What is noteworthy about smartphone maker HTC turning the corner on profits, even against Apple’s growing success with the iPhone’s sales in Asia, is how little the profit was. The old adage ‘you need to spend money to make money‘ implies that you have money to begin with. So, who has the money? And who is successful?
Money, Money, Everywhere
Apple’s story is simple and one for the history books. The company was hemoraghing money when Steve Jobs returned in 1997. Like a skillful surgeon, he stopped the bleeding, turned the corner toward nominal profits, and began working on the next great thing.
Since the turn of the century, Jobs and Company launched Apple Stores, iPod, iTunes Music Store, switched the Mac to Intel Inside, replaced the iPod with the iPhone, and ushered in the post-PC era with the iPad.
Along the way Apple racked up more profits than anyone could imagine; mostly at the expensive of technology giants that already had deep pockets that they failed to parlay into greater successes.
As an example, Google has devoted tens of billions of dollars to become more than a search engine advertising company. Those efforts have largely failed. Google is search engine advertising personified, despite wasting billions to become more like Apple.
As another example, Microsoft has devoted tens of billions of dollars to become more than the purveyor of Windows and Office. Those efforts have largely failed. Microsoft is the Windows and Office company, despite wasting billions to become more like Apple.
Other examples abound, including Samsung, itself a diversified conglomerate, but Apple’s successes have left a graveyard full of zombie companies; Motorola, HTC, BlackBerry, Nokia, et al. All of which once had money and prominence but failed to capitalize their marketplace winnings on future successes.
While it’s probably true that a business needs money to make money, and investing in future products and markets is a requirement for long term growth, simply the fact of having plenty of money on hand does not guarantee future success in any marketplace.
Apple has become a master at leveraging one product success to gain additional success with new products. That’s not been the case at Google, Microsoft, or many other companies; including those with tens of billions of dollars in assets.
If it’s true that if an article headline ends in a question mark, then the answer is ‘no,’ then all of Apple’s riches won’t save the company from itself or from a smarter, faster, more nimble competitor already working on the next great thing.