Apple’s Richer than Ever…Then Why so Glum?

Many of us have read or heard about Apple’s most recent earnings results. Almost 48 million iPhones and 23 million iPads sold. Enough mind-blowing revenue ($54b) and profit ($13b) to feed an entire continent for a decade at least. So then why is the outlook so glum across the Interwebs and on Wall Street amid these record-breaking numbers? Well, I’m no industry insider or respected analyst, but here’s my take.

Apple has lost its edge. Yes, I said it.

 

And I don’t mean its fiscal edge—the numbers above put that thought to rest—I mean Apple’s lost its innovative edge. It feels like a play-it-safe company just over a year Steve Jobs, one of the industry’s true mavericks, passed away. Tim Cook is obviously an operations genius in his own right, but it’s also clear that he and his executive management team are struggling to find that next ground-breaking product to re-establish Apple as that company that once-upon-a-time sprouted legions of followers and imitators. Just look at the year 2012 for example. Apple’s iOS 6 was a major letdown. The Apple Maps fiasco. High profile firings, forced resignations, and management shuffles. A still-unfilled vacancy left by ex-retail chief Rob Johnson. The iPad mini was seen by many as Apple kowtowing to inferior 7″ tablets. More Foxconn controversies and accusations of employee mistreatment. It’s a testament to the indomitable force Apple has become that, fiscally, it shooed away those concerns with ease.

Clearly, Apple has been a victim of its own wild success and has moved from a growth company to one that is now fiscally mature. Yes, maturity is boring. Mature is your mom and dad. Mature is responsible. Mature is doing the right thing. Maturity isn’t lighting anyone’s fire. Reminds me of Wal-mart 10 years ago. Growth was astronomical. It was dwarfing all others in the industry. Darlings. Trend-setters. But then came the high-profile failed international expansion attempts and dozens of domestic lawsuits around an array of claims of employee mistreatment and abuse. Today? Sure, Walmart is still printing money, but it is no longer the company du jure — it is quietly consistent and unspectacular. Sounds like a picture of middle age maturity if I’ve ever seen one.

Yet I also think there is a deeper problem at Apple: It is simply trying to do too much; the sprawl is too great. Apple has long been a company that traded on innovation, not on fiscal performance. And when the appetite for control becomes the cover story, how can Apple truly focus on innovation?  Maps? FAIL. Ping? FAIL. Siri? Meh. Removing apps with potentially objectionable content? FAIL. You are not the arbiter of what people should be able to see. Safari, an Apple core app, is completely open to the Web and all its potential salaciousness. Who’s flipping the kill switch on that app?

In my opinion, when Apple rediscovers its core competencies—peerless hardware design and software design that performs and innovates—it will rediscover its mojo and win back the confidence of Wall Street, scare its competitors, and make its users feel like it’s once again cool to own Apple.

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