Apple will decline after Steve Jobs… | Hacker News Reader

Apple will decline after Steve Jobs…

blogs.law.harvard.edu

17 pointstjr9 comments

This article is so astoundingly empty of any real logic that I am truly shocked that it's currently on the front page.

He claims that Apple's rise was fuelled by early adopters who forked over large sums of cash for the privilege of being able to posses the newest shiny bauble from Apple, but that their gadget lust has now been sated, thus spelling a near certain end to Apple's incredible growth. Does he realize that the very same people who paid to have the original iPhone have also probably put down money to have later iterations of the phone? The truth is that more and more people are now seeing the benefits of smartphones and are willing to invest more money in a mobile phone with more capabilities. This argument is completely bullocks!

Even if you are entirely correct, you've only addressed 1/4th of Greenspun's argument. Can Apple also:

a) Transition effectively to emerging markets

b) Find more industries willing to give them a 30% cut

c) Provide a compelling return to investors, despite stock option dilution, and an inevitably slowing growth rate

Disclosure: Short, hedging for USD inflation.

a) Apple is rumoured to be working on a low-cost iPhone for developing markets. Greenspun provides absolutely no evidence to support his claim that Apple cannot, except to say that emerging markets are becoming more important. If we use China as an example, desire for Apple products is absolutely booming there (see the profusion of fake Apple stores that Chinese consumers flock to.) I'd adopt a wait-and-see approach here, but Greenspun has said absolutely nothing.

b) Do you think their core profit centre is the iTunes Store? Because it's not. They make their money on iPhones, iPads, iPods, and Macs. This point is really dumb because even if it were true it has absolutely no bearing on the company's bottom line.

c) ...

This analysis is astonishingly shoddy, for all the reasons that tabbyjabby pointed out and more. But worse, it doesn’t even get close to the root-cause for why Apple may decline in the post-Steve Jobs’ era.

Steve Jobs' greatest accomplishments are not Apple I, Apple II, Mac, iPod, iTunes, iPhone or iPad. It's Apple, itself.

Depending on how one tallies, Apple has been through three successful major technology and business transitions, combined with three minor ones within the Mac family, and two minor ones within the iOS family: Apple II > Mac [Mac (68K) > Mac (PowerPC) > Mac (OS X)] > Mac (Intel)] > handhelds [iPod > iTouch(iOS) > iPhone (iOS) > iPad (iOS)]. Combine that with the development of new business/sales platforms (virtual Apple Store, physical Apple Stores, iTunes, App Store, etc.) that enhance the consumers’ Apple experience. Each one of these required the insight to recognize a particular opportunity (and the discipline to ignore others), the investment of resources to develop those opportunities, and wherewithal to follow through on the execution, even if that means cannibalizing from the sales of incumbent products. Without these pivots, Apple would not be in dominating position it is in today.

Consider that companies with longevity are able to execute strategic pivots when required. IBM is an example of a tech company that has done so at least four times over its long, 100+ year old history. Apple has done three within 30 years.

What is the one link between the major initiatives? They all occurred while Steve Jobs was in a position where he could significantly influence Apple. It is interesting to note that two significant new Apple tech platforms that failed - the Apple III and Newton - and the one significant new Apple business platform that failed - licensing Mac clones - were not initiatives that Jobs was affiliated with. (Before moving on, let’s acknowledge that the Lisa failed under Jobs’ purview, and that the 68K > PowerPC transition was successful carried out during his absence,)

We see how Apple's success if predicated on an ability to pivot to address new opportunities in the market, even if those opportunities cannibalize an existing profit center. Jobs’ value to Apple extends beyond being a visionary, design auteur, or talented business negotiator. None of those things would have meaning if he didn’t also have the force of personality and strength of credibility to compel dramatic changes within Apple.

So, then, the question becomes, who can fill in for Jobs in this capacity? If no one can, Apple is very likely to decline, much as Sony has in the post-Morita era.

The path to II to Mac is not nearly as clear as you imply. Apple really lost a ton of momentum with the III and Lisa and that helped solidify the IBM PC and their clones as the de-facto standard (which we suffer until today - imagine there is an ISA bus and a 8042 keyboard controller buried somewhere inside your Macbook).

See also: http://aaplbear.com/

"As a company grows, it becomes harder to provide high % returns to investors."

This is incredibly short sighted. One of the key issues here is with the iPad. The notion that iPad sales will cannibalize Apple computer sales. This will surely be the case whenever people are no longer buying laptops and a tablet can fulfill their every need. Although none of this has been observed yet. People are NOT replacing their computers with tablets and I don't see that shift happening for at least another 3-5 years. Apple is clearly gearing up for another push into mobile computers with the Macbook Air (it is quickly becoming the "next generation" laptop and will help to boost laptop sales).

Let's say this idea that tablets are replacing laptops is true; then you need to look at market share values. Apple has said time and time again on earnings calls that iPad sales are not so much cannibalizing their own computer sales as stealing market share from competitors. The PC market is much larger than Apple's share and the iPad is priced much more in line with low end PCs than higher end Apple laptops.

TLDR; Assuming tablets do replace laptops for a significant number of people (which I refute). More people are replacing their low end PCs with iPads than their higher end Mac laptops.

I agree on this point, but I think the overall argument -- that Apple will have a very hard time growing 30% a year in 2-3 years -- is pretty solid.

Not if Tim Cook continue to wear those jeans and turtle necks.

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