June 2012 will mark 5 years since the first iPhone was released. And since then without fail there’s been a new model every year. Sales of the devices have grown and grown to make Apple, for a while, the biggest company in the world. It now sits on a pot of 100billion USD to spend at it’s own whim. If Apple were a country it would be the 47th largest economy in the world. Not bad for a company that was so close to going bust in 1997 that it needed a $150 million investment in non-voting Apple stock from its arch rival Microsoft. With a worldwide mobile device market share now of 7.4% or 23.8% of worldwide smartphone sales where does Apple go from here?
Immatation is the sincerest form of flattery, and while Apple may not have been the first to market with a new device (I think here of the mp3 player) it certainly knows how best to market, design and package it’s product like no one else. For Apple to grow or even sustain the kind of growth they’ve experienced in such that period of time (2007-2012) they’re going to have to do even more then whats gone before. These kind of growth levels are cyclical. Carrie Fisher once said “There is no point at which you can say, ‘Well, I’m successful now. I might as well take a nap’.” We’ve seen it all before, how a company rises to the top, gets too big for it self, too self assured of it’s own abilites and then it has young whipper snappers snarling at it’s heals. I am of course thinking of RIM, the makers of BlackBerry, whose US market share has slid from 44.5% in 2007 to 6.5% in 2012 and seen their share price drop from $126.95 to $14.80 in the same period. A lesson for all companies I believe.
Apple now faces increased competition from Google and it’s army of hardware makers running it’s Android operating system. Google now has almost full regulatory approval for it’s purchase of Motorola so it will soon start to produce it’s own hardware rather then farming out it’s Google Nexus line to be made by other handset manufacturers like HTC and Samsung. Google will now become exactly like Apple with not only it’s own operating system but also it’s own hardware. BlackBerry too plan to launch their first line of smartphones running their own OS called BB10 (previously QNX) which they hope will help it recover some of it’s lost market share. But is it just competitors that Apple should be worried about?
While of course the profit line is the be all and end all and producing devices that people want to buy over competitiors offerings is hugely important there’s another thing that you must keep your eye on to. When you rise to the top you can go from being the plucky little company that everyone loves to the multinational global conglomerate that everyone is suspicious of or worse, out right dispises. Another lesson here from BlackBerry. They too were at the top of their game in 2008 and 2009. They could do no wrong and the blogs regarded them as the “in thing”. But soon there after things changed. Public perception of BlackBerry went from it being a cool device to one for the corporate world. A device that was foisted on business people from their tech departments. A second device that you reluctantly had to use between 9 and 5 until you could get stuck into your iPhone or Android device. No matter that BlackBerry devices were and are still excellent devices that are great for getting things done quickly and efficiently, public perception had already eaten into it’s reputation.
The media and public perception can be just as detrimental (or even more so) to your product as poor design. News editorials wield huge power and have been known to bring down share prices of companies. The contrary is also true. A poor device which has the support of the media can be forgiven and thus sell well. But what of the changing tides? We’re starting to see elements of this now. Apple is already having to defend itself over it’s treatment of the Foxconn workers who produce the shiny metal objects. Not to mention the issue of some apps on iTunes and privacy issues. Is this the beginning of Apples fall from grace with the media? Possibly. But they can do something about it? They could try eating some humble pie. They could acknowledge that they do need to invest properly in their workers lives. That farming out jobs to other countries with looser labour laws, while cost effective, may not win them any friends.
Since the passing of Apple’s CEO, Steve Jobs, many analysts have wondered about the future fortunes of the company. Can it still succeed with out his abilities, his focus and his drive? Apple has reached the diametrically opposed position of where it was in 1997. It now needs to look over it’s shoulder and watch for those that would like to knock it down from it’s perch. Not just at competitors but more importantly the media too. The media can be your best friend and your worst enemy. Just ask BlackBerry.