Apple’s stock is flying high right now, and there’s quite a bit of buzz surrounding the upcoming iPhone 8. Many in the media are predicting monster sales of the redesigned iPhone when it hits in the fall.
But is all of this positive chatter about Apple ignoring the possibility that the company is sliding into the same abyss that Microsoft did when Bill Gates left and Steve Ballmer became CEO?
A writer at Forbes considered the possibility that Tim Cook is leading Apple into a similar situation as the one that Microsoft faced after Ballmer became CEO.
Adam Hurting reports for Forbes:
But today’s Apple, and the Apple emerging for the future, is absolutely not the Apple which brought investors to this dance. That Apple was all about innovation. That Apple identified big trends – specifically mobile – then created products that turned the trend into enormous markets. That Apple new that to create those new markets required an intense devotion to product development, bringing new capabilities to products that opened entirely new markets where needs were previously unmet, and making customers into devotees with really good quality and customer service.
That Apple was built by Steve Jobs. Today’s Apple has been remade by Tim Cook, and it is an entirely different company.
Today all one hears about at Apple is growing the installed base. Maximizing sales of iPhones. And then selling everyone services. Oh yeah, the Apple Watch came out. Sort of flopped. Nobody really seemed to care much. Not nearly as much as they cared about 2 quarters of sales declines in iPhones. And whatever happened to AppleTV? ApplePay? iBeacons? Beats? Weren’t those supposed to be breakthrough innovations to create new markets? Oh well, nobody seems to much care about those things any longer. Attractions around the main event – iPhones!
…that’s the problem with all of these sort of “milk the base” businesses. As the focus shifts to grow the base and add-on sales the company loses site of customer needs. Innovation declines, then evaporates as everything is poured into maximizing returns from the “core” business. Optimization leads to a focus on costs, and price reductions. Arrogance, based on market leadership, emerges and customer service starts to wane. Quality falters, but is not considered as important because sales are so large.
More at Forbes
And it’s not just the writer at Forbes that has noticed some interesting similarities between Ballmer and Cook. Another writer at VentureBeat also expounded on that theme back in October of last year.
Steve Blank reports for VentureBeat:
Cook has now run Apple for five years, long enough for this to be his company rather than Steve Jobs’. The parallel between Gates and Ballmer and Jobs and Cook is eerie. Apple under Cook has doubled its revenues to $200 billion while doubling profit and tripling the amount of cash it has in the bank (now a quarter of trillion dollars). The iPhone continues its annual upgrades of incremental improvements. Yet in five years, the only new thing that managed to get out the door is the Apple Watch. With 115,000 employees, Apple can barely get annual updates out for its laptops and desktop computers.
But the world is about to disrupt Apple in the same way it disrupted Microsoft under Ballmer. Apple brilliantly mastered User Interface and product design to power the iPhone to dominance. But Google and Amazon are betting that the next of wave of computing products will be AI-directed services – machine intelligence driving apps and hardware. Think of Amazon Alexa, Google Home, and Google Assistant directed by voice recognition that’s powered by smart, conversational artificial intelligence – and most of these will be a new class of device scattered around your house, not just on your phone. It’s possible that betting on the phone as the platform for conversational AI may not be the winning hand.
It’s not that Apple doesn’t have exciting things in conversational AI going on in its labs. Heck, Siri was actually first. Apple also has autonomous car projects, AI-based speakers, augmented and virtual reality, etc in its labs. The problem is that a supply chain CEO who lacks a passion for products and has yet to articulate a personal vision of where Apple will go is ill equipped to make the right organizational, business model, and product bets to bring those to market.
More at VentureBeat
Ouch! Who would have thought that we’d ever be comparing Tim Cook to Steve Ballmer? But both writers make a lot of sense because Apple has, in fact, really become “the iPhone company” and it’s now all about leveraging the iPhone to maximize profits from its installed base.
Gone is the vision and passion of Steve Jobs, and instead we have the plodding and tediously boring leadership of Pipeline Tim (who regularly says that Apple has “great things” in its product pipeline but for some reason they never seem to ship to customers).
Apple fiddles while the Mac burns
One clear example of Apple’s shift toward a Ballmer-like focus on the iPhone is how the Mac has languished. The iPhone is Apple’s cash cow in the same way that Windows was Microsoft’s cash cow, and you see the same sort of blind devotion to the iPhone that we saw with Microsoft and Windows. In that sense Tim Cook is definitely following in the footsteps of Steve Ballmer.
I barked about the Mac the other day in a post, here’s a snippet of that in case you missed it:
Apple’s recent attitude and behavior toward its Mac computers has not created confidence among Mac users. The Mac has more or less become a third wheel behind the iPhone and iPad, and the company’s heart has clearly not been in improving its Macs.
The Mac Pro, for example, has not been updated since 2013. The Mac mini has also been languishing, and even the venerable iMac is in need of a hardware refresh.
The end result of this is that Mac users have been left wondering if Apple even cares much about the Mac at this point, given how the iPhone is now the company’s big money maker.
The really dangerous thing for Apple though is that once somebody dumps their Mac, it becomes much easier to also get rid of their iPad and iPhone. It’s the halo effect in reverse, once you dump one Apple product, it gets easier and easier to dump the rest of them too.
Yes, the Mac no longer seems to be a priority for Apple, and that has left some casual and professional users headed for the exits and out of Apple’s ecosystem. These are folks that have often been longtime Mac users, but they are tired of waiting for product updates and have finally begun migrating to Windows computers.
You know that Apple has gone down a bad road when Mac users give up and start abandoning ship. Can you imagine a similar situation happening if Steve Jobs was still the CEO of Apple? Somehow I think updated Macs would be shipping regularly or heads would be rolling at Apple.
Apple’s discontinued products and missed opportunities
It’s not just the Mac that isn’t getting enough attention from Apple’s management team. I haven’t even mentioned that Apple seems to have discontinued its popular AirPort routers and has exited the computer display business too. Apple customers used to be able to buy everything they needed for home computing from Apple, but now that is no longer possible and other company’s products will now be purchased instead.
Not to mention how the Apple TV still can’t display 4K content, despite its competitors being able to do so. Who would buy an Apple TV now when you can buy Amazon’s cheaper but 4K-ready Fire TV instead?
And, as the writer at VentureBeat noted, the company has totally missed the Alexa and Google Home product category. Right now the company offers nothing in the way of a home based speaker assistant while Google and Amazon are walking away with that market. Apple is still bumbling around with Siri the Stupid while Google and Amazon run away with an entirely new product category.
Tim Cook doesn’t seem to realize that his narrow-minded focus on the iPhone (in the same way that Ballmer rigidly focused on Windows and Office) has allowed chinks to appear in Apple’s overall ecosystem. As people buy products from other companies to fill the void left by Apple, it becomes much easier for them to leave Apple’s ecosystem altogether.
Microsoft’s renaissance and Apple’s fading glory
Another thing to consider is how much Microsoft has changed since Ballmer left. Some people are actually excited about Microsoft’s Surface products like the Surface Studio, and Surface Pro 4.
There’s a buzz around Microsoft these days that wasn’t there before, and if you compare that with Apple, it leaves Apple looking pretty lame. Apple has become the tired old fogey, and Microsoft has become the cool upstart company with the hot new products.
I can only imagine what Steve Jobs would say about this if he were still with us. Microsoft becoming cool while Apple comes off as the boring one trick wonder?
Sheesh, how times have changed!
Apple needs some fresh blood at the top
It might be time for some fresh blood at Apple, particularly at the executive level. Most of the current team has been there for a long time, and seems unable to do much besides release tweaked versions of the company’s current products.
But given how much money the company is making, and how high its stock is flying, I doubt anybody on Apple’s board of directors is going to rock the boat anytime soon. Why change horses when the current one is still raking in the cash?
I’m sure Microsoft’s board felt the same way about Steve Ballmer until it didn’t.
Did you miss a post? Check the Eye On Apple home page to get caught up with the latest news, discussions and rumors about Apple.