Apple having an 'identity crisis', claims analyst
Summary: Apple is finding itself having to defend the iPhone and iPad market share against stiff competition from the likes of Samsung and Google. But this is uncharted territory for Apple, and as yet it's unclear whether playing defense is in the company's DNA.
The growth that Apple has seen over the past decade has been nothing short of miraculous. Starting with the iPod, the company has gone from strength to strength, disrupting market after market. But now, the Cupertino, California, giant is finding itself in unfamiliar territory: Having to defend market share.
UBS analyst Steve Milunovich sent a note out to clients titled "Identity Crisis: Can Apple Play Defense?" in which he examined how things have changed at Apple.
"Apple historically has played the role of underdog, beginning with its niche Mac status after losing out to Windows," explained Milunovich. "The iPhone and iPad are the first times Apple has had a leadership position drawing significant and competent competition."
Apple dodged such competition as far as the iPod was concerned, a class of product that remained dominant until sales were cannibalized by the rip-roaring success of the iPhone. However, given how incredibly profitable post-PC devices such as the iPhone and iPad are to Apple, Tim Cook's hardly in a position to be able to sit back and allow the likes of Samsung and Google to run rings around him.
But can Apple play the defensive game? Milunovich's not too sure.
See also: 'iWatch' could 'be a $6 billion opportunity for Apple', says analyst
"It doesn't appear to be in Apple's DNA to cover market spaces just to get revenue," continued Milunovich. "Yet now that the company is so large due to iPhone success, investors are clamoring for product expansion with larger as well as lower-priced phones with Android gaining favor."
Problem is, investors and pundits are clamoring for Apple to either come out with products in cut-throat markets, such as TVs, cheap products, in particular a cheaper iPhone, or copycat products, such as an iPhone with a larger screen.
Milunovich concluded by pointing out that the engineers and designers at Apple may have to put their thinking caps on and start getting creative. But Milunovich cautioned against expecting too much, too soon from Apple.
"The only way out might be innovation in new categories, which will require investor patience. Most companies would rush out a 5- to 6-inch phone; Apple probably won't."
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Talkback
Many companies do.
Nobody can borrow others' designs 24/7.
Nobody can even patent to prevent competition from forming 24/7.
You cannot wake up one morning and go "*ding*, I am going to be creative!" Real life does not work like that, otherwise all Americans between 1776 and 1990 would have - every single one - be the example of which modern Americans are not, because modern Americans are all said to be "indolent", "incapable", "lazy", "stupid", "uneducated", "this", " that", "the other thing", etc... and all as spin to get around the true issues - of which there is an irony since some people can't seem to figure out the larger issues... the macroeconomics, if you will...(which are compounded by the very technology used to render various things, including the need to do even rudimentary math, obsolete or moot or pointless...)
The pace of innovation is not the point.
For me the first sign of trouble at Apple was when Tim Cook let the iPad 3 out the door when it was thicker and heavier than iPad 2. It was a "good enough" design concession that was based on nothing that put Apple where it is today.
Correction: their strategy work*ed*
Without the charisma and magician-like showmanship of Steve Jobs, they're no longer able to convince everyone of a reality that simply doesn't exist - that they're this amazing company of unmatched creative and innovative genius. It has become clear that they're a one-trick-company.
They took the original iPod (which itself was a very latecomer to the MP3 music player market) and:
-Made them in different shapes, colors and sizes.
-Made one that combined a cell phone (the iPhone)
-Made the cell phone version without the cell phone (the iPod Touch)
-Made a bigger version (the iPad)
-Made a not quite so bigger version (the iPad Mini)
-Made the cell phone version with a bigger screen
-Are presumably making a micro version (iWatch)
When you look back over the past decade, they've basically made one product, added a feature here, removed a feature there, and repackaged it over and over again in different sizes, shapes and colors. There's been plenty of success to be sure, but little to no true innovation.
And now, the whole iDevice concept seems to be running it's course. An Apple Television has been rumored for years, yet hasn't come to fruition and, even if it does, will surly be little more than a super-sized iPad. The latest speculation if an iWatch is presumably little more than a shrunk down iPhone.
Apple's problem is simple - they've built their company around this image of creativity and innovation, and now don't seem to be able to live up to their own hype.
The next hill for Apple.
Firstly, iPod, came in at a great point in the rise of mp3’s provided massive amounts of storage and an intuitive design in a nice looking package and blew the competition away. They took the product of an mp3 player seriously and it paid off in massive sales.
But the standard mp3 player market died off to a large degree, but that didn’t hurt Apple because Apple was already thinking hard about things and they had already created the iPod touch and it was pretty obvious to them that a reworked iPod touch could be turned into an amazing touch screen smartphone. This is perhaps the only truly innovative really brilliant idea Apple had. But brilliant it was. The reason for the downturn in mp3 players was the advent of smartphones that could play mp3’s and Apple was on top of it and the touch screen phone idea was ground breaking in itself. It made the idea of a smartphone truly into a computer phone. They took the smartphone market by storm and in the process a huge part of the cannibalization of the mp3 player market went to Apple themselves because they had the newest brightest mp3 playing smartphone.
Simply brilliant. Multi more millions of units sold.
Then came the iPad. The iPad created its own market. Like it or not massive amounts of sales of the iPad were made not because everyone already had a tablet and was looking for a new better one, they bought the ipad because Apple made it, Apple pushed it as the new greatest thing and said it was like magic. People bought so many of them it literally created a new market where there really wasn’t one before. Nothing was particularly brilliant in itself, an iPad being not a whole lot more than a gigantic iPhone, but the marketing was brilliant now everyone thinks they need one. It was also perfect timing because people had practically stopped buying desktop computers and laptop sales had slowed because nobodys PC’s were breaking down and wearing out like they used to. Unfortunately whatever planned obsolescence Microsoft and the OEM’s once had in the PC market started to vanish in and around the time of Vista appearing so millions of people had cash to blow on a new toy by time the iPad came into existence.
But unlike the cannibalized mp3 player market, the smartphone market was thriving and touch screen competition started prying its way into the smartphone market, and the same competition was rapidly putting their minds to the tablet market so competition was starting to move in there as well.
The issue being, as well as Apple has done, it came out of the creation of the iPod touch which was transformed into the iPhone then the iPad. Others have caught on to the importance of touch screen. The competition has arrived and its only going to get worse for Apple.
Apple may have had a good run here, an enormously fantastic run to be sure, but it was nothing more than one cleverly executed run off of one very clever product, the iPod touch. Then ad a phone, then make it bigger. One product one idea. Lots of competition.
In this kind of scenario you cant stay at the lofty heights Apple raced to for very long.
Unless Apple comes out with some truly new second invention of the innovative thinking of the iPod touch they are stuck and will slowly but surely slide for some significant degree to a point of stabilization. And it should still be a good place to be.
But one thing for sure, they cant stay anything close to the lofty heights they were at forever on just one invention unless they had a way to create a monopoly.
And that they do not have.
Apple beyond its heydays
Apple had the run of its lifetime and will ultimately shrink and become a "normal" company. It's only a matter of time when Apple will have to lower prices due to excessive competition. Up to now Apple fanatics belong to the most price insensitive customers of electronic goods ever. But inevitably this group will shrink.
Windows and Office are the ultimate success story
Windows and Office were able to maintain 90%+ marketshare for decades while the competition tried, and failed, to put out anything better.
Kudos to Microsoft for being the one with the ultimate success story, unprecedented, and also unrepeatable.
apple? They just copied what everyone else was doing. Touchscreen phones existed before the iphone. MP3 players existed before the ipod. Tablets existed before the ipad. apple is a marketing company and perhaps has seen unprecedented success for a marketing company.
Really? Prove it with figures
Microsoft is failing in the mobile market where Android and Apple are dominating.
Get a grip you delusional buffoon.
Actually
Just curious
If the computer market is now matured to the point that most people already have one that suits their needs, I'm not quite sure how market share is expected to "explode". There is a reason Geek Squad and other similar services exist- the average person doesn't feel comfortable doing "advanced" tasks. Now with a store built into Windows 8, I think you'll see similar numbers of people upgrading from incremental update to incremental update because the process is akin to buying an app. That said, I don't think you'll see many more people upgrading old hardware to Windows 8 unless it comes in the form of buying a new system. And as it's already been well documented, the computer market isn't exactly "booming" nor growing despite still selling millions of devices.
The reality is we don't live in a time now where technology is growing by leaps and bounds and requires constant upgrades. For the most part, a system running 4 year old Vista could run months old Windows 8. Many people have systems with XP that can handle 8, too. Outside of smartphones in American (and other places with contracts/subsidies), people don't just trash their phone, computer, laptop, etc. every two years. Sure, many of the people that read this website probably do, but we're like the 1%. What's the most popular version of Android right now? 2.3.x. Well, I guess that means Ice Cream Sandwich and Jelly Bean are downright failures, too. 2.3.x still holds more than all over 4.x combined. And yet, I'm not about to argue that is an accurate statement, because it isn't. You have to look at the big picture and see that the places with the largest growth are still using phones with 2.3.x and places that are growing at a slower rate than two years ago are the big reasons you see the double digit percentages in 4.1, 4.2... but these are also devices that are getting replaced every two years. How old is your neighbors computer?
I love how people compare two operating systems on the grounds that they are from the same company while ignoring all the other factors. Let's see market share numbers after April 2014 when XP is no longer supported by Microsoft. I'm not saying Windows 8 is currently a success nor a failure, rather, I think that upgrade cycles have grown larger to be closer to the lifespan of an OS. Heck, I have a Centrino laptop that will never see an upgrade despite being capable of it.
It must be doing something right though if it's already beating OS X 10.8.
Bingo.
Give the man a cigar.
baffon is cloggedbottom
It's good to know all the Microsoft fanboys have banded together
@SSaha - now who is the real buffoon?
When you judge another, you do not define them, you define yourself.
~ Wayne Dyer, American motivational Speaker and Author
Have to agree with that statement.
Apple is the ultimate success story
Microsoft? They just copied what everyone else was doing. Word processors existed before Microsoft Word. Spreadsheets existed before Excel. Presentation software existed before Powerpoint. And Windows was always just the poor-man's copy of the Macintosh. Microsoft is a marketing company, and perhaps has seen unprecedented success for a marketing company.
In all fairness, don't you points also apply to Apple?
Why Todbottom had to drag microsoft into this is beyond me. It adds nothing to the discussion and even if Apple closed doors tomorrow it has been a massive success.
Apple, Windows and Office were successful for the same reason
Apple was helped by the fact that they had Steve Jobs who decided what Apple were going to make and then used his incredible skill in salesmanship to create a market for it.
With Jobs gone, all Apple can do is try to follow the market. Something which, historically, they've been proven to be incredibly bad at. It's not hard to see Apple long term drifting back towards the company barely keeping its head above water like in the days before the iPod.
Poor man's copy of Macintosh
Everybody copies everybody. Get used to it - nobody really innovates.
Microsoft is a marketing company? Pot, Kettle, anybody?
IMNSHO:
Microsoft moved forward because they allowed competition in the hardware. Simple. You could run their operating system on something you built yourself, or expensive IBM hardware. Everybody got to join in.
Apple means Apple. Apple guts of hardware, Apple operating system. Can't afford our box? Can't have it. Unlike grabbing that cheap Matrox Millenium video card at a swap meet so you can enhance your gaming on your Clone IBM PC.
With the rise of iPod etc. we have Apple iTunes, Apple app store. "Lock it in Eddie". Everything locked to Apple.
THAT'S why Microsoft has done so well in my opinion.
HOWEVER, I will admit with Windows 8, if they're going to eventually force us out of the Win32/64 era, where we could do what we want, to the Modern UI/Windows Store era, we will lose that freedom. At that stage I'm not sure Microsoft will do so well to be honest.
Just a point of information:
Case in point: Xerox had no menu bar (that's an Apple innovation), and used a right mouse click (you know, the one Apple didn't have) to bring up a pop up menu.
To correct the Apple FUD
Thus the Menu Bar that's supposedly an Apple innovation, really isn't and never was original.
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There is nothing new under the sun, but there are lots of old things we don't know.
~ Ambrose Bierce