Apple : In Depth: The future of Apple: will it be doom or boom?

In Depth: The future of Apple: will it be doom or boom?

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The future of Apple: Doom

Honestly, you'd think Apple was back in the bad days of the early 90s. Analysts left, right and centre are predicting that the company will fall into ruin if it doesn't release its own version of whatever the latest obsession is.

'Knowledgeable' observers revel in telling us that Apple can't make the same innovative products under Tim Cook that it did under Steve Jobs, or that having lower sales figures than cheaper alternatives means imminent collapse. It's just a matter of time, apparently, yet the refrain that 'Apple is doomed' is nearly as old as Apple itself.

Why are there articles full of this kind of thing? Some do it because they don't like Apple's philosophies, some for the attention and some because they believe it, no matter how many times it doesn't come true. Join us, then, in an act of wanton self-flagellation as we pick our way into the steaming pile of bullet-points, half-formed ideas and fundamental misunderstandings to look at just now very much not doomed Apple is…

Baffling with percentages

It's easy to follow percentage figures – they're so nice and clean. For example, figures from market intelligence firm IDC say that the iPad's share of the tablet market was down from 38.2% in Q3 2012 to 33.8% in Q3 2013. What a clear statement. It's definitely bad for Apple, right?

Apple

Indeed, Business Insider's Steve Kovach wrote in his article "Apple is about to blow it in tablets too" (having already 'blown it' in smartphones, of course) that "Samsung is poised to crush Apple in tablets using the same strategy it did to win in smartphones." The strategy in question is "to essentially flood the market with as many different types of tablet as it can", and Kovach believes that the IDC figures show that it's working.

But here's the thing about those IDC iPad percentages: they mean almost nothing. All the companies involved have started making more tablets and sending those to stores, and that's what those figures are based on (not already sold tablets – so they don't represent the total tablet ownership).

Also, they don't even tell you how many of those tablets were actually sold to customers, rather than just languishing on shop shelves. But when of all the other companies combined manufacture more tablets than Apple does, it makes Apple's figures go down, regardless of how well Apple is doing, or how badly the others might be selling. Indeed, it's thought most non-Apple tablets are sold in the very, very cheap category (think £200 or less) as, basically, portable video players, rather than lightweight computers like the iPad.

Let's consider, for a moment, another figure for market share: online usage. Web analytics firm StatCounter announced that 74.5% of worldwide online tablet use that it tracked was from iPads. So the figures for actual use are rather different to those of what may or not have been sold in one quarter, funnily enough.

Blown it

It's the same story with the understanding that Apple has "blown it" with phones – Samsung has indeed sold more phones recently, but sales of iPhones are still growing, just like iPads. Let's look at some usage stats again, this time from marketing company Smart Insights. It says that 59.6% of smartphone web traffic comes from iPhones, with 39% from Android. A different story, and neither it nor the iPad figures above take apps into account, where mobile and tablet users spend a huge amount of their usage time, and Apple is widely out in front on.

Samsung

Really, neither the usage stats nor the sales figures tell the whole story – between phones being passed on as hand-me-downs, cheap phones and tablets being sold but barely used and general confusion in the numbers, the conclusions you can draw are limited. Which is absolutely fine – it just means that you can't really suggest that Apple is struggling from them.

"After a decade of innovation, the company's well has run dry," declared Howard Gold of the Wall Street Journal after Apple's last earnings call. It's a common complaint, and one that's often countered by pointing out that Apple's biggest innovations have come several years apart – it's not fair to demand a game-changer every year.

This is, of course, true, though it is ignoring just how fertile the mid-2000s were for Apple: there was a major new product category or fundamental shift coming every year, from the Mac mini in 2005 though the Intel switch, the iPhone, the Apple TV and finally the MacBook Air in 2008.

Then came the iPad and Retina displays two years later in 2010. Since then, you could argue the iPad mini and Mac Pro are big additions, but largely, Apple has released products that iterate on what's already there. The question is whether more new product categories are what's needed to sustain the company, or whether it can keep growing by improving what's there.

No innovation

Sometimes you feel that there's an air of frustration or impatience behind claims that Apple doesn't innovate any more. Products such as the iPhone and MacBook Air were so exciting when they were introduced – they were barely believable! People want to see that again, and when that comes dressed up as analysis is where things go awry. Does analyst Trip Chowdhry from Global Equities Research seriously believe that Apple "They only have 60 days left to come up with [an iWatch] or they will disappear", as he told CNBC? "It will become a zombie, if they don't come up with an iWatch."

iwatch

Those 60 days ran out 19 May and Apple is still doing pretty well at the moment. Regardless, it really feels like what Chowdhry and others want is for Apple to turn existing ideas (like the watch or TV) into products with iPhone levels of impact. Rene Ritchie of iMore laments that this won't happen: "There isn't a business as big as the iPhone, not for Apple, not for anyone, and there won't be again."

The future of Apple: Boom

Huge opportunity

Hopefully, that isn't true – perhaps a huge opportunity lies outside the computing industry (much like the way Nintendo has announced it will move into health products to expand its business, for example) – but even if it is, it's no harbinger of Apple's doom, because every year, Apple dramatically improves its existing products. There is innovation to be found in battery life, convenience and usability, and ignoring that is what Apple's competitors get wrong. And it's why the company doesn't just throw out any old watch or TV concept and call it a finished products – look at the scathing reviews of Samsung's Gear Fit.

You just have to look at its acquisition of Beats to see that some of its focus is already moving away from rectangular products.

Apple

"I think for Apple, the pressure is to get it right," Carolina Milanesi, of consumer insight firm Kantar WorldPanel, told CNBC. "It's not so much getting in quickly, it's getting in there the right way… It's not in Apple's style to rush things, especially when it's part of the bigger picture." Perhaps that's the real innovation, in an industry that's happy to throw any old product at the wall.

The Steve situation

Articles that berate Apple for its inability to innovate any more often attribute the 'problem' to a common cause: co-founder Steve Jobs is no longer leading the company. "If Jobs was the star, Cook was the stage manager," wrote Yukari Iwatani Kane, author of Haunted Empire, Apple After Steve Jobs. "If Jobs was idealistic, Cook was practical. But without Jobs, Cook had no counterweight to his dogged pragmatism. Who would provide the creative sparks?"

Kane's thoughts here are the latest in a line of accusations that Jobs was responsible for everything good that came out of Apple. "I don't think it's a coincidence that the iPhone 5, the first iPhone to be developed after Steve Jobs's passing, seems to lack a comparable sales pitch [to Siri or a Retina display]," wrote Timothy B Lee for Forbes in 2012, a statement that naïvely suggests that Apple plans no more than a year ahead in its iPhone developments.

"The more responsibility Cook took on in the nuts-and-bolts parts of Apple, the more Jobs was freed up for his creative endeavours. Released from customer service and retail management, Jobs spent the last decade of his life dreaming up the iPod, iPhone and iPad," wrote Adam Lashinsky, author of Inside Apple.

But we know that Steve Jobs was only part of the creation of these devices: famous Apple names such as Tony Fadell, Scott Forstall and of course Jony Ive – never mind hundreds more – played vital roles in making them what they are. Though Jobs no doubt provided a huge amount of direction to the iPhone, elevating his role to that of 'inventor' is a pernicious dismissal of the brilliant work of others.

iPhone

Kane asks who will provide the creative sparks for Apple now, but it seems to be Jony Ive who fits that role, taking responsibility for both software and hardware design now. Like Jobs, it appears that Ive's position is away from the actual running of the company: Craig Federighi manages software engineering, Eddy Cue manages services, Dan Riccio makes the hardware designs work, and Jeff Williams and Tim Cook make all the pieces come together. You can't replace Jobs' spark, but Apple has done the closest thing by making sure his most trusted creative partner has taken up his torch.

Jobs considered Apple his greatest creation, and as long as it continues to hold dear the philosophies that made it great, it will thrive.

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Yahuui Blog

Saturday, June 28, 2014