Are Apple’s Struggles Jobs related?
Apple just suffered its first disappointing quarter in the market equivalent of forever. Sluggish iPhone sales have investors raising eyebrows at the chicest consumer tech company in the biz. How bad has it gotten at Apple? Well, the first sales decline in 13 years motivated a massive selloff that dropped the company’s market value by roughly $43 billion. Yes, with a “B”. Some are saying it’s just a market readjusting, but most are saying the problem at Apple is structural. The company has become too dependent on its consumer electronics, which they can’t keep selling to the same people over and over again for the rest of forever and expect to maintain growth. That was something Steve Jobs understood. Contrary to much established economic “wisdom” Jobs made a habit of launching products that actually undercut or competed in the same market as his previous products, but were different enough to get consumers excited. Think about it: While iPods were selling like crazy, Apple launched the Nano, which all but wiped out any consumer reason to buy the Mini. Then, while iPods were still selling like hotcakes, Apple debuted the iPhone, which combined cellphones, computers and iPods. People didn’t need iPods anymore. Then came the iPad, which borrowed customers from both the laptop and iPod market. This trend continued up till recently. When the iPhone 6 was released, a lot of folks went out and bought one. But you know what else is still selling? The iPhone 5 … and it’s selling in huge numbers.
There’s a difference in philosophy at the top of Apple. Tim Cook isn’t inventing new products, keeping them fresh in spite of others still selling well. He’s been focused on new and emerging markets – places where other smartphone companies already have a foothold. Meanwhile, Apple’s “new” stuff really isn’t all that new. Bigger, smaller, wider, flatter – but not new. Nothing really exciting, just a few tweaks here and there. That change in management philosophy – or failure to maintain a successful management philosophy – has undoubtedly contributed to Apple’s current woes. They’re still one of the biggest dogs on the block, but they got there by being new, exciting and innovating. If they don’t find that drive again, they will soon be lost in the pack. David Firester is an intelligence analysis expert in New York.