There are signs when a business isn’t doing too well. Revenue and profits going down over time is a good sign things are not going well. An anemic stock price relative to revenue and profits could be another sign. What else?
Laying off employees is a common sign that whatever course a company has decided to take hasn’t worked out, and some employee weight needs to be shed to reduce costs. What signs has Apple shown in recent years that things are not going well? What about Microsoft?
See What Sticks
My career in technology covers a few decades and one thing I’ve learned is not to trust PowerPoint presentations and Excel spreadsheets for new product presentations or business ventures. Slide shows and spreadsheets to support the bullet points are too easy to make, and often do not reflect real world conditions.
Some technology companies are laser focused and some are like crazy-assed executives with far more ideas than an understanding of how to achieve success with an idea. Those people throw mud against the wall to see what sticks.
Samsung is a good example of the mud throwing methodology. Enough mud sticks that Samsung makes a profit here and there. Microsoft is a similar example. The company used to be Windows and Office, and both still make up the lion’s share of Microsoft’s profits. But the handwriting was on the wall for a couple of decades so the Redmond company spent tens of billions of dollars to diversify.
How’d that work out? It was mud on a slippery wall and not much stuck.
Last year Microsoft announced that nearly 3,000 people would lose their jobs. A few months earlier nearly 2,000 people in their smartphone business were let go. The year before about 7,500 jobs were cut and the company wrote off over $7.5-billion thanks to a very sour Nokia purchase. Another news report says thousands more are about to get the axe.
See the problem?
One can argue that such moves are necessary as Microsoft changes course, moves away from Windows, Office, and PCs toward cloud computing, et al. The reality is this. Not much mud has stuck to the wall recently. Technology pundits said Microsoft’s Surface notebooks would clobber Apple and the Mac in the marketplace. Instead, Surface has been clobbered with declining sales as Microsoft still doesn’t have an answer to the mobile device revolution.
It ain’t cumbersome hybrid tablet-cum-notebooks that aren’t good notebooks and even worse as tablets.
Trust me, folks. The answer isn’t Windows everywhere because, and Microsoft should know this, the world is tired of Windows. And personal computers. The only growth anywhere is with low priced Chromebooks (where nobody makes a profit) and premium Macs (where Apple takes half the PC industry’s profits).
Now, compare Microsoft’s approach of trying anything to make a non-Windows or non-Office buck with Apple. Now we’re talking laser focus. Every new Apple product works exceedingly well with current Apple products, and it’s been that kind of focus for many years. iPod only worked with the Mac at first, then Windows later, but its popularity brought millions of customers into Apple stores.
Mac sales have benefited from the iPod’s halo effect. The iPhone only enhanced that relationship. Ditto for iPad. They all work well but better together. Watch? It’s an iPhone accessory. Those hot selling AirPods? iPhone accessory (but also work on Mac and iPad). Step by step, and with great discipline, Apple has built a juggernaut not by throwing product mud against a wall to see what sticks, but by making products that customers want to use, and that work best when in Apple’s ecosystem.
The numbers don’t lie. Neither does mud that doesn’t stick to the wall.