Apple has hit a slow-down – it’s true. The drop in market share and proposed share buybacks are testament to that; but even without those indicators, we might have cottoned on.
Some are claiming that the innovation behemoth has reached the limit of its own creativity. With the firm’s top designer Jonathan Ive talking about minor revolutions such as making the iPhone operating system ‘flatter’, and making new screens wider, just how game-changing is any new likely to be?
For the past ten years and more, the company has consistently churned out products that were not only revolutionary but also a pleasure to use. For years, ‘Apple’ was a byword for slick, intuitive and ‘cool’ design. And with no ‘revolutionary’ products seemingly in the pipeline, it’s hard to know whether what we’re seeing is really an Icarus-style nosedive.
But consider this: Apple has fallen before. Still within the collective memory both of Apple employees and consumers is the lost decade of the mid-’80s to mid-’90s, which saw the firm lose market share and fans defect worldwide. It made a miraculous and dramatic return to the heady heights after a decade in the doldrums, and there’s no reason why it couldn’t recede a little and make it’s encore yet again.
As for the death of the late hero-leader Steve Jobs, leaders of tech corporations do not often deify fellow executives in the same way that consumers have done with Jobs. CEO Tim Cook’s real business issue – beyond that pressing ‘Next Big Thing’ question – is how to move Apple from a high-growth stock to a stable-dividend stock, just as the company’s stockholder-base has moved from a ‘high-risk, high-growth, high-return’ investor type to one that now wants consistent dividends.
After a long period of surfing the crest of the hype wave, Apple needs to stabilise. It is of course significant that the paper drop in share price is equivalent to Google’s entire business value, but many argue that at its peak, Apple’s shares were insanely overvalued.
Apple is not going to join the Nokia scrapheap any time soon. The company has its stronghold both in focused niche markets (graphic designers, film production) and in narrow consumer-product categories (portable music players, phones and tablet computers). A strategy like this is a commendable one, and the fact that the company cannot sustain amazingly high growth any longer is not necessarily a reflection of its success.
So Steve Jobs is gone, and a fall there has been, but let’s not write Apple off just yet. With the kind of cash it is able to throw at things (even after it has paid its buyback bill, it’ll have about $50bn in the bank) I suspect we will find it knocking around centre-stage for some time to come.
Antony Green is managing director of Connect Advertising and Marketing