

Apple will decline after Steve Jobs… - tjr
http://blogs.law.harvard.edu/philg/2011/08/27/apple-will-decline-after-steve-jobs/

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tabbyjabby
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!

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rphlx
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.

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tabbyjabby
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) ...

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anactofgod
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.

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rbanffy
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).

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rphlx
See also: <http://aaplbear.com/>

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

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bjtitus
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.

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rphlx
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.

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

