There’s been a lot of irrational exuberance floating around the tech blogosphere since Apple’s earnings report. I don’t see anyone in the tech press being skeptical, and it’s a lack of skepticism that leads to problems.
History doesn’t have many examples of companies maintaining this kind of success, and nobody seems to want to talk about it. Are we just sick of years of recession and so desperate for a huge success story that we’ll ignore risks to maintain the illusion of an invincible Apple?
Apple has a board of directors and investors. Eventually, those investors will lose their restraint and demand that Apple make risky bets to make this crazy growth happen faster. Or Apple will just make a mistake–maybe Tim Cook won’t be able to do what Steve Jobs did, or what he did won’t work anymore.
Apple revived the dying PC industry and proved that mobile devices can be more than executive toys. That’s big. Apple found its fame with products that do fewer things than ordinary PCs in a way that’s appealing to a lot of people, and it’s taking every other gadget producer down the same road.
It’s on the network TV track, chasing products that appeal to as many people as possible while having no unique qualities beyond being accessible to a lot of people.
Apple kicked off a race to maximum blandness across the mobile gadget industry, leading to a flood of better-selling-but-not-different devices. I don’t even read gadget news anymore. It’s just so boring.
The good news, though, is that we’re at peak bland. Gadgets can’t get any more dull than they already are. Apple helped drive mobile into the hands of the masses, which drove component costs down and component capabilities up.
Cheap components mean there’s now room for innovators to swoop in with new and interesting ways to make a gadget without it costing a fortune. We saw the same thing happen in desktop computers when they started looking alike, and the components got more powerful.
Most large websites run on inexpensive servers, and the heavy lifting is done by an inexpensive network that keeps the sites fast in normal times and stable in the event of a huge surge in traffic.
This is the result of the race to averages in computing, and it’s what’s happening in mobile devices. Amazon’s AWS and all things like it exist because a few PC makers got together and had a bland-off for a couple of decades. It was the first clone war. The gadget swarm is #2, and Apple’s iPhone and IPad are equivalent to the IBM PC.
The gadget press likes to talk about how much money Apple is making right now, and how high their market cap is. Remember that race to averages in computing? Microsoft’s stock rode that to a market cap higher than what Apple is seeing now thanks to selling the operating system of choice for the people who built boring clones of IBM computers.
Microsoft ran the world for all practical purposes. Then a market shift happened. The one we’re seeing right now, with mobile, or Clone War II. Now the desktop isn’t as important, and all the most interesting developments are multi-platform. Microsoft has gone from a market cap of around $600 billion to about half that.
Apple’s rise isn’t going to last forever. It’s an artifact of soaring market share and creation of new mass markets where competitors are still learning. Eventually someone will make a clone that’s better than the original, or someone will obsolete the whole platform.
It could go on for a long time, but all it takes is someone figuring out how to do it, and that’s going to become more likely as Apple’s profile grows. Apple has earned its wealth, but it’s too easy for them to forget what made it possible and slide back down.
And I prefer it that way. Monopoly makes companies crazy.
Love the term “peak bland.”
It does seem that there is nothing earth shattering being produced right now. Technology is great, but there are no leaps being taken by Apple or anyone else.
For me, someone without a smart phone, without a laptop that works correctly, there are plenty of leaps I can take technologically, but even if I could afford those leaps, I’d still be 5-8 years behind the curve.
Maybe I should be happy that it will be 2-3 more years before I can embrace gadgets and new technology. Then finally, there may be something worth buying.
Sorry. Maybe I should have added more and made it a blog post linking back here.
Anyway, great thoughts.
Brian