Apple is Doomed, Soaring - Apple is Stupid, Brilliant - Which is it?

| Particle Debris

Apple is a very large company. It's so big that it's impossible to quantify the company overall. Only specific elements of the company can be characterized. As such, it makes no sense to label Apple as a whole because some elements are failing and some are flourishing. This leads to my rule #1 for a large company.

We tend to like simple metrics. This company is brilliant. That company is a loser. We like to treat companies like people. And then we let the CEO of the company assume the brunt of our simplification, treating the entire company as we treat the CEO.

This is not to say that the CEO isn't responsible for the conduct of the company. When the CEO is obviously failing and flailing, it's time for the board of directors to look for a replacement.

But the nuance here is that any large company is really a superposition of multiple states. It can be doing well in one area and failing in others. To put it more generally, I present my first law of large businesses:

Any sufficiently large and thriving company is both failing and succeeding simultaneously.

Here's an example. In the April 25-May 8 issue of Aviation Week & Space Technology, (p.11), the CEO of American Airlines, Douglas Parker, says:

I think it's highly unlikely you'll ever see losses in this business again. We're in a whole new world."

Mr. Parker is referring, according to AWST, "...systematic long-term losses suffered by U.S. Airlines. He says consolidation has put the industry on a much sounder footing." Lower fuel prices have, no doubt, assisted.

And yet. And yet, if you ask any airline passenger, they'll tell you that flying is the most inconvenient, frustrating and uncomfortable thing they've ever done. Seats get smaller and closer together every year. The food, if even offered for a price, is awful. Washing hands in the lavatory is like using toxic waste.

The company is thriving and customers are complaining. Sound familiar?

And so, it only makes sense to evaluate Apple in specific areas. Any analysis of Apple has to include a discussion of a wide spectrum: health of the developer community, customer satisfaction, the communication and leadership skills of the executive team, the overall financial success, the quality of various products—to name a few.

For example, I would rate Apple A+ for its iPhones but F for its efforts with the Mac Pro and its partner Thunderbolt display (now three and five years old respectively). iTunes gets an F, but OS X El Capitan gets an A.

Of course, a detailed checklist of a company's spectrum is a lot of work when it comes to sizing up Apple and its prospects. It's far, far easier to treat Apple like a homeless person who shoplifts a box of crackers. The person must be some kind of deranged criminal, yet most know the poor soul has a heart of gold.

In the last few weeks, after Apple's simultaneously good and bad earnings report, I've seen Apple analysis all over the map. Not much of it was put in light of other high tech companies. When Apple does one thing poorly, the whole company comes under greater scrutiny. When Apple pulls off something brilliant, like the iPhone 6 in the fall of 2014, the whole company is given the benefit of the doubt.

Hope springs eternal that brilliance in one area will percolate into all areas. It seldom does.

That's why when Apple screws up, we call them on it. But the overall faith in what the company is trying to achieve remains steadfast. Like a photon, travelling at the speed of light, a particle and a wave simultaneously, Apple is both succeeding brilliantly and failing in many areas. To understand that is genuine wisdom, not brainless bashing.

My question is: Who''s in charge of the Adjustment Bureau to fix the crappy stuff while Tim Cook focuses on China and the Apple Car?

And when the spirit of Steve Jobs begins to walk the circular arcs of Campus 2, like the saucer section of the Enterprise, let his memory cast a long shadow of passion and brilliance.

And fear.

Next page: The Tech News Debris for the Week of May 2nd. Apple's biggest challenge yet.

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Neil Cybart: When dealing with unit sales growth, Apple needs to bring in many new consumers just to break even each year.

Is it true that Apple will lose money, at least in the iPhone sector, if it cannot get new customers? Returning customers aren’t enough to prevent losses? Are there Apple-generated financial numbers to substantiate this?

The one thing management needs to work on is moving the Apple narrative away from iPhone unit sales growth.

Fine by this long-time customer/shareholder, but would analysts allow this?  Or mediafolk, especially the click-bait types?

I’d like to see Apple generate profits from new products (and from existing product lines, like Macs), and diminish the importance of iPhone sales. Is this unlikely?

John Martellaro

iBuck. As Cybart explains it, unit sales growth is contrasted to profits. A product that is declining in unit sales can still show a profit, but eventually that’s bad for the product’s future. We’re seeing that with the iPad: negative unit sales growth.

The way I think of it is skipping on the water from wave top to wave top. If a company isn’t selling products that have increasing unit sales growth, it isn’t an investment opportunity. And it has the wrong product mix.

That’s why Apple ruthlessly leaves the past behind and catches the next wave, be it iPods => iPhones,  streaming music, cloud services, healthcare, wearables or…cars.


Apple is inscrutable and quirky. No one cane argue with that.


Of course, I meant “can.”


Yes, but there’s a fine line between recognizing the way the wind is blowing and simply chasing fads. That line is very blurry these days, at very great expense! wink


IMHO, Apple can get away with silence when they surprise / delight every 9 to 12 months, but these l-o-o-o-n-g stretches of muteness on plans for current and future hardware is becoming worrisome.

Obviously, they can’t tell all their competitors their five-year strategic plan, but what the heck is going on with monitors? Mac Pros? CPU refreshes? And the mess that’s become iTunes? What were users supposed to get “Looped In” to at the last product announcement? Was that another product launch (say a competitor to FitBit?) that was sidelined at the last minute?! Strange, no?

Can’t help but wonder if construction of “The Spaceship” hasn’t become a serious distraction from running the company for Cook and Co. You hear of all the incredible planning that has gone into the design, architecture, furniture and wonder what if that same energy had been invested in the Apple Watch, next iPhone, iMac, OS X applications? Are we seeing a significant slowdown in innovation so the Temple of Jobs could be erected?


Can’t help but wonder if construction of “The Spaceship” hasn’t become a serious distraction from running the company for Cook and Co.

I’d like to think that it is more Apple Car that has become the serious distraction from running the company.

I am sure Apple is realizing they can’t depend on iPhone/iPad/WatchMacs for their future growth. Could they maintain with these devices? Sure. But can they grow their revenue/profits focusing on only these 4 areas? No. Thus, Car. If Apple can crack the code of the automobile, the sky’s the limit.


Perhaps (as a shareholder) I should be more positive and say, “WHEN Apple cracks the code of the automobile, the sky’s the limit.”

One thing’s for sure - if they do make Apple Car, they will have to seriously expand the size of their Apple Stores to allow for a Car showroom. But think about how cool that would be - Apple stores twice the size, with a Car or two in the store, with every Mac/iPhone/iPad/Watch in the store immediately capable of accessing all aspects of Car’s functionality, vitals, etc.

I’m hoping for a Car made from Liquid Metal!!

Lee Dronick

  I’m hoping for a Car made from Liquid Metal!!

Rose gold liquid metal smile


Ha. Beats transparent aluminum any day!!


What Apple car? Oh, the vaporware that might appear late next decade?
By then if Apple still wants to dabble in big-boy things like Elon does (with no historical evidence they can), MAYBE they will have learned a few lessons but by then it won’t be Tesla you will be talking about, it will be BMW, Chevy, Hyundai/Kia et al that will be already established E-Car makers and the biggest threat to Tesla’s future. Being that Apple rarely innovates - it rather perfects pre-existing technologies - their modus operandi might actually help them big-time vis a vis a fully autonomous car.  Apple MAY be able to “time” a fully autonomous car because millennials will NOT be driving their own cars I’d guess as soon as 15 years from now +\-. The profit margins of cars suck, period though.


Perhaps Apple has figured out how to use its robotic manufacturing expertise, which we’ve only seen a glimpse of, to change the rules.

John, add to that Apple’s growing expertise in metallurgy, which has huge impact potential in the automotive manufacturing space. Not that I look at Gizmodo much, but they have an interesting article about Apple and metallurgy.

Everything Apple has learned, patented, and is actively doing from a metallurgical standpoint with iPhone/iPad/Watch will apply in some way to Car - anodized aluminum, custom-designed alloys, chemical processes, cooling and casting, grain structure, buffing, texturing with microscopic zirconia beads, strengthening stainless steel with alloying and processing steps, cold-forging, adding diamond-like carbon layers, etc., not to mention what they are doing with gold. Truly amazing.

I do like this quote from the link:

an Apple object is “manufactured in a way that makes it harder to copy,” Paola Antonelli said. “That’s the genius. It’s not only the formal effect.” When, in 2007, Robert Brunner first saw a MacBook’s “unibody” housing—made, unprecedentedly, out of a milled block of aluminum—it was a “mind-blowing epiphany,” he said. Apple “had decided that this was the experience they wanted, so they went out and bought ten thousand C.N.C. milling machines.”

This is SERIOUS innovation on Apple’s part, although not innovation that most people realize or even think about. But it is manufacturing innovation that, well, enables Apple to make 40% profit when comparable products from other manufacturers make 2% profit. They also make reference to the fact that Apple’s new MacBook will be made without Beryllium, which is in most electronics today and causes cancer. I also like this final quote, and I see Apple really blowing minds with Car when it comes out from a metallurgical perspective:

In a way, molecular chemistry and proprietary manufacturing processes are like Apple’s answer to the way other industries are selling “luxury” goods, like knowing where the leather in your bag was made, or where your produce was grown. Apple wants to sell you its new luxury by invoking provenance—even if that provenance ignores what happens between forging and the unboxing.



One last comment - given Apple’s innovations in manufacturing processes and metallurgy, I do hope they begin to utilize more liquidmetal in their products, as it is a very impressive metal. It is very difficult to work with, but has some benefits that would be interesting to see Apple utilize. For the record, I do own some LQMT stock, which may be swaying my opinions there!!



You know what inspired Apple to CNC??? The beautiful (billion dollar) world of custom wheels. For years before Apple boxes were CNC’d the best lightest wheels on earth were 5 axis CNCd from all kinds of billets.
Hardly cutting edge today. No mention of metal foam? That’s the new buzz. Good points but cars are an entirely different animal and the paradigm from plug-in to semi autonomous to fully autonomous and ultimately not having to own a car anymore is not even being brought up here in Apple-Aid Land. With no factory, no proof of concept, no patents filed for design basically no nothing except hirings and firings - you have to wonder what part of the “new car” revolution do they want to join? They could miss it all by making a plug-in simply because things move fast…. And then there is software. Car software isn’t iOS updated and bug fixed every day; Apple would really have to buy some Tesla/Space X knowledge there - oh I forgot, Elon gives it away free.

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