Is the end near for Apple?

November 8, 2012 0 Comments

In the last few days Apple, the most valuable company in the world, is going through turbulent times. From the time of maps debacle both technology journalists and financial analysts started predicting the end of Apple as we have seen in the last few years. And the recent management shakeup didn’t help much to revive the image lost due to maps debacle.  And today Guardian technology journalist Dan Crow article  suggests that Apple is already on a downward spiral path. Though I am not a Apple fanboy in any way I would argue that journalists and financial analysts are just running to the door to get the credit for predicting the doom and gloom of Apple. In my opinion the show  isn’t over yet. Let me elaborate a little more on this before you start to think that I am a Apple fanboy.

The Maps debacle

One of the arguments for Apple fall is that , maps debacle would have never happened under the leadership of Steve Jobs and Tim cook let it happen. I strongly supported Tim Cook’s decision to change maps though it is a big setback in the short-term. see here for more on this. In reality,  maps debacle actually proved one of the biggest strengths of the Apple ecosystem.  First , Tim Cook basically proved that no single app can threaten and hold the Apple ecosystem hostage ,even if the app is from Google.  Second, given the number of application developers for Apple ecosystem, Apple was able to suggest number of alternatives for the maps application.  So in my opinion the whole maps debacle is a trouble but actually helped the Apple in certain way.

Management shakeup

Second, the recent management shakeup. The recent management shakeup which led the departure of Scott Forstall and John Browett, basically proved that Tim Cook is the new boss and the boss can make tough decisions for the future. If Scott Forstall is a “trouble maker” for the rest of the team then he must go. Similarly John Browett wasn’t a good fit for Apple retail. I don’t think he ever understood what makes Apple retail stores different and special. I am actually glad to see him go.  Again, there is positive side to recent management shakeup, which can serve as a stepping stone for future Apple.

Lack of new products

Third, lack of new and innovative products different from the current iPhone and iPod line.  Apple can’t abandon current iPhone and introduce new product that can cannibalize the original products before its time. Every firm should try to get the maximum return for its initial investment and ideally should wait before introducing the next wave of new products. Incremental features are the best way to reap the benefits of the past investment. The drawback of introducing new products at a rapid pace is that the strategy can lead to failures and that is worse than not introducing new products.

Real problems

Now lets turn our attention to some real problems  that can make Apple the next RIM.  First, as long as Apple competes smart phone wars on the basis of hardware specifications Apple is bound to lose the ground to vertically integrated manufacturers like Samsung. Apple should shift the competition of smart phone from hardware specifications to  software.  For example, consider the early search wars between Google and Yahoo. Both Google and Yahoo used to advertise their search index size and then Google actually stopped advertising the index size and started competing on the quality of search results. Similarly, after a certain screen resolution it really doesn’t matter what resolution each tablet has but the quality and quantity of the application using that resolution matters.

Second, slow adoption of Siri, Passbook and iPad in enterprise.  Siri is “search” in disguise and the best way to compete with Google. Passbook is two-sided network that can deliver growth in iPhone adoption as well.  For Apple to survive the competition from Microsoft Surface, which is 100% compatible with office applications,  iPad adoption in enterprise is very critical. Apple better not lose tablets wars similar to desktop.

In short, Apple may be fumbling without the visionary leadership and unparalleled marketing abilities of Steve Jobs but the magic isn’t over yet.  I would still consider the current problems  as growth pains but not more.  I would wait patiently for another year before I make my final call on the fall of the most valuable company in the world.