Monday, October 13, 2014

Why Apple Probably Won't Exist in 50 Years

By Pramod Dibble 
Analyst, Visionary Innovation
Frost & Sullivan

I tried to care about this new iPhone and Apple Watch. I really did. When the first iPod came out, I bought one. When the first all-in-one iMac came out, I bought one. When the first iPhone came out, I went out and, positively dizzy with excitement, I bought one. Now I’m looking at this iPhone 6, and... meh.

Apple did amazing things. Company value increased more than 10-fold over the last decade. They have built what is arguably the best brand presence of any company in any industry, with a rabidly loyal customer base. They purposefully killed off the iPod, a cash cow, because they saw that smartphones were the way of the future. These accomplishments can only be the result of brilliant leadership and exceptional scientists.

The Apple of 2014 is not capable of surpassing these accomplishments. Their earlier behavior was that of a technological pioneer, creating brand new markets and generating value all over the place. But somewhere along the line, they fell behind. Objectively, nothing they have done in this last product launch is disruptive. If you throw out all the clever marketing lingo, they’ve made bigger phones that pair with smart watches. This sounds like a press release from 2012. And sure, the processors are faster and the camera is better, but that is true of every new phone launch; it’s more a function of Moore’s Law than it is an Apple thing.

The nice thing for Apple is that it doesn’t seem to matter. They sold a record breaking 10+ million iPhone 6s this past weekend, and remain fantastically profitable. They have cultivated a customer base so embedded in their exclusive ecosystem that they seem willing to buy the newest iPhone regardless of the side-by-side comparisons. And for the fashion conscious, apparently no statement is complete without the latest and greatest iPhone.

Once upon a time, Apple products were better, especially if you wanted to do some video or audio editing. Their user interface was once the most intuitive and user-friendly that existed. The interoperability of their devices was unmatched. None of this has been true for quite a long time.

But Apple seems content to milk this iPhone cow well into senility, and follow in the footsteps of the tech pioneers of this decade. And who can blame them; Apple has made lots of people very rich, and will continue to do so in the short-term.

But I can’t see it lasting. As is well established, if you’re not actively working to disrupt the landscape, then you’re a sitting duck for someone who is.

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