Has Apple peaked? The stock price would indicate that Wall Street thinks AAPL’s best days are in the past. For the sake of argument, let’s say the company has achieved ‘Peak Apple.’ That means there’s no more revenue growth, no more profit growth, and nothing worth mentioning in the product pipeline that will excite the masses and provide 20-percent year-over-year growth again. Ever.
If the rest of Apple’s life is anything like the peak quarter at the end of last year, then Apple will remain a strong influence in the technology sector and continue to roll up the tens of billions in profits each year.
That war chest, although huge now, could become massive because Apple would have no need to provide investors with a dividend or buy back stock. Why? If AAPL is flatlined why bother to spend money to keep it that way?
Every company faces their own ‘Peak Apple’ event, that threshold which means growth and diversity are no longer part of the quarterly financial mix. It happened to IBM. It happened to Microsoft. It happens.
What can Apple do to overcome ‘Peak Apple?’
Any company that grows from nearly nothing to $10-billion in revenue and is highly profitable quickly becomes a Wall Street darling. Apple’s revenue exceeds $200-billion so even a modest 5-percent growth becomes a measly $10-billion increase in revenue. If all the product lines flatten Apple could still achieve that growth in services, accessories, media, and retail stores but Wall Street wouldn’t blink and eye because, you know, growth. It’s hard to move the needle of a $200-billion company by 20-percent per year, and that’s about what Wall Street sees as growth.
Maybe Apple shouldn’t be Apple any more.
There are some who think Apple should break itself up into smaller division, each one heavily funded and profitable, but if small is beautiful and less is more then a smaller Apple could grow again (because growth is often relative to the base from which it grows, right?).
Apple could spin off the retail stores and let store honcho Angela Ahrendts show what she can really do.
Apple could spin of the chip design team to take on Intel with mobile processors, always providing the most powerful chips for Apple’s products, but providing CPUs that are still more advanced than competition manufactures.
What’s to prevent Apple from becoming like Alphabet (which used to be Google) which oversees a bunch of pie-in-the-sky moon shot companies, of which only one makes money (Google the search engine ad company). Apple could spin off Mac, iPhone, iPad, Apple Stores, and more into individual companies each with a mission to grow. A rising tide lifts all boats, right? At least Apple’s boats would be capable of floating on their own. You can’t say that about Alphabet yet GOOGL remains a Wall Street darling despite being a one-trick pony operation which has failed miserably at diversification.
You know, just like Microsoft and Amazon.
Sure, we all have wants for Apple but they’re mostly tied to our own personal wants to see the stock price rise again, and to get to use more products that have an Apple logo. Apple Car. Apple Television. Apple has enough money to become Apple Bank, too, which could then make it easier for customers to buy any Apple product on a monthly subscription rate.
I know what you’re thinking, “Why all the outside the box thinking, Kate?”
First, it’s what I do. Second, Apple needs to do something. Mac growth is at a peak. iPad has peaked. iPhone has peaked. Even Apple says so. Peak means no growth. Wall Street likes to pour money into growth stocks which, clearly, AAPL is not.
It’s been written that Steve Jobs told Tim Cook not to think about ‘What would Steve do?‘ but to trust his own gut. Maybe it’s time to ask, ‘What would Steve do?‘