CEO Tim Cook has been running Apple for a long time. The era of Steve Jobs’ second coming ranged from 1997 to a few years before his death, when Cook was the de facto CEO. Jobs died more than five years ago. His last product introduction was the iPad.
Since Jobs death Cook has guided Apple’s operations into a crazy, unheard of stratosphere of revenue and profit growth, mostly thanks to the iPhone phenomenon, which Jobs launched 10 years ago. Thanks to a stock price bump so far in 2017, some analysts think Cook’s Apple is finally firing on all cylinders. Is it?
What Goes Up
Allow me a moment to put on my Ultra Critical Tin Foil Hat for awhile and point out the obvious, both good and bad; for Apple, customers, and investors. First, the latter– investors. They have to be happy because AAPL is at record levels again, outperforming Nasdaq and Dow for 2017. What’s not to like? Apple just finished another record revenue and sales quarter, again, thanks to the iPhone.
All this is good for Apple and investors. What about customers?
In four pages of advertising, Jay Somaney thinks Cook’s Apple is firing on all cylinders, again, thanks largely to the iPhone. Watch is up, too, but the numbers are guesstimates from the usual suspects and not actual sales or revenue run rates. If one looks only at the stock price and iPhone revenue and profits, Apple is doing well. Very well.
What about Services? This is the category that holds pretty much everything else and it, too, is coming up roses with double digit growth every quarter. And why not? Apple has a billion plus customers and that means music, movies, TV shows, apps and accessories all are at record levels. Not mentioned in Somaney’s perspective or elsewhere is how dry Apple’s pipeline has become.
Where’s The Pipeline, Timmy?
Steve Jobs died in late 2011. Since then Apple has upgraded the product line, pretty much as expected; thinner, lighter, faster. Yet, during that time period since Jobs’ passing, Cook’s Apple has managed only two new products of significance, both accessories for the iPhone. Watch and AirPods. Mac sales are at record levels, but the product line has languished; the Mac Pro has never been upgraded, and both the Mac mini and iMac are in need of a refresh, a year or two overdue.
Meanwhile what was Jobs’ last hurrah– the post-PC era ushered in by the iPad, has languished as well, and sales have fallen to their lowest level since before Jobs died. Instead of upgrading and improving the iPad line, Cook seems satisfied to not bother with putting his pipeline of products where his mouth is. If Apple is firing on all cylinders then how is it that so many product lines are in need of an upgrade. Competitors are shipping products with far improved hardware specifications, and Apple’s two main operating system competitors– Android OS and Windows 10– have far more features and capabilities.
The stock price, cash pile, and recent financials make Apple look good on the surface, but a company’s future is not to rest on its laurels. New products are the future and Apple doesn’t seem capable of doing much more than keep the status quo humming along while sending in a few accessories to disguise the empty pipeline.
The Tim Cook era is likely to go down in history as Apple’s most profitable but based upon the most anemic products.