What does nearly every company that makes a product used by mere humans really, truly, madly, deeply want? *More money. The means to achieve that goal may vary, as does success (or lack of success), but in the end, in a capitalist world, money talks.
Historically, and except for the very early days, Apple has almost always been a company with money. Even when our favorite Mac maker was on the ropes in the mid 1990s, having nearly been vanquished by Microsoft and Windows PCs, and bleeding cash by the quarter, Apple had a few billion dollars on hand; money that Steve Jobs and the NeXT crowd used wisely to keep the company afloat long enough to find the next great thing.
Apple is a great success story but even more so in the 21st century. Not only does the stock value flirt of a billion dollar market cap, the company has a few hundred billion dollars in cash.
Apple has way too much money. Apple has so much money that executives and the board of directors do not know what to do with it all. How else do you explain dividends and stock buy backs? How else do you explain throwing a few billion dollars to produce original video content to prop up iTunes, Apple TV, and Apple Music’s customer base?
No, it is unlikely that Apple executives would ever admit the company has too much money, but let’s look at what the riches Apple has accumulated under CEO Tim Cook has brought to the customer base vs. what far less money brought Apple under the late great Steve Jobs.
Against almost every critical recommendation, Steve Jobs bet the farm launched the Apple Stores late in the last century and steadily expanded their footprint in the U.S. and abroad. The result? A wildly profitable model and the location to see and try new products and get valuable customer support.
After that it was a steady string of hits. iPod and iTunes. iTunes Music Store. Mac to Intel. iPhone and the App Store. iPad. With far less money than Tim Cook spends on R&D every quarter, Jobs and Company launched a string of industry disrupting products that remain category influencers and drivers to this day.
What about Tim Cook and those few hundred billion dollars? What have they brought to Apple– other than the aforementioned stock buybacks, dividends, and executive bonuses.
Well, let’s see what money can buy. Beats Music and headphones. Think of them as iPhone accessories. Apple Pay. Apple Watch. AirPods. Accessories, accessories, accessories. Yes, all the products have improved since Jobs died in 2011. Watch owns the smartwatch segment and put a big dent into the watch industry, but it remains an accessory product to iPhone. Beats is a major headphone brand– unless you’re an audiophile who disdains ear damaging bass– but it remains an accessory.
Steve Jobs was pretty good at disrupting market after market while Tim Cook is pretty good at collecting money. Despite many billions of dollars spent on research and development, billions more dumped into manufacturing, and now billions going to original video content to compete with the likes of Amazon and Netflix, Apple has money, Apple spends money, but Apple doesn’t have too many new industry changing, market disrupting products to show for it.
Why? Too much money. Not enough discipline. Sometimes mean and lean means what it means.