Apple is a smart phone and gadget manufacturer who just happens to offer desktop and laptop computers for sale. I remember when it used to be the other way around. Any way you care to carve it, Apple appears more fragmented (and less unified) in its direction than at any time in the post-Steve Jobs era.
The most valuable company on the planet in hindsight made an error of understated (at the time) proportions when it strategically chose to cease being competitive in the enterprise. To this day, businesses are Windows only. Microsoft Office is the gold standard when it comes to software the corporate world uses and nothing offered by Apple is anything more than an impractical substitute.
The consumer vertical space is where Apple’s bread and butter lies. It sells more smart phones than anyone but will that be enough for the company to hang its hat on going forward?
iPad sales are flat. iPhone margins are poised to level off. Apple is dependent on the “rush to upgrade” with respect to their smart phone dominance. These devices are now mature and new features are not being released with the same volume and speed as previous iPhone versions. It’s a natural evolution for this device and Apple has not adequately planned for its flagship hardware offering’s inevitable sales drop-off.
As with people and their Macs, iPhone users will hold on to their devices longer as they see no compelling reasons to upgrade as rapidly as Apple or phone companies can suggest. The ability to respond in a timely fashion to the pressures of constantly being expected to innovate has left Apple losing momentum.
Apple advocates point to the Apple Watch as an example of the ability of the company to diversify its product offerings and respond to the needs of its customers. By not releasing sales figures, however, analysts are left with the not irrational notion that this product may be something of a flop—at least early on. It’s not out of the realm of possibility that there simply is not a large enough market for the Apple Watch. Time will tell, but it’s easy to speculate the initial release is not one that Apple execs are pleased to build upon.
No need to panic
With the largest hard, cold cash reserves on hand of any company on the planet, Apple could weather several down quarters and still insist they’ll rediscover their mojo. Apple hasn’t as much lost it as they have temporarily put it on a shelf. While Microsoft desperately needs a hit with Windows 10 in order to remain viable into the future, Apple can withstand a lag in its iPhone sales as it ponders whether to devote more resources to its Apple Watch or Music ventures.
By choosing to be the first (and only) company to offer its Operating System free to all, Apple successfully pressured Microsoft to do the same—at least on a limited scale. Microsoft released Windows 10 to its consumer Windows 7 and 8.1 users. These customers will essentially be the company’s software beta testers for its newest version of Windows. By the time the business sector forks over a not inconsiderable chunk of change for their software licenses, Microsoft will be well on its way back to being competitive with Apple.
Would Apple ever consider merging its iOS and Mac OS X operating systems into one OS that functions on multiple devices like smart phones, tablets and desktops? That’s exactly what Microsoft has done with Windows 10 and the results have been largely well received including by this author.
Perhaps the key to Apple maintaining its margins will reside in whether or not it can streamline costs, including those incurred from product inception to completion. Some would say OS X looks more like iOS these days than vice versa. The Mac OS is free as is iOS to run on supported devices. It would stand to reason that an iOS that runs on iPhones, iPads and Macs would make a lot of sense for Apple.
A single operating system that runs on all Apple products would be interesting, if not exciting. If Apple can swallow its pride and decide emulating Microsoft and Windows 10 in this case is decidedly brilliant, critics might stop piling on. A little well thought out standardization by one of the most contrarian companies ever may be just what the doctor ordered.
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