Is Apple Losing Its Edge?

Whether you love or hate Apple, you can’t deny that the Cupertino-based company changed the consumer electronic landscape with the introduction of such innovative products as the iPod, and certainly put the heeby jeebies up mobile phone manufacturers with its iPhone.

By Mike Wheeler

 

A little over 12 years ago, I was sitting at my desk when the boss came through and said, “you’ll be getting a new computer next week, it’ll be an iMac”. I distinctly remember letting out a whistle of approval. At the time I was working for a publishing house that specialised in children’s education books and one of my contemporaries was not only a huge fan of Apple gear but of Steve Jobs, too.

 

She had told me all about the new iMac and how funky and stylish it was, although functionality wasn’t mentioned. It duly arrived, and while I was impressed with how it looked, I remember being furious and thinking that Steve Jobs was an arrogant so-and-so because there was no floppy disc drive. Apparently they were passé and would soon no longer be needed. Of course he turned out to be right.

 

Not long after, the same work colleague bought the first generation iPod, something that I was instantly jealous of, but which was slightly allayed when she told me the cost (approximately NZ$1000). While it now looks decidedly bulky, at the time it looked brilliant, and when she told me how many music files she could store on it, I was duly impressed.

 

Whether you love or hate Apple, you can’t deny that the Cupertino-based company changed the consumer electronic landscape with the introduction of such innovative products as the aforementioned iPod, and certainly put the heeby jeebies up mobile phone manufacturers with its iPhone. They then added to their aura of being cutting edge by taking elements of a PC and squeezing it into a portable form factor called the iPad.  The company’s share price soared and sales grew exponentially and while fan boys loved the aura of invincibility and cockiness, detractors saw them as arrogant, aloof and dismissive of competition. The company seemed unstoppable. Until now.

 

Since the death of co-founder Steve Jobs in 2011, investors and consumers alike are wondering if Apple has reached its use-by date. The past 18 months hasn’t seen any ‘wow’ factor devices emerge. Sure ,there was the iPad Mini, but outside of that it is just updated iPads, iPhones, iOS plus other bits and pieces, but nothing to make you stop and go “wow!”.

 

A recent poll of investors by financial website Bloomberg showed that 71 percent of respondents thought Apple had lost its innovative edge with 28 percent of that number saying it was permanent. This is unsurprising as the likes of Samsung, Amazon and music streaming services have started taking their part of the pie. It doesn’t help that Apple seems to be suing almost every other tech company over patents, which comes across at best as bullying behaviour, or more worryingly, seemingly on the back foot trying to stop the competition from catching up.

 

But you can’t write the House that Steve Built off just yet. Apple is still one of the most profitable companies out there with an operating revenue of just over US$156 billion in 2012 with a profit of US$41 billion. Hardly something to be sneezed at. What people also tend to forget is that it was four years between the release of the iMac and iPod, six between the iPod and iPhone and another three between the iPhone and iPad, with the last on the list coming out in 2010, just over three years ago. So it’s not like that company was a prestigious creator of cutting edge gear on an annual basis.

 

Some of the nay sayers opinions were brought about by the death of Jobs, who some saw not only as the Talisman of the company, but the soothsayer with a vision that only he could convert into dollars. Yet the ‘cool’ look of the products was down to designer Jonathan Ive, while the nuts and bolts of several Apple devices were drawn from the blood, sweat and tears of engineers like Jon Rubenstein, Michael Duhey and Tony Fadell, Sure, most of these people have moved on, but Apple has always been – in the main – an astute hirer of people.

 

While Jobs was the one getting the kudos – and he certainly deserves that due to his foresight – a company like Apple will survive the undercurrent of negativity that’s set in.  Where the problem lies is that sometimes perception becomes fact, and the only way Apple will get around that is by producing yet another jaw-dropping device that nobody has thought of, and keeping other tech companies in catch-up mode – something it has failed to do in the past 18 months.

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