Saturday, October 08, 2011

Is Apple Already Dying?

Image by Jonathan Mak Long
It's now 48 hours since The Steve shufflel'd off his mortall iCoile. During that period I've been asked, more than once, how long Apple would last now that Steve was gone.

Every time my honest answer was "I don't know. If I did know I'd invest accordingly and become a millionaire."

So, with that in mind, I'm going to speculate on the future of Apple. Not that it'll make me rich, but because I have my own opinion as to where Apple is and where it's going. But first, a quick review of the past.

Apple has already gone through a period of Stevelessness from 1985 through 1997. Apple's first golden age occurred during this period from 1989 to 1991. But after that heady period Apple began to slide downwards both in terms of profitability and relevance. It was during this slide that the OS debacles began and the Newton was released. Product flops and missed deadlines took the luster off the Apple, which led to a series of CEOs from Sculley to Spindler to Amelio and finally back to Jobs in 1997.

During that period Apple rose to its greatest height and then cratered rather spectacularly, to the point where Micheal Dell told a crowd in October 1997 that Apple should be shut down and the money given back to the shareholders. Dell's comment came right after Jobs had taken control again, and speculation was rife that Jobs return would finish Apple off. History and hindsight show what really happened; by January 2006 Apple's stock market valuation had passed Dell's, in part due to Apple's rise and in part to Dell's decline.

The current generation at Apple knows this very well. After suffering a near-death experience and subsequent rescue by Steve, Apple has had it infused into its very corporate fiber to Do What Jobs Wants. Jobs has reinforced this with his careful selection and nurturing of his lieutenants, starting with Tim Cook and moving down. Apple the corporate entity doesn't want a repeat of the First Period of Stevelessness. Unfortunately, Death comes to us all and this second period is rather permanent.

Apple may have already hit its peak. Steve has been ill since 2005, and he's been in and out of the captains chair since 2008, when he took his first medical leave. The second one in January, followed by his stepping down in August, was the worst and longest. With Steve's death, Apple is setup to fall into a period of stagnation very similar to what hit Disney when Walt Disney died. It wouldn't surprise me to hear in the halls of Apple "what would Steve do", just like it wasn't unusual to hear "what would Walt do?" For Disney, it stayed stagnant for quite some time, and then it hired Eisner.

With all of this I don't believe that the release of the iPhone 4S is the sign of impending doom. The iPhone 4S was Steve's last effort. The release date of iPhones has always been yearly, with a major release spanning two years; iPhone 3G July 2008, iPhone 3GS June 2009, iPhone 4 June 2010, and the iPhone 4S October 2011. There is a definite pattern there. The iPhone 5, if Apple follows this pattern, will be released next year. What features it may have I have no clue. I can only prognosticate releases based on history, which looks pretty darn clear. It's the release of the iPhone 5 that will be pretty telling, both the date and what's in the iPhone.

With apologies to William Shakespeare's Hamlet

"What dreames may come, When we haue shufflel'd off this mortall coile, Must giue vs pawse."

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