Is It Game Over For Apple?
Let me clear some things up -The Apple of My Eye
I love apple. I bought the first MAC 128K and quickly upgraded it to a fat mac 256K when the hack was announced. Yea soldering those chips into place was a pain but 256K WOW!!. When i received the MAC developer guide , i stayed up all night and marveled at the operating system designed. Font Manager, Window Manager - Glorious ;-) I still own the 1st edition MacWorld.This is also not investment advice - god knows don't ask me what to buy and sell.
No Risk No Reward = Disruption
However, i have had concerns about Apple ever since the death of Steve Jobs. We all know Steve was a one of a kind human. A no nonsense, I have a vision and don't stand in my way kind of guy. When it came to putting his ass on the line Steve was never shy. It was not profits first for Steve it was give the consumer what you know they want and profits will come. This unfortunately caused him to get fired from Apple the first time as the big corporate culture (Pepsi) rejected Steve's non conformance to strict big company ideas and principals.Large Corporate Culture Can Corrupt
The corporate wonks at Round 1 Apple couldn't understand it. They could not grasp Steve's Super-Hybrid capabilities to see the future. To them it was about low risk, no failure, bottom line accounting. Stick with what we know don't stray out of the box In the corporate world it is typically about survival and jocking for position . The larger the company the less risk executives are willing to take as failure often leads to career death instead of learning and recovery. Therefore the risk/reward equation doesn't work out. For Steve Jobs, it was all about breaking through the barriers , going where no man had gone before and not being afraid to bruise your knees elbows along the way. In fact, if you remember, the Round 1 Apple was near bankruptcy without Steve.Steve Was Apple and Apple was Steve.
The biggest threat to Apple is Apple. Round 2 Apple became a leader not a follower. And now non Steve Jobs Apple is becoming the follower and not the leader. This is exemplified by finally giving the consumer what they wanted, choice in the size of phone. Apple changed forever with Steve's death and nothing can bring that spark or that fearless, "I don't give a crap, i know i'm right attitude back into apples culture'.Apple is degrading into a play it safe, low risk company. Lets face it Apple can not survive on the Iphone and the margins that Iphone brings. Price points of phones are dropping and will continue to drop into the future (see one plus one).
In fact , I think consumers are not aware today of the total cost of ownership of the IPhone as compared to a One Plus One.
AT&T IPhone 6+ Price = $299 (requires 2 year commitment)
AT&T IPhone 6+ monthly cost = 15
24 Month IPhone 6+ cost = $360
Total cost for IPhone 6+ over 2 years = $659
Purchase One Plus One = $299 (u own the device no commitment)
AT&T Discount for BOYD = $15 / month
Total cost for One Plus One over 2 years = $299
Premium Payment for IPhone+ over One Plus One = $360
So if your a corporation who typically purchases 5,000 phones per year. Your paying a premium of $1.8MM a year for Apple.
No doubt Apple will continue to survive with a $200 billion dollar war chest. But if your looking for innovation, shake the world products. Lets face it the Apple corporate culture just wont support it. It just might turn into the Microsoft innovation follower vs leader. Funny how the world turns where now Microsoft is leading in opening up its platform to Open Source while Apple struggles to find its next IPhone innovation.
Large Corporations Are Not Built To Support Innovation Through Failure
Large/Medium corporate cultures just don't know how to foster innovation through a tolerance of failure. They are quick to dispose of those who take charge and think out of the box because there "Brand" doesn't if the typical executive. Instead of seeing the positive results they focus on the negative. 8 great deliverables and 2 so/so and the 2 so/so deliverables gain more focus.
Apple can revitalize its corporate culture and support the risk taking I know what's best attitude , the Apple we know, the Steve Jobs Apple just may not be around in 5 years..
Post A Comment:
0 comments: