Don’t ask me for a list of all the constants in the universe, but change is bound to be high on the list. Simply put, things change.
Like it or not, our favorite gadget company is in the midst of some highly visible gut wrenching changes as it goes from rags to riches, from rapid growth to maturity. 2013 may indeed be the year the old Apple died and the new Apple reaches maturity.
Adolescence Redefined
In what seems like ages ago, Apple co-founder and then CEO Steve Jobs told Stanford University graduates to ‘Stay hungry. Stay foolish.’ That was 2005, long before the iPhone, iPad, and before Apple’s riches began to pile up.
Since the launch of the iPhone and iPad, Apple has earned a vast hoard of riches as the company’s products upended one technology segment after another.
That was then, and this is now. From early 2012, Apple’s stock performed like no other stock in history, making Apple the most valuable company on the planet.
For about nine months, Apple could do no wrong. Then, reality set in. As expected, Apple’s meteoric growth in revenue and profits slowed. Intense competition cut into Apple’s notoriously high margins, and trimmed market share.
Apple’s response to the changes in market conditions was to double down. Instead of reinventing a product segment, Apple went from innovation mode to iteration mode at the exact same time Wall Street and shareholders wanted to see more product magic.
Instead of a Jobsian ‘One more thing…‘ to ignite the passions of customers and shareholders, CEO Tim Cook decided to share the wealth and issue a dividend. That, and missing Wall Street’s enormously misguided expectations did little to improve enthusiasm for Apple or AAPL.
‘Stay Hungry, Stay Foolish’
Somewhere in the not too distant future we may look back on 2013 as the year Apple changed, leaving behind the youthful ‘Stay hungry, stay foolish’ attitude embodied by Steve Jobs. Apple under Tim Cook is a mature Apple, a predictable company that doesn’t meet the expectation of the unexpected.
2013 may mark the changing of the guard at Apple, not just in leadership, but it attitude. Apple could not continue to grow at the pace laid in by Steve Jobs. Numbers just don’t work that way. Maturity and predictability are in, hungry and foolish is out, the victim of pragmatism and evolution.
Even at this low point, Apple remains a force capable of defending those newly won mountains of riches against a range of competitors which have been devastated by the company’s march into new territory.
Google, Microsoft, Nokia, BlackBerry, Dell, HP, and many others which compete with Apple have been weakened by the company’s rapid growth into the mobile arena. Just as Apple hoisted the flag of victory, the natives have become restless, weary, and wary.
In today’s competitive environment, Apple’s survival is not an issue. Neither is the company’s prosperity. Hundreds of millions of customers attest to Apple’s ability to delight the masses. But that was then and this is now. Over the course of the next year we’ll see if Apple can be a mature citizen and still stay hungry, and stay foolish.
Borrowing money to buy back stock and give tens of billions of dollars to shareholders tells me that Apple’s leadership today isn’t creative enough to know what to do with Apple’s hard earned riches.
AdamC says
Friday, April 26, 2013 at 8:32 AMI am with you that they shouldn’t borrow money to pay dividend.
But then they also don’t want to bring back the cash from overseas and tax at 35%. I guess it is cheaper to borrow than to repatriate the cash which ends up in Uncle Sam’s pocket.
Let’s see what sort of new products they will be intorducing and I hope they are not returning to the bad old days of scullery’s by making as many different models just to goose sales.
Jace says
Friday, April 26, 2013 at 9:36 AMThat’s the most insightful sentence I’ve read about Apple’s ‘troubles.’ Cook truly has no clue what to do with $100 billion other than give it away. That’s crazy.