Has Apple peaked? If so when was its finest hour? What happens to brand love?

What do we want from Apple? What do we define as success or failure. In terms of value creation, shareholder return etc - Twitter is more a failure. Why are the ‘chatteratty’ so excited about UBER which creates nothing, but they still want to give apple a kicking? Is its finest hour over?

The Famous Apple 

The Famous Apple 

Despite outperforming any other company for the longest period of time doubts are still raised about Apple. Truth is the company’s future is captured and trapped in its incredible past its halcyon days are over.

As consumers we can’t let the iconic Apple corporation move along with its life. We are offended with its diversification. The slow sales of the watches indicate that we, the consumer, are troubled when Apple moves on from phones and computers. It is a reflection of the strength of the brand that Steve Jobs built.

If its growth is in cars, or working with SAP or just acquiring companies such as Camel Audio, Flyby media, learn sprout - this will never equal its finest moment. Maybe it has passed it productivity frontier?

By 2004 apple had officially changed the music industry when they launched the special U2 iPod.   This was big the image of Jobs with the worlds biggest band sent a message. The two titans of their fields had joined hands. Undoubtedly the finest moment for Apple was June 29, 2007 when Steve Jobs led the company and launched iPhone OS1. This device changed the world. In the course of roughy 36 months Jobs/Apple had turned the world of communications and entertainment on its head.

I was working in Sony Ericsson we were about to launch the Sony Ericsson W880i music phone which we thought would be world beater. Then Apple crept up changed the game, the industry and the way thought about mobile phones forever. They became this all encompassing device which you can bank on, date on, divorce on,dance and play music on - mind bending. We had sales, we had a new retail store in London - where you could just see people walking to the other outlets to buy Apple devices. The impact was instant. It was as if a plague had hit every other phone maker - and no one knew what to do.

Today the ‘chatteratty’ all give APPLE a tough time. But if we look at the figures and of it as a business it has performed unlike any other business for a long period of time.

It generated revenues of US$233,715 million in FY2015 as compared to US$182,795 million in FY2104, representing an annual growth of 27.9%. This was primarily due to 52% higher retail sales recorded by iPhone, 6% by Mac, 10% by services and 20% by other products.

Carl Ichan took his toys away but this does not dent the performance. http://www.cnbc.com/2016/04/28/icahn-we-no-longer-have-a-position-in-apple.html

Threats to Apple reflect the highly competitive market with aggressive price cutting. Apple’s ability to maintain a competitive advantage could be adversely affected if it is unable to develop and sell innovative new products with attractive margins. The company also faces substantial competition in the operating system market from companies that have significant technical, marketing, distribution, established hardware, software and digital content supplier relationships.

The company is heavily dependent on the cellular network providers with respect to its iPhone. The penetration of Android presents a major challenge. According to Google, there are over 1.4 billion active Android devices worldwide. This needs to be qualified.

Android are not in the same product portfolio or category of the average apple iPhone. Apple have been reducing the cost of production of its phones to reach down into this market. Perhaps this shift in product portfolio and finished quality is a mistake.

Apple is in a market of mimics where people copy each other. As rivals imitate one another’s improvements in quality,cycle times, supplier partnerships, acquisitions, the market converges. Innovation is down one track where no one can win.

Apple has been hugely operationally effective - world class marketing, world class supply chain - but these alone are limiting and destructive if the product portfolio is not strong. Which it is not doing. A weak product portfolio = reduced brand love. If Apple continues to dilute or diversify its offering the consumer will get more confused and disengaged. Then that is the end of the brand love.