Way, way back in the day, so say the history books, there was a movement to break up the New York Yankees. Why? Success. The Yankees kept winning most of the pennants and World Series, leaving competitors to lick dust.
There is precedent for breaking up large entities, particularly monopolies. Two words. Standard Oil. More recently, there were calls to break up Microsoft because, again, monopoly abuse. Shareholders and company executives should consider breaking up Apple into two distinct entities. One hardware, one software.
What’s Wrong With Apple?
There are a number of valid reasons why this proposal has merit. First of all, Apple owns a monopoly on smartphone and tablet industry profits; somewhere north of 90-percent. Apple can abuse that profit monopoly by demanding prices for components that competitors cannot receive from component manufacturers.
Second, Apple has a growing problem it has yet to be able to solve, and it’s getting worse, exacerbated by Apple’s size and complexity. It’s not hardware. The company designs and builds world class hardware that most competitors have difficulty matching in quality and price (thanks to the aforementioned profit monopoly).
Software is Apple’s growing problem– other than what to do with the tens of billions in profits it collects each year; but that’s another issue– is software. While hardware shines as a stellar example of a well organized engineering staff, a highly lubricated for-hire manufacturing process, and a smooth running supply chain, Apple software has a less than stellar reputation, especially in the past few years.
Notable Apple fans, including Walt Mossberg, John Gruber, and many others, have pointed out that Apple’s software of late does not match the hardware for quality, fit and finish. To a certain extent, that’s necessary by design. Hardware must be right because it’s difficult to change a device once it’s left manufacturing and headed to distribution and then to a customer.
Software is different, and here Apple struggles.
Mossberg says he dreads opening iTunes. He’s not alone. Mail is a mess. Photos just is not reliable (especially the iCloud piece). iCloud is not trustworthy, either. iTunes App Store is bug ridden and the Mac App Store is a ghost town where few praise worthy apps reside. Microsoft Office killers Pages, Numbers, and Keynote still have just one killer worthy app in the trio (guess which one).
Every year Apple treats customers to new hardware from Mac to iPhone to iPad, and soon, Watch. Software gets updated to match with new OS X and iOS versions introduced to match the hardware. The problem is that the two don’t peacefully coexist anymore. Now we have watchOS and tvOS and both are works in progress which work and feel more like beta software and apps than finished products.
I’m not alone in my condemnation of Apple’s software woes. I might be alone in calling for Apple to break up into two entities. Obviously, the company is just too big, too complicated, too complex for one management team. Let Apple Hardware and Manufacturing design the devices, and let Apple Software and Design focus on what makes the hardware work.
Alright. I know what you’re saying. “That’s ridiculous, Wil.” You’re right. But Apple’s software has become a weakness such that even tried and true Apple fans can point out the problems and one of the most severe is that the company’s executive management has lost the ability to deliver on the promise of ‘it just works’ and is so devoid of creative thinking that it cannot figure out what to do with a hundred billion dollars other than to give it to undeserving shareholders and buy back its own stock in a failed attempt to prop up the price.
It’s simple. Maybe not easy. But it’s simple. Apple, make the software work again. Then we’ll all be happy, and you won’t hear calls to break up the company.