Few companies have ever experienced the vicious attacks Apple has had to withstand the past year. Not only has the stock dropped from $700 a share to around $400 a share, much of the tech media and the blogosphere have published every meme possible in an obvious attempt to incite readership by smearing the company with crazy notions.
Apple is doomed. Tim Cook should be fired. Android will rule. Microsoft is back and will overtake Apple next year.
While I’m not happy about Apple’s stock buyback program, or any attempt to give away hard earned riches to undeserving shareholders (not to mention Apple’s inability to figure out what to do with money, other than giving it away), it’s difficult to compare the details in the arguments against Apple with actual numbers and come to a conclusion that Apple is doomed, or Cook should be fired, or it’s Mac vs. Windows déjà vu all over again.
The U.S. isn’t necessarily indicative of the rest of the world when it comes to smartphone sales, but something is amiss in the doom meme when the iPhone’s market share actually grows while Android OS smartphone market share shrinks.
The best selling smartphone on Verizon, AT&T, and Sprint is Apple’s iPhone. The numbers are growing and that fact flies in the face of the Apple is doomed meme.
The Yankee Group did research which pointed out the obvious. As the smartphone market matures, there are few new customers, which means customer churn between devices becomes an issue (something cell phone carriers are familiar with). Yankee found that nearly three times as many Android smartphone customers planned to switch than Apple iPhone customers.
Again, the research and numbers refute the headlines and hysteria, and indicate that Apple’s grip on the customer base isn’t likely to be loosened until a competitor can do to Apple what Apple did to the smartphone industry starting in 2007.
So far, that hasn’t happened. Disruptions in maturing products markets don’t happen in rapid succession. Google has changed the course of the smartphone and tablet industry by providing an iOS-like operating system to manufacturers for free, which makes it easier for device makers to compete against Apple’s original disruption.
Again, the numbers don’t support the Apple is doomed meme because only two smartphone and tablet makers are substantially profitable. Apple and Samsung. That fact hasn’t change in a few years and until a competitor does to Apple what Apple did to others, it’s not likely to change.
What about Apple’s slowing growth and reduced margins? Isn’t that indicative of future failure?
Apple’s growth in iPhones and iPads has been enormous in recent years, so a slowing in the growth should be expected. It’s still growing, but just not as fast. What about shrinking gross margins? One thing is sure, relative to the rest of the industry, Apple’s nearly 50-percent gross margins were gross, and should not have been expected to be maintained forever. Now they’re back to the level enjoyed by the Mac and iPod years ago (which also helped Apple’s stock and profitability) and still higher than any other computer, smartphone, or tablet manufacturer.
There just isn’t much to support the storyline that Apple is doomed or Tim Cook should be fired or Android will rule when the emotion is segregated or replaced by numbers and facts.