Who cares about the PC? It’s history, right? Not so fast. In the nearly 40 years the traditional PC has evolved on the earth, there have been ups and downs and even more changes. But people still buy PCs, even though sales are going down. Apocalypse, right? What about the Mac. What about the iPhone?
Predicting Gloom And Doom
Here’s the thing about those who predict gloom and doom in the technology industry, made especially prescient by those who predict various and sundry apocalypses for Apple. Their number is growing and their predictions are growing by the number.
Unfortunately for those of us who are Certified Bona Fide Apple Watchers, the predictions are often wrong, but nobody is keeping score. It’s like listening to politicians lie. They all do it. Nobody keeps score.
Here’s the thing, PC sales have been going down for years as people switch more of their computing to mobile devices, specifically the smartphone. So, how does a prognosticator of gloom and doom view the Mac, which has grown to three times the marketshare of just a few years ago, justify the old Mac is Dead meme?
Back To The iPhone Future
Smartphone sales, which play a big part in Apple’s recent past and current future, are reaching the saturation stage over much of the developed world, including China. PCs reached that stage many years ago when growth began to level off and then sales slowly declined. Critics like Jason Perlow and others who work for digital rags whose mission is to create controversy where none exists sees another apocalypse for Apple, this one brought about by the iPhone, and it will be so bad it spells the end of Apple (*as we know it).
Yep, the iPhone apocalypse is coming. Again.
See, Apple is this incredibly wealthy company that, well, let Perlow outline the problem that others have pointed out including ZDNet’s Charles McLellan’s latest market analysis.
It paints a picture of an incredibly wealthy company sitting on hundreds of billions of dollars in cash assets, but growth in its core business of iPhone, which makes up 68 percent of its revenue, is slowing quickly and making significantly less headway year-over-year in various key developing markets, giving up increasingly more share to more price-aggressive Chinese products instead.
Wow. If that’s true then Apple is doomed, right? Someone finally predicted an Apple apocalypse that will totally happen. If not yesterday, then today. If not today, then soon. Soon, I tell you.
Analysis vs. Guestimation
Any solid analysis should come with some numbers or trends to back it up and the only one available is that Chinese smartphone makers are growing while Apple is not, though the latter makes money and the former do not. Profits don’t matter in analysis, though. Everyone knows that. The problem is in the analysis, not the numbers.
Critics compare cheap plastic iPhone knockoffs which run Android to iPhones, an aspirational brand. That’s bad mojo, and goes against some rule tech writers can’t remember from Criticism 101, but learned in Apple Bashing 304. Oranges to Apple, folks. The iPhone is an aspirational brand. People want it after they’ve settled for something lesser, and because iPhones run iOS and fit within Apple’s tightly manicured and curated ecosystem, there is no comparison.
An iPhone is not just a smartphone just like a PC is not a Mac.
Today the Mac remains a luxury product, having to distinguish itself in an industry where all other PC companies have gone through a massive tectonic shift towards heavy commoditization and across-the-board sameness.
It doesn’t occupy a leading position, but it’s a healthy albeit relatively small business proportionally within the company.
The Mac, like the iPhone, is an affordable luxury product, and distinguishes itself from common riffraff because of OS X and Apple’s ecosystem (not to mention highly crafted design, fit and finish, premium components, etc.). As to a healthy business that is relatively small, that’s probably accurate. The Mac would fit nicely into the Fortune Top 200. So would the iPhone. So would the iPad. So does Apple’s rapidly growing services industry of iTunes, App Stores, et al. Even Watch fits into the Fortune 500. Apple is #5. #500 is McGraw Hill with revenues of over $5-billion. Watch does better than that already.
What if the coming iPhone apocalypse is just plain old market saturation, whereby the iPhone’s market goes into refresh mode and sales never ever increase but just stay flat each year as customers upgrade less frequently and growth stagnates in other markets. Flat. Flat. Flat. There’s not much wrong with selling 50-to-75-million iPhones a quarter, each with the industry’s premium gross margins, which, combined with the other Fortune 500 companies that Apple owns will keep the company profitable beyond any competitor.
Let’s face it, gloom and doom is not an analysis without numbers, and shouldn’t be taken seriously unless there is a track record of accurate predictions, and the staff at ZDNet is the last place I would look for when searching for a track record of accurate predictions about Apple’s soon-to-be demise, let alone an apocalypse.
It didn’t happen to the Mac and it won’t happen to the iPhone.