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0 pointssandworm10110y ago0 comments

>>> Apple has total control over the hardware, total control over third party developers, and $203 billion in cash. What are they doing wrong?

Nothing. And that is the problem. When you are generally speaking doing everything well there is little room for massive improvement. The days of perpetually exponential improvement, and resulting growth, are over. Apple is not a startup. Like Ford, Sony and GE, they now have to settle into the grind of incremental improvements for reasonable returns.

Or they can put their markers down on ever more grandiose schemes. They could branch into transportation by starting an airline, or a robot taxi service, but I doubt shareholders will tolerate such outflows for long. If doing so causes the neglect of the core business (iPhone) shareholders will revolt.

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Animats10y ago

Apple is losing market share to Android. The gravy train may not go on forever. Apple today is in the position of GM in GM's glory days, the wonderful days of powerful V8 engines, HydraMatic transmissions, tailfins, and the "longer, lower, wider" wide-track Pontiac. GM didn't think they needed massive improvement in quality. They were wrong.

Watch this commercial for the 1967 Pontiac GTO.[1] Looks a little like one of Apple's teaser ads from the Jobs era, doesn't it?

[1] https://www.youtube.com/watch?v=tzF_CdKLTP0

nostrademons10y ago

I think that the Apple/Google/Microsoft/IBM quadrifecta perfectly illustrates one of the lesser-known points of The Innovator's Dilemma: customers care about different values in different points of the product's lifecycle, and that leads to differing companies becoming dominant.

When a new product category is introduced, customers primarily care about ease of use and relevance to their lives. Radical vertical integration is usually necessary to achieve this, because any friction in the product's interface is on top of the friction of getting consumers to use a product that they're completely unfamiliar with. Hence, the market is totally dominated by one company that makes everything from the chips to the hardware to the OS to the apps. This is Apple. This is the Apple II in 1976, the Mac in 1985, the iPhone in 2007, the iPad in 2010, and now the Apple Watch in 2015. (It's also Netscape in 1993, Yahoo in 1998, Amazon in the early 2000s, and AWS today.)

As the market matures, more competitors enter. An ecosystem of third-party apps develops. Hardware supplier prices drop as more hardware manufacturers develop expertise and enter the market. Customers start to value compatibility, options, customizability, and adherence to standards over raw ease of use. This is Google now and was Microsoft in the 80s & 90s. This is MS-DOS in 1981, and Windows 3.1 in 1991, and IE5 in 1999, Google Search in 2000, Chrome in 2008, and Android in 2011-present.

Eventually the technology moves up-market. Customers start to care more about security, stability, reliability, and performance. That's Microsoft now and IBM in the 70s & 80s. That's mainframes in the 80s, and MS Office and Win7 now. At this point, the technology is already being disrupted, but the disruptive technology isn't reliable enough for a segment of the market.

Finally, you get to the point where customers care about brand and compatibility with existing installations. This is maintenance work, where the company becomes a consulting outfit to keep all the technologies they invented a generation ago running. That's IBM now.

petra10y ago

This seems like a good description of product maturity process in B2B markets. But consumers are motivated by different things(once products are good enough) - the chief among them is psychological/social value/perception, mostly created via marketing or by being first - and in general pretty hard to disrupt.

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elsurudo10y ago

Thanks, that was a really interesting read. However, like my sibling states, consumer markets are subject to the whims of marketing, which may distort this somewhat.

threeseed10y ago

> Apple is losing market share to Android

Who cares ? They are siphoning profits from the market and selling more phones than they ever have before. They have periphery businesses e.g. Apple Pay, App Store that are doing very well and I am sure more will come in the future. They are never going to be the company that goes for market share above all else.

> Apple today is in the position of GM in GM's glory days

I don't think so. Apple seems to be quite happy just to acquihire their way out of any innovation slump. There are a ridiculous number of companies especially in the VR space that they have acquired that we have seen no evidence of in their problems.

Pretty exciting times ahead I imagine.

st3v3r10y ago

They're losing marketshare in the phone market as a whole, but in the high end, premium market, they're doing quite well. And that's the market where the profit is, not in the low end, free on contract devices.

HillaryBriss10y ago

Fantastic commercial!

"The Great One"

I can almost see Don Draper standing in the shadows behind the car.

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