One has to wonder, out loud if you so dare, what’s going on in the world today? Terrorists groups, although very small in number, wreak havoc on more civilized civilians. 1-percent of the world owns as much wealth as everyone else. Just a few dozen people own as much wealth as half the world (not sure if that means they’re just really, really rich (they are), or a huge swatch of planet earth’s inhabitants are really, really poor (they are).
The leading presidential candidate on the conservative side of the fence speaks at a 4th grade level and has absolutely no plans in place or details to share about how he will accomplish what he intends to do once elected to office. On the other side of the fence is a self-proclaimed progressive drawing robust crowds of young people with promises of free tuition, free health care, more Social Security benefits, and all with no increase in taxes, and not a word how any of that pie-in-the sky bag of empty promises will get through a Republican led congress.
Yep, the world is messed up. So is Apple and AAPL; the former is on every critics ‘doomed’ list, a notable analyst calls the company’s CEO insane, and anyone with a digital soapbox and axe to grind thinks the iPhone is what is causing Apple to fail (someone, please, anyone, check Apple’s bank balance; it’s sure to be empty by now) because it makes the company too dependent upon a single product line.
AAPL may or may not be dethroned by Alphabet’s GOOGL today, but clearly there is a ‘perception vs. reality‘ issue going on here. It is Alphabet that has a single business group that accounts for more than 90-percent of the company’s revenue and profits. Advertising. Compare that reality to the perception that Apple’s success is far too dependent upon the iPhone, even though it represents about 65-percent of the company’s revenue and profits.
Then, back to reality, everything else Apple makes and sells is highly profitable, and many of those could easily become their own Fortune 500 companies. Mac? Half the PC industry’s profits. iPad? Sales are going down because sales went so high but it’s still the biggest tablet seller, and makes more profits than all other tablets put together. iTunes? Big money maker. Apple Stores? Huge money makers. App Stores? Both revenue and profits dwarf all other such online stores put together. Watch? Sales, revenue, and profit sufficient to own the nascent wearable and smartwatch category, and single handedly put a dent in the Swiss watch industry’s universe.
Apple’s numbers are reality. Everything else is perception. Here’s another one.
The much beloved and respected Walt Mossberg tells a glorious tale that Apple’s own apps need work.
I’ve noticed a gradual degradation in the quality and reliability of Apple’s core apps, on both the mobile iOS operating system and its Mac OS X platform. It’s almost as if the tech giant has taken its eye off the ball when it comes to these core software products while it pursues big new dreams, like smartwatches and cars.
On the surface, and at first read, I will agree. It seems as if Apple has too much going on and cannot keep every piece of software in perfect condition. That’s the perception, right? It’s a common perception and you read about how Apple’s Mail, or iTunes, or Photos, or iCloud, or whatever app just isn’t what it used to be. That’s the perception; that Apple is falling down on software.
Where are the numbers?
I’ve been using everything Apple for nearly 20 years and I’ve groaned and complained– sometimes in public– about Apple’s mess here, or the problems there. But there’s nothing of numeric value to point to. If perception is reality, let me reverse the perception here and try to recount the good old days of classic Mac OS? No. Wait. They really were not that good, were they? What about OS X Panther, and OS X Snow Leopard? Far better, right? Except that I have yet to have a single crash, hang-up or freeze with OS X Yosemite or El Capitan; but I did with every other OS X version prior to Mavericks. What about Mail? Honestly, Mail has never been stable beyond six accounts and 10,000 messages. Ever. That explains why there is such a robust third party email app industry on OS X and iOS.
Wait. Isn’t iTunes a monster media mall app in need of a government imposed breakup? Sure. Why not? Politicians decry how big government is ruining everything but they also want to manage my personal reproductive rights. At least, the men do. The only time iTunes was great was when Apple didn’t use it to sell everything. Since then it’s been a mess trying to do everything at the same time and failing too often.
I’m not saying Apple’s OS X or iOS or any of the company’s own applications are the worst. In many cases they’re the best (what’s better, for the money, than Logic Pro X or Final Cut Pro X, or Photos, iMovie, and Garageband?). All of this Apple bashing– and it’s like a 24-hour cable news channel which broadcasts faux news– appears to be far more perception than reality.
The nature of software is bugs. They never, ever go away. Even when an app or OS becomes rock solid steady, it’s not for some, and just what is broken and how often it breaks across hundreds of millions of users is known ONLY by Apple; nobody else, perception be damned.
Think of it this way. If OS X Panther or Snow Leopard were so great, and iOS 5 was the cat’s meow, would you want to go back to either one? Me neither. That’s not a perception. That’s a reality.
AAPL is getting hammered because the iPhone is so successful. That’s a perception. The reality is that everything Apple does of substance makes huge dollars in revenue and profits and that’s not likely to change even if perception does. Last quarter Apple made about as much in profits as Alphabet did in revenue. Investors love risk and growth and sizzle on the steak, but none of those three will carry a company into the future. For that you need revenue and profits and who has more of both than AAPL?
Have you ever wondered why Samsung, Amazon, Google, et al never announce how many smartphones, tablets, or whatever other gadgets they sold in a quarter? Because, compared to Apple’s reality numbers, they would all be embarrassed. Perception vs. reality can be a fun argument but I prefer to live in reality.