Why 2008 Was Not A Very Good Year For Apple

By most accounts, 2008 was another in a string of banner years for Apple.

The Mac is back with the best models ever, OS X Leopard is the darling of the desktop, the iPhone crashed the cell phone block party, the iPod still rules, the App Store is a huge hit, and no one sells more music than iTunes Store.

Oh, and record revenue and profits, too. What’s wrong with that? Stock price. Steve Jobs. Innovation.

2008 could be the year that AAPL owners say goodbye to years of record stock price gains as the market crashed and is not likely to recover any time soon.

2008 was also the year Apple said goodbye to Macworld (actually leaving, of course, in early 2009 as the company’s last Macworld), the annual and semi-annual pilgrimage of Mac users bowing at the keynote shrine to high tech overlord.

2008 was also the year that Steve Jobs stopped giving Macworld keynote addresses to the Mac faithful and media pundits and pundit wannabes. Has Steve begun the transition of power at Apple. Yes. We will see Steve Jobs less and less in the future.

Stock price? OK. Steve Jobs? OK. Innovation? How is that a problem at the world’s best innovating computer company?

I submit that Apple innovated through the years because it had to. Apple didn’t have much to lose so gambling on the future was the only thing left to do. Apple gambled on OS X and it paid off.

Apple gambled on the iPod and it paid off. Apple gambled on the switch to Intel processors and it paid off. Apple gambled on the cell phone business with the iPhone (although it could be argued that Apple was forced to develop an iPhone to protect the lucrative iPod and iTunes Store revenue streams).

You guessed it. That paid off, too. But what’s next? Where’s the next great thing? Where’s the innovation we really want to see from Apple? Or, has the Cupertino Company taken to protectionist efforts instead of gambling?

I fear the former and long for the latter.

Recent headlines indicate what a year 2008 was for the whole computer, music, software, Apple watching industry. Time Magazine has a list of the Top 10 iPhone Apps for 2008 (I have about 40 on my iPhone, Fake Call is one of the best).

CEO Steve Jobs is deemed ready to die or in great health, depending on what you read and where. Green Peace, those really zealous Mr. Clean types, decry Apple’s efforts to produce green, environmentally responsible products—all the while, customers think Apple is the greenest company on the planet.

Apple’s Kool-Aid is green.

Stock analysts pick Apple’s stock to go up, pretty much as they have over the past five or six years while the stock was actually going up, even predicting it should go up all the while it was actually going down (including what used to be my retirement fund, children’s inheritance, etc.)

Competition has crumbled under the Apple juggernaut of success. Walmart fell and now sells iPods and iPhones. Dell is closing factories and laying off people. Cell phone carriers are standing in line to sell the iPhone, just like customers who stand in line to buy one, all while cell phone manufacturers figure out who to layoff next.

In other words, almost everything Apple has done in recent years in whatever product line you wish to view, has been a success. Almost, but not quite. Apple has switched from being an innovator to a large corporate protector—protecting itself.

The iPhone is a great product, more evolutionary than revolutionary, and more designed to be an iPod that also does phone calls. At a time when the world is beginning to buy inexpensive and diminutive netbook computers for $300 to $400, Apple introduces their own version.

The MacBook Air is Apple’s netbook—but sells for a whopping $1,799. From my perspective that’s Air for about $1,000 more than it should be.

Can you say AppleTV? No real success there, though customers seem to like the little box that could only if the networks and movie moguls turn off their fear buttons and embrace the Apple Imaginary Light of Success™ for a moment.

Even venerable Microsoft struggles to keep up with Apple’s recent string of successes. True, the Barbarians at the Gates palace no longer dominate the tech psyche as they once did with fear and mongering, but they can’t out Apple Apple with a Zune or a Zune phone.

With nearly everything going right, how can anything go wrong? Murphy’s Law dictates that whatever can go wrong, will. In the case of Apple—Jobs and Company—the whatever is already here. Apple isn’t as much about innovation and risk taking as 2009 begins as it is about protecting what it has.

Why haven’t we head a “one more thing” at a Macworld keynote for a few years? Because there’s not one more thing™ left at Apple. Steve probably knows that and he’s ready to call it down the curtain.

2009 will be the beginning of a new era at Apple, possibly putting a dampening lid on one of the world’s greatest company stories. Apple is all grown up these days and without Steve out front and center, leading the charge against the barbarians, it won’t be as much fun.