Apple

What’s the future of Apple?

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While chatting with a senior advertising professional (the erudite kind, who commands a lot of respect and whom I look up to) today, the issue of Apple & its future came up.

In his view, Apple will go bust.

The reasoning: it is too dependent on one individual (Steve Jobs). He went on to add that Apple turned around recently thanks to the iPod and then the iPhone – both disruptive products. Those products, while not inventing anything new, were not just incrementally better than what existed already but were game-changing in nature. With iPad, the disruption continues, having redefined ‘tablets’ as we knew them. So the reasoning was that, this kind of disruptive product creation cannot be sustained in the long run and products which are only marginally better than competition will be the order of the day. And that will create a serious dent in the brand imagery of Apple, which is always expected to deliver something new. It will be difficult for Apple to re-create this kind of magic after Steve Jobs retires – it all depends on the succession plan.

I would agree with him on one count – expectations from Apple (at least among fans) as compared to other companies are different. Speculation is rife before every product launch on the likely  features. After launch, every aspect is analyzed and lack of an ‘expected’ feature (‘what, no camera on iPad’?) is bemoaned. And then the comparisons with rival products begin. Which becomes for fodder for Apple baiters (Samsung Galaxy Tab has a camera’, ‘the Olivepad can play Flash files’ etc.).

In my view, Steve Jobs’ DNA is Apple’s DNA. His approach to product development and design is unlikely to be abandoned, if one of his current team members takes over the reign later. If an outsider comes in, its a different matter altogether. The risks for Apple, which could severely impact its dominant nature on some categories could be:

Apple’s complacency with regard to certain geographies: today, Apple is too US-centric. The potential for smart phones are in emerging markets like China & India is huge. But Apple has totally ignored India in the past and continues to do so. Nokia ignored the US in the past and is paying the price today. Will Apple go the same way in Asia? With the iPad too, Apple is letting players like Samsung seize the advantage of first movers. Not to mention advantages like after sales service which Apple is poor at in India.

Competition playing catch up: with iPod, competition could never really match the integrated music service (at least in the US) and later the app ecosystem. With iPhone I think the competition has been very nimble – they closed the gap in terms of features and are upping the ante on Apps. With iPad, competition is reacting even faster. So the pressure of ensuring that the gap between them and others is always wide, is  a big pressure on Apple. Not that Apple is taking it easy and showing signs of complacency.

No halo in Asia: the halo of Apple is virtually non-existent in India. So when they keep launching products in a delayed fashion  (in the wake of established competition) or let traders have a field day, they are bound to be seen as expensive me-toos who offer ‘poor value for money’. And in India ‘paisa vasool‘ is a major pre-requisite. We want our gadgets to be filled with all possible features but come at an affordable price.

What, dear reader, do you think of Apple’s future? Especially in India?

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A marketing communications professional with a keen interest in all things advertising. I share creative ads and views on the ad industry here. Views are personal. See Disclaimer for more.

10 Comments

  1. Nice post.Some good points you made:-

    1.Apple is too dependent on Steve jobs ,so much so that it is nothing without him.The news of him taking leave drops share value of apple substantially.Not only he takes care of business he has substantial presence in design too.They can fill his business acumen with Tim cook but there is a huge gap when it comes to innovative thinking like iphone, ipod etc.

    2.Apple looks itself as a niche product which is suitable for developed economies.They never tried to accommodate the needs of common american even.Within last 5 years it picked up heavily in universities and among students,which is now their biggest consumer base.So,to think about apple taking care of needs to Indian people is far fetched idea.Even in America its a quite expensive product away from the reach of many people.Value for money is there but the money involved is too big for Indian middle class.

    • Aashish, on your point No.1, my point was different! Yes, Apple = Steve Jobs now but if the trusted lieutenants carry on his legacy, the company is in safe hands. I believe that the core group who run Apple have a tremendous faith & belief in the 'Apple way' and are likely to run the company the same way SJ would have in the coming years.

      On Apple and developed countries, I agree with you. Apple ignores markets like India and has not invested in any marketing effort to educate the consumer about Apple. So it is seen as a rich man's toy here.

      • To address a couple of key points you or your friend have raised about the lack of certain features available on competitive products yet unavailable on some of the Apple products. Apple and more importantly SJ along with his think tank STRONGLY believe in the well known phrase – "Less is More" philosophy.
        It makes more sense to give people what they would use more and make them use it wisely than to give them Everything under the sun and let them make the choice… Simple reason I think it is a better strategy is because I also believe in another philosophy that SJ once mentioned – "Customers don't really know what they want…".
        Simple examples – 1. In the age of cloud computing, who needs USB ports for flash drives…? 2. With a touch interface that is this crazily accurate, who needs a mouse? 3. Inability to be able to do Facetime on 3G ~ this has a bigger underlying answer than people realize. Apple could have easily allowed a lower quality streaming for Facetime using 3G (Just like youtube videos on iPhone dropping quality when on 3G as compared on wifi). But Apple did not do it, because it would degrade the quality of the EXPERIENCE and also the carrier would BLEED from every single orifice they have…

        As of the statement "Apple will go bust…" ~ I personally don't see that happening unless SJ hands over the reign to another Steve (Ballmer)… 🙂

        Regards,
        Sidharth V.

        • 🙂 Steve (Ballmer)! LOL! Totally agree about the 'less is more' philosophy'. Unfortunately in India, people seek maximum value in everything – be it biscuits or gadgets. They want every damn feature on a mobile phone – but they refuse to believe that having it all may *sometimes* mean doing a little bit of everything. Exact opposite of doing a few important things well. Had written about it earlier here: http://bit.ly/bvfcmP

  2. You've made some fair points. Although the argument about Asia is partly flawed.

    "No halo in Asia: the halo of Apple is virtually non-existent in India"

    There's a lot to Asia beyond India. One look at the splash Apple has been creating in China, Japan, South Korea among other markets and we realize that Apple does have a strong strategy for Asia – just that we don't fit in it.

    I don't want Apple to ignore India but may be they are trying to focus on one big market (China) and do it well instead of trying both India and China and messing them up. May be…

    nj

  3. Interesting article with the twist of Asia/India in the equation. I'd like to share my humble thoughts on the topic – what's the future of Apple?

    First off, to the view point of the "erudite man who opined" – Yes, Apple has traditionally thrived under the leadership of Steve Jobs. In fact, it goes beyond the recent renaissance of Apple with the iPod. The original PC industry bloomed thanks to the vision of Steve, Woz and the original Apple. And yes, Apple did struggle – almost went bankrupt – when Steve Jobs was ousted out of Apple.

    The one thing with the return of Steve Jobs and the success of Apple has been its strong focus in ensuring that it seems to have learned from its mistakes of the past. Yes, Steve Jobs and Apple have their unique style of product development, design and marketing. However, the eco system is going to be large enough that it *can* support multiple business and product models. So, Apple going bust may not happen, and hopefully it does not, but there can easily be many more smartphones, tablets that will rise to the occasion of catering to the needs of the market.

    On the tightly coupled nature of Apple's success and Steve Jobs –

    More than anyone else, Steve Jobs realizes the need for Apple to continue to demonstrate innovation in its chosen areas of business. Succession planning is slowly being shown in Apple.

    For e.g. during the famed Apple events, Steve Jobs is no longer the only one up on stage evangelizing the innovation of the day. The chairs of each division within Apple are showing what they have come up to ensure the success of the product in question.

    The new Apple community – now consists of the original Mac community, but now also the iPhone, iP*d, and other iOS devices community. This ensures that the success of the platform is shared between the company and these people in question who are the lifeblood, creating new apps that make the platform so vibrant.

    That said, this is still no more than 5-10 years into the future. Beyond that, anybody stating anything has a very diminished probability of success. It's fun to ponder, but it is pointless. =)

    P.S. This is the first time I am commenting on your blog. It's great and I have been a fan for the past month or so that I have been following it.

    Thank you.

    — RR

    • Thanks for the comment, RR. The point about Apple expanding the 'community' beyond just the MacBooks & iMacs is a valid one. Also agree about the futility of crystal ball gazing way into future. On a related note, the challenge for Apple will be expanding the 'Apple way' into so many new devices yet retain the 'cult' and make money. In smart phones they already do that – the profitability is far higher than their market share would suggest.

  4. Interesting topic. I agree that Apple 2.0 is looking very different from the first phase. The core of the company hasn't changed, however. Their focus on Customer Experience –> Vertical Integration (HW, SW, Apps) –> Premium Positioning continues and has only got refined since then. (Had the opportunity to sit through a case study (http://hbr.org/product/apple-inc-2008/an/708480-PDF-ENG?N=4294958507%204294958507%20516191&Ntt=apple) analysis of Apple by HBS' Ranjay Gulati.)

    One person at Apple who I think makes as much of a difference as Steve is Jonathan Ive. I am in awe when I listen to him speak in those promo videos of the iPad and the new MBA. The other DRs are also getting visible in public and I have heard from some sources that Steve is now focusing on formalizing the Apple way / culture (see: http://news.cnet.com/8301-13579_3-10073097-37.htm….

    Is their success assured? Of course, not. In the current environment, a top company can be decimated in 3-5 years time if they don't keep up. If it was Microsoft in the first round, it is Google they battle in the current round. But the Apple eco-system and market presence is much wider and deeper than it was when they faced their first crisis. Google may still emerge the larger of the two — in terms of volumes, but we know that Apple's focus is to be better (and I think, by implication, most profitable).

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