual Challenge

It’s going to take a lot more than a simplistic idea that all companies have a life cycle and therefore must eventually waver and collapse. It’s going to require a serious, arduous, ingenious analysis to figure out when how Apple’s fortunes will turn. There must be indicators. Right now, there are none.

Nowadays, Apple is doing a better job than any other technology company, and it continues to grow. It’s premature to suggest the end is near because one can’t conceive of Apple getting any bigger. Or because one is invested in discrediting Apple’s values and success for whatever reason. In my experience, the most energetic naysayers are the ones with the most limited vision.

Let’s let Apple play out its own history and enjoy the success. (And keep a sharp eye on them as well.) When the time comes, we’ll see it. Apple will see it. No one knows when that will be. But then, perhaps the Childhood’s End won’t be a catastrophe. Perhaps it will be a stepping stone to something even better. Even that may be a long time coming. Not everything has to happen today, or even in 48 months, on the blogger’s own schedule of Internet rush to judgment.

So let’s drop the silliness and move on.

Tech News Debris

Sometimes, no one article can put a complete picture together. This week, I ran across several articles that, taken collectively, provide some insights into what’s going on with Android versus iOS and smartphones. 1) “First Android revenue numbers revealed: $278.1m in 2010, iPhone more lucrative.” 2)”Apple Q1 U.S. Smartphone Mkt Shr 59%, Vs. 36% Year Earlier.” 3) “Microsoft’s Mobile Comeback Is Looking Terrible.” The gist of these articles is that, despite the hype, Microsoft’s phone efforts are going nowhere and that Android isn’t succeeding against the iPhone as wildly as one may have surmised.

In the preamble, I alluded to what technology could eventually supplant Apple’s products. I’ve always thought that it would be personal robots, probably because of my science fiction readings for my whole life, especially those of Isaac Asimov.

I. Robot

Image Credit: 20th Century Fox

We have a long way to go when it comes to stepping into a positive, productive future with robots. I’ve even written some science fiction myself about that. When we look at how our privacy and security is perhaps undermined by a modern smartphone, it’s hard to conceive that our species is ready for commercial robots. Along the way, we have many tough issues to address, for example, “New Study Asks Who’s to Blame When Robots Harm Us

Finally, remember all the fuss when Apple introduced iOS printing a year ago? Ryan Faas, an expert on Apple in the enterprise, takes a look a corporate printing from the iPad and finds it wanting. “Most Companies Are Ignoring The iPad Printing Problem.

___________

Image Credit: Shuterstock (Truth and Fortune Teller)

Comments

Ross Edwards

Coca-Cola has been profitable for a century.  Wall Street overemphasizes growth over fundamentals, so the “buzz” on Apple won’t always be as rosy as it is right now, but there’s no reason they can’t be a tech mainstay for the foreseeable.

skipaq

Loved X-Files. I’m on the wrong side of the age hill to be concerned over Apple’s longterm future. But you have given as good a vision one could based on nearterm prospects.

Yes. The truth is out there. Found it.

aardman

Most, no, all negative assessments of Apple’s future performance boil down to “this can’t possibly go on forever” without really giving any reason beyond “just because’.

barryotoole

I agree with you John, Apple is not going to fail - in short or medium term. Who knows anything about the long term.

The thing we may miss is the genius of Steve Jobs. There could be someone at Apple with his vision who could give us the likes of an iPod, the iPhone, and the iPad - in just one decade, but I doubt it. We have lived through history, and there may be several decades when a similar person arrives.

wab95

It?s going to require a serious, arduous, ingenious analysis to figure out when how Apple?s fortunes will turn. There must be indicators. Right now, there are none.

Agreed, John.

Many have already commented that, if pundits keep opining that Apple will fail or at least fade, sooner or later one of them will be correct, rather like predicting rain. Indeed, so frequent have been these opinions that they no longer appear either original or even particularly intelligent.

In this respect (failure, either absolute or relative) Apple face two existential threats. One, evidence of which we have seen, is relative and subjective. If Apple, for example, sell fewer iPhones than the Street expected, even if reflecting year on year growth, it buggers the boffins and panics the short herd. Stock plummets, and pundits proclaim Apple all but interred. This is not real failure, but its perception relative to an arbitrary indicator imposed on the company by speculators. It rattles confidence in this company as in no other, primarily because of its beleaguered past. As an antidote against this affliction, I suspect, Apple consistently guide conservatively on quarterly performance.

The second are objective indicators, of which there appear to be few, if any, around which general consensus has coalesced. In the absence of such standards, an alternative approach to divining objective indicators is to tease apart those factors associated with Apple’s success, specifically, those possessed by Apple during its growth that were absent amongst its competition. Here, several present themselves, as potential performance indicators, but most lack anything beyond mere descriptive power (for example, regular product refresh cycles - important, but they say nothing about quality or uptake).

I believe there are two that stand out as distinctly Apple, and are, in the main, lacking amongst the competition; 1) a relentless focus on individual user experience; 2) parsimonious integration. The first is self explanatory; by the second is intended a progressive integration of products and service utility with the least necessary range of offerings - keeping options and tools simple and easy to identify and use.

While one can dismiss these as strategies and not performance indicators, I argue that they qualify as the latter, as both are consistent outcomes in nearly all of Apple’s product/service outputs and have resulted in runaway success. If and when Apple either depart from or fall short of these, which they have on occasion, such as with iWork.com, then one can have cause for concern.

If these are correct, I would simply caution that it is not in the single or isolated failure cases that one need be overly concerned, but in the balance within a period (e.g. a year) of successes over the total of its outputs. Over time, these signal the company’s trajectory, which is either on the ascent, flat or in decline.

Whether any of this is accurate or not, I agree with you that better analysis, than what often passes for it, is required.

THGD

Haven’t we seen the same screed from the same “experts” for the last ten years now.
I do not recall these guys ever lauding the visions of Steve Jobs when they were trashing the iMac, the iPod, the retail stores, the iPhone, the iTunes store, the Mac AppStore and the iPad.

Steve was usually portrayed as some nefarious cult leader who hoodwinked unsuspecting people into buying overpriced toys that would soon fade away.

Now the “experts” portray Tim Cook as a light weight placeholder executive without vision and no hope of preventing the demise of a once great company.

The day Apple starts listening to this BS is the day they will start their fall.

UrbanBard

Perhaps a better question to ask is, ?Does Apple?s competition have a clue about how to beat Apple?? I have seen no evidence of that.

Bud777

I think there is a tendency in the post Jobs era of Apple to confuse the effect of the loss of a charismatic leader with the the effects of cultural change on a company.  When Jobs was forced out of Apple before there was a cultural change from innovation to bottom line focus.  We all know what happened.  In the current case, the culture is preserved, or appears to be.  I think this is an important distinction that invalidates Colony’s argument

John Martellaro

Bud777: Exactly. Not every complex business analysis case can be thoroughly explained with armchair analysis.

i_newit

Easy to comment about any company’s decline in the middle of the biggest recession in recent history.  Latest earnings numbers point to a market that clearly perceives the value of Apples products to be worth the cost.  In our debt economy, any perceived value is inflated, because consumers perception of true value is blurred.  ie. It’s ok to spend more that you can afford, as long as you can make the payments.

Log-in to comment