I worry about Apple. Maybe I shoudn’t, but everything, and I mean everything is going so well on every Apple front that it’s probably wise to think about future problems.
The problem is, I can’t find any. Not that Apple doesn’t face some speed bumps or competition or challenges.
It’s just that Apple is meeting them all head on and winning at every turn. How long can they keep that up? When they trip, as you might think that eventually they will, what will be the consequences?
Back in March Business 2.0’s Paul Sloan wrote an intriguing article about Apple’s future and what’s next.
Most of the article focused on what could take place in the near future, and Apple’s position regarding media; music and video and cell phones and the like. There wasn’t much about ‘fear’ of the future.
As of today, Apple’s stock is over $70 a share, another all-time high. The company has a market value of about $60-billion, only a few billion less than Dell computer.
While not as profitable as Dell or Microsoft, Apple is doing well and has nearly $8-billion in the bank and is bleeding in black ink. What could be better? Or worse?
After all, what goes up, must come down. Apple’s stock has been high before and fell like a rock when it tripped up on education sales a few years ago.
Since then, Mac sales have picked up dramatically due to the so-called ‘halo effect’ from staggering iPod sales. By most accounts, Apple owns the portable music market with nearly 90-percent market share of hard drive portable players, over 60-percent market share of flash-based players, and around 80-percent of the legal online music download market.
What’s not to like? How long can that success continue?
Better yet, no one in the Mac’s average Joe user cares much about the impending switch to Intel chips, though the first products are right around the corner.
The PowerBooks, the darling of the media three years ago, remains the darling though changes have been evolutionary, not revolutionary.
Mac OS X Tiger remains the kind of free PR and garners more media attention than Windows has since the launch of Windows 95 over ten years ago (back when everyone was claiming ‘the Mac is dead’).
Apple’s revenue and profits and unit sales are at staggering record highs. Market share, once so small it was difficult to measure, is growing by leaps.
Can you see why I’m worried about the future?
Apple even took a flop like the iTunes Motorola Cingular cell phone flop and managed to place all the blame on everyone but Apple. Our Cupertino, CA Mac maker is covered in Teflon™.
Microsoft is back where it started; trying to play catch up to Apple which owns media and customer mindshare; Microsoft only retains cash and market share; in OS and loating by customers.
For the most part, everything Apple makes and sells these days is selling well. Software. Hardware. Spin control. That’s why I’m worried.
2006 is just around the corner and it’s time for Apple to pull another rabbit out of the hat. Each time Steve Jobs takes the stage at another keynote or product announcement, the size of the hat grows larger; the impact on Apple of a disappointment looms over each drum roll.
Should Apple stumble in 2006, the stock would drop faster than Michael Jackson’ move to Bahrain in search of child-like innocence (not necessarily his).
Where could Apple stumble? What potential spike strips cross the road in front of Apple’s Mac truck juggernaut?
There’s that nasty lawsuit with The Beatles’ music company, Apple Corp. Could that cost Apple? There’s always a few lawsuits hanging around as any AAPL 10k will tell you, though nothing else jumps out as wholly damaging.
Even the switch of Macs to Intel-based machines looks on track and capable of dazzling buyers with cooler, lighter, more powerful products, at lower prices. What’s wrong with that?
Microsoft hasn’t figured out the Media Center business yet, but their tactics are clear. Windows Live. Xbox Live. Tens of millions of XBox game consoles will be sold in the next few years, giving Microsoft a big leg up in the living room.
Apple doesn’t have a gaming leg to stand on, and has left that arena to Microsoft, Sony, and Nintendo, opting instead to approach the living room from a different perspective.
The iPod appears to be Apple’s entry to the living room, so we can expect evolutionary changes to the iPod ‘ecosystem’ in 2006. Some of those changes have already appears as the latest iPods play videos, and the iTunes Music Store sells videos.
The biggest piece of the living room puzzle still hasn’t been solved. Not even Microsoft has managed to move content and management from the digital hub PC (or Mac) to the TV set (have you looked at Microsoft’s Windows Media Center? Messy—and that 46-button remote? Puhleeze).
By most accounts, Apple’s future looks rosy except for this one cloudy area—the living room. The television. Should Apple stumble in the living room, the stock will crumble, and Apple’s polished shine will certainly dull.
That’s why I worry. I haven’t seen Apple’s focus on the living room yet. It’s not Front Row or the new iMac G5 with iSight and Apple Remote, as that’s limited to keeping the digital hub tied to a Mac. It’s not the iPod because it doesn’t broadcast stored content to the TV very easily. Yet.
My fingers are crossed that Apple will begin 2006 with a flurry of products aimed at bringing the digital hub into the living room with all the splendor and glory of music, photos, DVDs, TV, and more downloadable content displayable on digital TVs—and controlled by an Apple product.
The fear is here. Let the speculation of 2006 begin.
Missy T, you worry too much. Apple and Jobs are more mature, more disciplined, and better armed than ever. Watch the future unfold.
Jack D. Miller
What goes up, must come down. How long can they keep up this pace of hit after hit? Tera’s right. Caution is advised. Especially if you’re think of just now buying AAPL.
I’m not one to wander around in the fields of speculation, but Apple’s Macs and iPods and software all work well together and as long as they keep that happening and competitors don’t, I’m no going to worry.