Apple showing vulnerability year after Jobs' death

Apple showing vulnerability year after Jobs' death

Summary: Sales have not been affected but brand loyalty can only keep the company at the top for the short term, unless it comes up with "dramatic improvements" in products.

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One year after the death of Apple co-founder Steve Jobs, the firm's sales are still going strong. However, observers noted that its launch events have been duller since and it needs to work on "dramatic improvements" in its future products to keep it brand loyalty.

Jobs passed away on October 5, 2011 from pancreatic cancer. Just prior to his death, he had resigned from his role as CEO in August 2011, passing on his responsibility to current Apple CEO Tim Cook.

Naveen Mishra, industry principal for ICT practice in Asia-Pacific at Frost & Sullivan, said the sale of most of Apple products, except iPods, have been "quite strong" over the last three quarters since Jobs' death. The decline in iPod sales started in last few years due to the popularity of iPhones and iPads, he explained, adding that desktop has seen a little softening in sales.

apple-sales
Credit: Frost & Sullivan

Many factors affecting market share

Shalini Verma, principal analyst at Gartner, noted that Apple's sales have not been affected by Jobs' death.

However, its market share in smartphones has been affected by factors such as the launch dates of its iPhone and "strong" competition from Samsung.

Verma explained Apple's global market share for smartphones rose from 15 percent in the third quarter of 2011 to 23 percent in the fourth quarter of 2011, because of the launch of iPhone 4S in October 2011. Similarly, Apple's market share fell in Q2 2012 because consumers were waiting for iPhone 5, she added.

"Steve Jobs' death has not been a big factor in the company’s sales so far because he was involved in the development of both the iPhone 4S and the iPhone 5," said Verma.

Mishra noted that while Apple has not announced its fourth-quarter results for 2012, the analyst firm expects the technology giant to cross another milestone of US$150 billion in annual revenue, after pulling in US$35 billion in the last quarter.

"Such strong performance comes from Apple's ability to bring innovative devices and tightly integrated ecosystem of applications and services," he added.

Apple's stock price has risen more than 70 percent from last year, hitting a new high when it breached the US$700 a share mark last month, further cementing its place as the most valuable company on the planet.

Apple launches dull without Jobs

While Apple's products are still selling well, Verma said the absence of Jobs meant that Apple's launch events were no longer "spectacular." This tends to impact the perception of the company among "technology enthusiasts" who will influence consumers' buying behavior over time, she said.

Singapore-based iOS app developer Kevin Chan agreed. "Apple has lost [Steve Jobs's] showmanship. The dude was a great storyteller, and his reality distortion field and 'one more thing' made his product launches really special. [Tim Cook's] launches don't even come close," he added.

Mishra added that while each new Apple product was better than its predecessors, the "wow" factor seems to be missing in the last few product launches.

Apple must continue cultivating brand loyalty

Apple will need to offer "dramatic improvements" in its products to keep brand loyalty, especially in an industry "characterized by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of technological and product advancements and price sensitivity", the Frost & Sullivan industry principal said.

"Apple has come to be associated with excellence in design and simplicity in user experience because of this consistency over time. This is a potent combination that has made Apple the most valuable technology company today," Verma explained.

When market momentum is with a company, it can ride the momentum despite minimal innovation. This is the power of perception," she said.

However, no company is invincible, Verma pointed out, adding unless Apple maintained the same level of consistency in the years to come, brand loyalty will go elsewhere.

'Vulnerable' without Jobs

Content producer Jeanne Wong said Apple seems to be "very vulnerable" without Jobs. "It's like all the other companies become bolder to attack Apple," she said, pointing to the Apple-Samsung legal war which was "brewing before but is now a full-on battle".

Wong added that the quality of Apple products seem to have dropped since iPhone 4S and "iPhone 5 just sounded terrible".

"Previously with Jobs, you won't hear such bad malfunctions going on like Maps. Jobs always had really strict quality control and now that seems to be missing," she said.

"People are still buying because the fever is still on but with competitors stepping up, Apple is going to need to buck up. How can they launch products when there are so many kinks to iron out?" Wong added.

Singapore-based designer Max Yam believes with Jobs' passing, the beauty of combining art and technology has been lost. He added that the power of using tech product design to move people is diminishing.

Yam said: "Apple is rejoining the league of technology giants and the IT industry has lost perhaps its only human touch."

"I'm not a hardcore fan of Apple so I hope to see the return of the human touch and the artistic feel of products in the technology world, be it Nokia, Microsoft, Google, or even Dell," he said.

Topics: Apple, iOS, iPhone, iPad, Tech Industry

Liau Yun Qing

About Liau Yun Qing

The only journalist in the team without a Western name, Yun Qing hails from the mountainy Malaysian state, Sabah. She currently covers the hardware and networking beats, as well as everything else that falls into her lap, at ZDNet Asia. Her RSS feed includes tech news sites and most of the Cheezburger network. She is also a cheapskate masquerading as a group-buying addict.

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156 comments
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  • Correction

    "The late Jobs passed away on Oct. 5, 2012 from pancreatic cancer."

    Might wanna read that again and check the date Liau.
    Bioxide
    • Re: Bioxide

      Thanks for that!
      liauyq-0671b
    • That's Ms Liau To You

      Liau is her family name, not her given name.
      ldo17
    • Checking facts? Nah!

      Why should Liau bother checking her facts now? I love these disingenuous web baiting articles about Apple. Come back when there is something genuinely happening to report. Too many of these idiot tech writers want to be the first to write Apple's epitaph. You may be right in 50 years but let's give it a rest until then.
      pgentry53
      • ...

        50 years is too long, we can't wait!
        kikax
      • Of course,

        You're fact checking from the ZDNet Asia perspective, right? I mean, the perspective in Malaysia is probably a little different than in the US, right?
        benched42
      • RE: Checking facts? Nah!

        @pgentry53

        Where do you come off lecturing others on checking facts when you obviously do not?

        But then again, iFollowers only have hope and wishes on their mind.

        Well get this Universal Law Fact: Whatever goes up, must come down.

        You hope it will take 50 years, but in 18 months, a lot of things can happen.

        Such as Samsung getting annoyed at Apple's hypocrisy and cutting them off any essential Samsung component such as all of Apple's CPUs, A4, A5, A5X and A6.

        Since the iPhone represent over 70% of the valuation of Apple, what would happen then?

        Stock markets are fickle in nature. They do not care about history, only futures.

        So within 18 months of this potentially fateful event happening (I didn't say it will, just that it could) the meteoric rise in Apple's market cap will vanish faster than you can sell your stocks.

        Such is life under the chaos theory.
        iTard
        • Reality check

          Isn't it that those CPUs are in fact Apple's design and part numbers? Isn't it that Samsung is merely stamping them in silicon, something that about any other factory could do?

          But, your advice is good. Samsung should try to cut off Apple from it's manufacturing. Just as they did attempt to sue Apple over FRAND in Europe (and risk 10% of their revenue).

          They say, smart people learn from the errors of others, normal people learn from their own mistakes but idiots don't learn. Ever.
          danbi
          • Nice one..

            danbi, I think thats what iTard meant about Apple's CPU's... well at least that's how i took it, me knowing apple owns the design and Samsung just presses them. I could be wrong and iTard thought otherwise.

            Either way, I would hope Samsung do that but don't see it really happening as that would be a pretty nice contract/money lose for samsung. I also don't see apple going to anyone else for quality purpose. Just think if it did happen and a different company were pressing the chips for apple, I'm willing to bet those chips will indeed be in apple knock-off product and/or have high defect rates. Sure the compound is the same but some companies skimp on quality to save bucks. Just imagine.

            Just my thoughts.
            Free Webapps
          • You might not realize this but

            Samsung isn't the only option when it comes to quality fab. Would it be a speed bump for Apple sure but I suspect that most people (IE Haters) that are calling for Samsung to stop producing for Apple don't realize Apple owns the designs and only contracts Samsung for the fab.
            non-biased
    • Makes sense to me...

      "The late" Jobs passed away Oct. 5.... The "regular" Jobs died a while back, but this one was waiting to get his iphone 5 before "passing away". He needed the maps...
      garyleroy@...
  • idol speculation

    ((( "One year later after the death of co-founder Steve Jobs, Apple's sales are still going strong." )))

    I could go point by point refuting the idle speculation of people who don't understand Apple or Steve Jobs, but the first sentence pretty much negates the rest of the article all by itself. Just for good measure, though:

    "Apple's stock price has risen more than 70 percent from last year, hitting a new high when it breached the US$700 mark last month and cementing its place further as the most valuable company on the planet."
    buddhistMonkey
    • This is exactly what happened last time.

      Sculley got Apple rolling and profitable but, they rode the company into the ground. Eventually people refused to pay the premium for Apple products and sales slipped way down.

      Google has been way more aggressive about challenging Apple everywhere, than IBM ever was. And now it looks like their Tablets are taking hold as well.

      In short, she is right, they need to right this ship or risk losing everything they have worked for period.
      slickjim
      • Checked my calendar and, yep,

        It's time for another Apple is DOOOOOOMED!!! Story.
        baggins_z
        • Huh?

          I don't see where she is saying Apple is doomed, I see that she is saying Apple must be careful not to be doomed. And, yes, she is right, Apple is vulnerable, but not necessarily doomed. That all depends on the decisions they make.
          cmwade1977
          • Oh, please, don't insult my intelligence

            Apple is experience high double-digit growth in ALL its product lines except the iPod (which is fully expected). Even hinting that Apple must now be careful when ALL the facts show a company firing on all cylinders is absolutely an Apple is doomed story.
            baggins_z
          • double-digit growth **

            ** past performance is not an indication of future performance

            you may have seen these kind of footnotes in prospectus documents that highlight performance figures.
            warboat
          • So we might as well be talking about

            the collapse of Google and Android then as well right? Android has performed incredibly well the past few years but past performance is not an indication of future performance right?
            non-biased
          • we have people for that

            Jason Perlow specialises in that area at zdnet.
            He is the leading authority on Android's doom.
            warboat
      • Where are their tablets

        taking hold? Kindle? If its Kindle exactly how is Google profiting from this? The Kindle uses the FREE version of Android, not Google apps or branding.

        Are you talking about that tablet they released this summer....what was it called....Nexus 6? 7?
        JeveSobs