Faithful readers know that I poke holes in Google’s balloon from time to time because the company isn’t what it claims to be. Today I take a look at ZDNet, the BuzzFeed of technology rags for their propensity to scream constantly the Sky Is Falling! meme regarding Apple.
Jason Perlow’s latest screed is littered with pseudo facts, cluttered with the obvious, mashed up with nonsense, and spiked with a fiery meteor heading straight for Apple’s massive flying saucer headquarters-to-be.
The Apple of tomorrow will not resemble the Apple of today.
Duh. Other than yesterday’s Michelle Obama who looks much like today’s Michelle Obama, what of today will resemble tomorrow? Change happens. The Apple of today is not the Apple that Steve Jobs built. Twice.
Apple released more detailed financials about the decline in its iPhone business and the end of its 13-year meteoric rise.
Now it looks like the meteor is heading right for them instead.
That’s called catchy nonsense. Makes for a great headline, caveat emptor not included.
But it represents the harsh reality of what the company is going to face in maintaining market share for its traditional products over the next ten years and what will eventually motivate it to transcend its pure consumer electronics roots into something else entirely.
And now we’re back to marketshare. That didn’t take long. Apple does not and seldom has ever cared much about marketshare. It’s a non-starter in Cupertino. Don’t bother to go there. Unless it’s a slow news day and the graphics department has this fiery meteor graphic that’s already bought and paid for.
Apple of course has undergone these shifts and survived extinction events before. And it has weathered them well. For example, look at the Macintosh — while it is a multi-billion dollar business in and of itself, it only represents 8.9 percent of the company’s annual revenue today.
This is what you call balanced journalism, which more often than not is the setup for the bad news, Apple is doomed meme to come.
Today the Mac remains a luxury product, having to distinguish itself in an industry where all other PC companies have gone through a massive tectonic shift towards heavy commoditization and across-the-board sameness.
Which, if I’m not mistaken, is pretty much how the Mac has always been, and how Apple seems to operate. But go on.
It doesn’t occupy a leading position, but it’s a healthy albeit relatively small business proportionally within the company.
So, that tiny, tiny Mac business doesn’t mean much to Apple because tiny. Relatively speaking, of course. Perlow didn’t mention the Mac having over half the PC industries total profits. Year after year. ZDNet ran a story about Apple’s China connection. Nattering nabobs of negativism, indeed.
It paints a picture of an incredibly wealthy company sitting on hundreds of billions of dollars in cash assets, but growth in its core business of iPhone, which makes up 68 percent of its revenue, is slowing quickly and making significantly less headway year-over-year in various key developing markets, giving up increasingly more share to more price-aggressive Chinese products instead.
And we’re back to marketshare again. Will that never end?
The giant engine of manufacturing that is China is going to unleash this commoditization effect on Apple’s iPhone and iPad businesses as well. What it did to the PC industry before, China will do to what is Apple’s core business today.
I guess not.
But why is it that China didn’t destroy Apple’s Mac business with commodity PCs, but it will destroy the iPhone and iPad business with commodity phones and tablets?
Apple does not play by the same rules the rest of the industry does. This is both an advantage and a disadvantage.
It’s an advantage in that they don’t have to engage in open enterprise warfare that the more general technology companies are constantly embroiled in. But it’s also a disadvantage because they are very much consumer-oriented and that industry is constantly in a state of disruption.
That Apple chooses its own course is still being discussed a decade after everyone in the world who can type already knows that just boggles the mind.
One word: IBM. Alright, but that means three words. IBM seems to love Apple in the enterprise, and the iPhone and Pad own the enterprise marketshare numbers in the U.S., so what were you trying to say, Jason? All I heard was blah blah blah.
What Apple has is its brand — and customer loyalty to that brand. It sustains them, but it only lasts one innovation cycle at a time. An extinction event always comes at the end of that innovation cycle and they have to rebuild and re-grow the user base again.
Wow. Catchy. OK, what was the last extinction event? Hmm. Mac didn’t die, it prospered (don’t get me talking about The Cube; I bought one). Apple Stores? More of ’em than ever? iPod? They’re still here and there’s one in every iPhone and iPad; more than a billion of them still being used. Other than Apple II and all the CEOs prior to Steve Jobs, what is it exactly that became extinct?
There is a core user base that buys Apple’s products over and over again, but this base is not enough to keep the company’s businesses afloat and growing given the commoditization effect that impacts the industry as a whole.
Hmmm. That seems like a good core. Over 1-billion active customers vs. Android’s 1.5-billion active customers somehow doesn’t seem like an extinction event, since only Apple is prospering by differentiating their products (thanks to OS X and iOS) from all the Windows PCs and Android riffraff in the wild. How is it exactly that Apple’s base is not enough to keep the company afloat while all those companies that don’t make money and don’t have a bigger base of customers will manage to keep their companies afloat instead?
I missed that part, Jason (this week’s winner of the Nattering Nabobs of Negativism Passed Off As Insightful Analysis Award). Is anyone keeping score of all these nonsensical fiction pieces to see how they play next year?