The trouble with Apple.
I write this as a twenty year user and advocate of Apple products.  My motive in writing this piece is not to denigrate Apple but rather to air my observations as to where Apple might be headed as a company.
I have never been a fan of  Western capitalism and globalisation in its current form. Yet as the incumbent system and the one that we all labour under, I interact with its overwhelming nature at a million different touch points. One of these touch points for me is Apple products, I have a iPhone, iMac, iPad and some old iPods which have fallen into disuse, do the stratospheric success of the iPhone.

Over the last few days, I have become quite intrigued by the recent reporting around the release of Apples’ latest sales figures from financial quarter ended Dec 28 2013.  Just to recap Apple have sold 51 million iPhones and 26 million iPads and have increased sales of all their product categories, except iPods. To put that into some context Apple has become the largest retail company in the world by market capitalisation, generating $13.1 billion in the last quarter alone. If you remember, as I do, where Apple came from in the 1990′s this is somewhere near miraculous.

By now we are all familiar with the tumultuous history of Apple, interwoven with the complex nature of its co-founder and driving force Steve Jobs. First his founding, then ousting and then his triumphant final return to the company. Apples’ near death experience followed by its spectacular rise to become the most valuable company on the planet, interrupted only by the untimely death of Jobs due to a rare form of pancreatic Cancer. There have already been many books written about Job’s life, one major feature film released and another one in production as I write. Quite a story.

Listening to Wall street’s tepid response to Apple’s latest figures because they didn’t match industry estimates, makes me reflect both on the trajectory of the tech company and the expectations of the global economic system it operates within.

To be fair the fall in the stock price is more to do with the projected future of the company than its recent past. a future where it does face some formidable challenges both with the continued rise of Google and the subsequent success of Samsung.

But if you remember, Apple has been here before, some twenty years ago when it was the undoubted underdog to a Microsoft dominated world. The belief that a company should manufacture both the hardware and the software in order to produce a superior final product, finally seemed to win the day.

So now if you look at the smartphone wars, it looks a lot like history repeating itself, however this time around with Google and Android as the antagonists. What will be the final outcome ? no one can predict.

My concern lies with the influence of Wall Street, the investors and fund managers. When Steve Jobs was alive he famously never really cared much for the opinions of these people, yet times are changing and they are beginning to have a growing influence on the current board and the new CEO Tim Cook. This is evidenced by the actions of one such investor, Carl Icahn who is known as an activist investor,  he hopes to persuade Apple to buy back some of it shares hereby sharing some of its estimated $159 Billion in cash with its shareholders.

This level of scrutiny in Apple by Wall Street, in my opinion, can only be bad for Apple and its customers. It forces the company to make a series of iterative changes to its key products in a scheduled spectacle each year. Even these small changes can guarantee a boost in sales revenue. This revenue satisfies Wall Street in the short-term and adds to Apple’s growing mountain of cash. But at the same time it can be viewed  as a cynical manipulation of its loyal user base. The company is under constant tremendous pressure to produce a new product and even a new product category. This cannot be sustainable, so in the meantime, Apple appeases Wall Street by buying time with small iterations. 

Of course, the landscape has changed somewhat with mobile products making up some 70% of Apples annual income, an income stream that didn’t even exist seven years ago. Now Apple faces the combined threat of Google, Android and Samsung. It has to be seen to keep innovating, lest be written off as a company behind the curve, where it used to be perceived as a company way ahead of the curve.

This is my problem, true Apple customers don’t care if Apple is the biggest company on the planet, we don’t even mind if Samsung or Android outsell IOS. It has never been about profit for use as end users. The key is the marriage of technology and design to produce great tools that can inspire us to do great things, and we would like Apple to be allowed to keep on doing just that, regardless of market share.  I am not defending Apples cash mountain or its alleged tax evasion techniques, which I abhor. I am just concerned that with this external pressure to produce greater and greater numbers each year which is the nature of capitalism, we will in-fact start to see a great company begin to crumble and implode.

As ever your views and comments are welcome.