Apple’s Churning Of The Gut

It’s the funny season in technology land. The holidays are over, the major technology trade shows are soon to pass, and thousands of tech writers have nothing to report. So we get stories like the Wall Street Journal quoting unnamed sources that say Apple halved their component orders for calendar Q1. I find the whole thing fishy (via Loren Brichter) and never personally made the connection that a decrease in parts meant a decrease in orders. John Gruber linked to a great Forbes article that could explain the situation.

Personally, I’m really bored with these stories. Unnamed sources say such-and-such, the blogosphere goes wild, some rise up to defend Apple while some rip it down. The stock price moves. Then everything returns to normal, waiting for the next big “story” to appear days or weeks or months later. Yawn.

What interests me more is why does this stuff keep happening in Apple’s name? No one comes out and says this crap about Samsung, Google, Nokia, RIM, Microsoft or any other big name in technology. It’s all Apple, all the time.

One possible answer is that Apple’s headlines are perfect link bait. Write something disparaging about Apple and everybody who follows technology clicks the link. Posts get written about it for weeks. The irony is that all the commentary keeps the story alive, drives more traffic to the original writer’s web site, which gets them to write more of this garbage. The second possible answer is that we thrive on building up companies (and people) then tearing them down. Apple was the underdog for so long and now that it is one of the biggest and most successful companies in the world, well, we can’t root for them anymore. A third is that the company is just that divisive. These have been talked about endlessly; none ring perfectly true to me. They all strike me as symptoms, not causes.

I have come to believe that the true cause is something bigger than all of this. I think the right answer is that Apple just fails to pass the gut test for most people. It’s an incredulous reaction to Apple’s success. Look, how is it even remotely possible that a company with such a small market share could really be doing so well? How can a company that had so little success, a company that survived by the skin of its teeth in the PC era, be one of the largest companies in the world now? How can a company with so few products be such a behemoth?

I honestly believe people read their gut and say it can’t be possible therefore it isn’t. Apple can’t be this successful. It’s not possible. And I know that because my gut tells me so.

I had lunch today with one of my old college professors and his attitude was almost “about time.” Apple had its day in the sun, it did well for a while, but it’s time for market realities to catch up to the company. Apple has been a fad for a decade now — since the iPod launched in 2001 — and it is time for it to fade into the sunset like some hokey 1950s western.

Which I think leads to the last unfathomable point that makes Apple’s case so gut-wrenching. There is no way, the gut tells folks, that Apple can continue growing at the current rate. There’s no way! But what the gut can’t fathom is that the markets Apple is playing in are so ridiculously large that there are only a handful of other things that play at that scale, and all of those are at the base level of Maslow’s Hierarchy of Needs. I mean how in the world is it possible that smartphones could play at a seven billion unit market scale? After all, everyone needs air, water and food. Not everyone needs a cell phone.

The gut can’t believe it. Reality, though, can be brutally hard on the gut.

95 thoughts on “Apple’s Churning Of The Gut

  1. The same reports came out about Nokia phones a year ago, lowering their order numbers because stuff wasn’t shipping. Yes, this made news as well.

    Your article basically just said that you don’t believe it, because Apple is too awesome to have anything except great success. You take the term “Fanboy” to the next level.

    • Nokia wasn’t selling devices. It wasn’t rumors. Although you do crack me up with the fanboy comment. That’s pretty funny.

      On Wed, Jan 16, 2013 at 11:18 AM, Elia Insider

    • Speaking of “fanboy” … That word is the Hitler of technology discussions. Congratulations anything you just said is irrelevant.

      • I love it! Makes me think of the scene in A Christmas Story when the buddy sticks his tongue to the pole but he had to be “double dog dared” to do it. Calling someone a fanboy is the last word, like nothing else can be said after that, just like you can’t dare anyone worse than a “double dog dare.”

        That’s quite a complement, if you want to see it that way. By taking fanboy to a new level, I am far more of an Apple fan, according to the commenter, then Steve Jobs, Tim Cook, John Gruber, MG Seigler and others who are Apple-bullish. It’s almost impossible to take “Apple fandom” to a whole new level, I’d think.

        Sometimes comments provide amazing insight. Sometimes they bring a good laugh. :-)

        • I would argue that there is fandom that’s on an entirely higher level than Apple fandom: Apple fantasy fandom in the minds of the haters.
          You know, the kind where people (mostly comprised of Artie McStrawman and his family) are forced into indentured servitude and have to buy, build altars for and worship anything and everything that carries an Apple logo.

    • “You take the term “Fanboy” to the next level.”

      It is a kind of Karma that the Internet offers up comments that are the perfect example of the stereotype being tangentially addressed by the article, as well as a classic example of the bloviating histrionics that Apple articles typically generate.

    • Martin Martin Martin, you poor soul. You prove her point! And all you have in response is another pathetic emotional cry out, “Fan boy!”

      Elia listed some very general high level reasons for the junk articles but I think Martin here is an example of another fuel to the fire. It all has to do with cell phones becoming this sort of identity piece, this display of self worth and ability and savviness etc… Bare with me as I make a few points to set this up… Take a look back at the very beginning of the smart phone revolution. People started buying a personal blackberry when they once were just for corporate managers or people with business. I remember comments I got when I purchased one, “what do you need that for?”, “Oh you think you’re important?” And eventually those idiots bought one themselves apparently thinking they were important. Now, people do this when there is a product that is different or when it first becomes available and there aren’t many out there. It’s a statement about how savvy they are. Fast forward to today and iPhones at this point are becoming ubiquitous. They are everywhere. Regardless of model year, its viirtually the same product in everyone’s hand and it quickly has become a majority. So here’s what I am getting at. There’s this small but highly vocal group out there that are pissed off that they have to go buy an inferior product to differentiate themselves. Also, I think there’s a bit of resentment that people of all classes are purchasing iPhones and they can’t stand being lumped in with people they view as dummies. Sounds crazy? Read through the anti-apple comments below and in other articles… they all sound like they need psychotherapy.

      • I’ve often pondered this psychology, too. I think it began as habit early on in the personal tech industry. Back in earlier days of personal computing, Apple/Mac vs. DOS/Windows was a very important choice; it affected the kinds of things you could do and limited what you could do: data wasn’t easily transferable from one platform to another, the platforms hadn’t matured to the point where they could reasonably each do the same thing. Part of the psychology may have been here was this big expenditure one was making, that no one likes to feel like they’ve invested in a philosophy that ends up being worthless.

        (I’d also hypothesize that it goes back even further, that for early adopters of technology that the specific tech WAS an extension of yourself, that if technology is something you obsessed over then it was a self-expression. Criticize (or even critique) the tech and you are criticizing (or critiquing) the individual.)

        What’s interesting is that these habits have remained even though the landscape is very different. Really, what (generally speaking) does an Android device do that an iOS device can’t, or vice versa? Sure, there are differences in app availability, you might prefer one system’s services to the other’s, but that’s all on the edges. Broadly speaking you’re going to get the same kind of functionality, do the same kinds of things. In the computer space it’s even more normalized.

        But the culture of personalizing technology remains, perhaps even just out of habit. The technology is so ubiquitous that of course it has transferred to brand identification rather than having any real footing in concern over abilities or in “betting on the wrong horse.” There is no wrong horse, at least not now and not in the foreseeable future. But we as a species seem to always have a need for self-expression and a need to defend that, especially those that have self-esteem problems (and I’d posit that those with self-esteem problems correlate very strongly to those that comment on news stories on the Internet, myself included). So this is just a new battleground on which to wage these normal urges. That it’s technology isn’t really important. The battleground will be somewhere, might as well be here.

        • “Back in earlier days of personal computing, Apple/Mac vs. DOS/Windows was a very important choice”

          For most people, there was little realistic choice at all: the majority of people felt compelled to buy PCs because of market inertia. They simply couldn’t run the apps they needed to on other machines, especially if they had to use a particular application and/or file format at work.

          Many people don’t realize that it was the rise of the internet, and of OS-independent data and functionality (HTML, Java etc) running on virtual machines that broke the Wintel monopoly. If it had not been for this, we would all still be locked into using Windows PCs and everything else would be a tiny sideshow. (Because of business use, Macs still ARE pretty much a sideshow; it’s the iPhone that has made Apple so big.)

          • There is much truth that you’ve contributed.

            Egads, did I really write that sentence? Let me start again.

            You make some good and valid points. I think we disagree on some particulars, perhaps, but the overall gist I agree with. The Internet was a very democratizing factor in breaking the Wintel hegemony, and perhaps others might offer different theories, but the important thing is that now, it really doesn’t matter much whether you go to buy a Mac or a PC. There are differences on the edges perhaps, but overall they can be “hired for the same job” and you can be reasonably confident it will do the job about as well as the other would. Thus the choice most people make isn’t one of performance but of brand. Or of other things like aesthetics or build quality or other things. It no longer has to be about capabilities or even about interoperability.

            It’s important to note that, yes, there was almost no choice back in the day, but there *was* still a choice. One of my pet topics is that in the ’80’s and ’90’s and through most of the aughts, I would argue that the Mac user base was more thoroughly tech-savvy than the Windows user base. That’s not to say that “Macs were better, so Mac users must have been smarter for having bought them, QED,” what I mean is that Windows was the universal “default” choice. If you wanted to buy a computer, and you weren’t tech-savvy, you probably bought Windows because that’s what you knew, because that’s what they gave you at your job. Buying a Mac was a choice one had to *think* about, had to have some tech knowledge to bring to the choice, in order to make the comparison.

            That’s also not to say that all users that were tech-savvy bought Macs. Probably most didn’t. Just that anyone that bought Macs was probably tech-savvy, and as such were prepared to brag about it or evangelize for it. Thus the Apple “cult” which isn’t a cult at all, but grew from this quirk that almost all Mac purchasers of the era were well-prepared to talk about their Macs, in a way that most Windows users weren’t.

            This is not the way things are now: many more people buy Macs than used to. Thanks to the iPod and especially the iPhone, there are more and more people for whom the Mac *is* the “default” choice, and the Mac user population has gotten more diverse. But a reputation is a reputation, in the end, and the “Apple is a cult” narrative won’t go away any time soon.

            • And it all came too late for my beloved Amiga, the platform I used to evangelize until the early 90s. Mind you, Commodore’s management were utter buffoons compared with somebody like Jobs.

              If you took a contemporary teenager back to the mid-80s, the Amiga would be the machine that would seem most familiar to them, even more than the Macintosh. True multitasking, a WIMP environment, 4096 colours, and programs that seemed to be geared for creativity, sound and video as much as for games or business. It would have thrived if the internet had come a little earlier, even WITH Commodore’s hopeless upper management. But back in those days, if you couldn’t pigeonhole it as having an obvious (ideally business) purpose, it just confused most people.

            • I vaguely remember the Amiga. Or, rather, I remember the Amiga, that it existed, I remember the name and I definitely remember Commodore (I admit I can’t remember if my first computer was a Commodore 64 or a VIC-20, but it was one of the two). I was too young to be into any of it at that time, though. But reading up on it some time ago I understand what you’re saying, that it was technologically perhaps the top machine of the time.

            • The Amiga didn’t make much of an impact in North America, for various reasons, but it was huge in the UK and much of Europe. It was easily the best gaming machine of its era (miles better than both PC and consoles), and was very influential in a number of ways, from its chip architecture to its OS to the hacker/demo scene which was one of the major ancestors of the modern open source movement, Linux etc. You can also trace many art and rendering programs back to applications built for the Amiga.

              But Commodore never invested in building on the tech. By the early 90s, PCs could outperform the 1985 Amiga technology, and even the AGA chipset for the new Amiga machines released in 1992 were behind the PC market, so there was no compelling reason to buy it anymore.

              Also, it can be argued that even though it was the greatest machine of the early era of viable 3D applications and games, the Amiga’s main hardware strengths were still in 2D: it was a 2D image railgun with its blitter chip et al.

              Commodore tried to market it as a business machine in the US, and as a direct rival to the Mac. These approaches failed. Commodore Europe realized that it was something else entirely…something new, for semi-pro artists, home hackers, gamers, video editors etc. Ask any Brit, German, Dutchman or Swede about this great American machine (designed mainly by ex-Atari guys, as it happens) and they’ll sigh fondly. :)

      • “There’s this small but highly vocal group out there pissed off that they have to go buy an inferior product to differentiate themselves”

        Thank you for this sentence. Made my day.

      • Amusing that you set out your stall as if wanting to say that your choice of phone says nothing about you, but then add a little dig at non-iOS owners:

        “There’s this small but highly vocal group out there that are pissed off that they have to go buy an inferior product to differentiate themselves”

        Apple’s phones are lovely in some ways, weak in others. Their build quality is superb. They almost always run smoothly. But iOS’s UI is now very clunky compared with Android. Much of this is because Apple stick to their guns about key design elements even when it has major UI consequences. This was long the case with the single button mouse. It is now the case with the single home button design: aesthetically lovely (and it ensures no screen real estate is taken up by rotating buttons because that one omnidirectional button is always available as a hardware option), but it means that navigation between apps in iOS is HORRIBLE compared with Android. (I use both on a daily basis, both as user and developer.) Mobile devices are essentially single window app devices, and this means that in practice they operate more like a web browser than a desktop. Not having a universal back button on a browser (where one site is often launched from another) would be pretty clunky, and iOS is similarly clunky. The restrictions on sending files between apps is similarly unpleasant; I often think my iPad would be unusable without Dropbox. Throw in the inability to change keyboard without jailbreaking (now almost impossible on iOS 6) and I cannot justify buying a slick-yet-crippled iPhone over a good Android phone. (I have a Nexus 4.) I don’t “have to go buy an inferior product”; that would be the folk locked into Apple’s iOS ecosystem.

        For the record, I love Apple products. I own and operate five different Macs of various kinds at home and work, and use my iPad as a reading device for tech manuals (although I use my hacked Kindle Fire a lot more for everyday browsing because the iPad is so cumbersome in terms of weight and user interface). But I cannot justify using iOS for my phone; it simply isn’t good enough.

        • I imply nothing of the kind. Of course my 32GB Black iPhone5 for the AT&T network, purchased seconds after becoming available online in the early wee hours of the morning, says loads about me. It says many things and you can have fun determining what they are :-) My point though, which you avoided mostly, are the insane comments from Apple haters, “histrionics” as someone else accurately put it. Do you not see these types of comments? I love my iPhone, but I don’t hate Android. I love my Xterra, but I don’t hate Jeeps. And I love my Windows 7 laptop. There’s a very strange crowd out there, and by all measures of available statistical data their numbers are few, that have a derangement when it comes to Apple.
          I don’t necessarily agree with your assessment of iOS, but what you said wasn’t anything really to get bent out of shape over. So why the insane comments from the “haters”? It’s an irrational response and I was attempting to provide a source for the irrationality while having a bit of fun with it…

          • I wouldn’t say that it says much about you other than that you like iPhones. (Shrugs.) Mentioning that you bought a 32GB model, however, suggests that:
            a) You may (?) enjoy boasting
            b) if so, you think having 32GB is something worthy of boasts for some reason (iPhone as Veblen good?)
            c) Either you use your iPhone as a slightly heavy and unwieldy iPod, or you take a lot of pictures and video, or you are overpaying for storage you probably don’t need.

            As a general rule, I would say that iPhone users are:
            1. Reasonably affluent, or have affluent parents
            2. Are probably fairly well-educated
            3. Probably don’t have an in-depth knowledge of computing devices. This is not guaranteed by any means, but statistically it’s a good bet. They are usually not technical specialists.
            4. Usually haven’t tried other smartphones – typically lack experience with Android and Windows phones.

            I would say that you were implying that non-iPhone owners are somewhat jealous of iPhone owners. At the very least, you were asserting that Android was an inferior OS (which happens to be incorrect imo). If you were not implying this, you might want to write more clearly. (I am not the only one who made that interpretation, it would seem.)

            • “I wouldn’t say that it says much about you other than that you like iPhones. (Shrugs.) Mentioning that you bought a 32GB model, however, suggests that:”

              -Interesting that you gravitated to the “32GB” and not the AT&T or the black or the 5. Hmmm

              “As a general rule, I would say that iPhone users are:
              1. Reasonably affluent, or have affluent parents
              2. Are probably fairly well-educated
              3. Probably don’t have an in-depth knowledge of computing devices. This is not guaranteed by any means, but statistically it’s a good bet. They are usually not technical specialists.”

              – Statistically it’s a sure bet, of the vast majority of cell phone users… Most people are not programmers or into building their own gaming rigs…

              “4. Usually haven’t tried other smartphones – typically lack experience with Android and Windows phones.”

              Interesting comment. Let’s see if we can break that down a bit… If we take iPhone users as a whole, I would agree completely there are few Iphone users who have used a Windows mobile phone. They barely register as a platform today they had a very small share of the cell phone market when they were the top dog smart phone. Android is another animal. Android came out around the same time as iPhone. If we are talking about flagship apples to apples smartphone users, then perhaps your theory is true. I think the why is important to answer though. There’s this notion out there that iPhone users are Apple zombies and blindly buy Apple products… That may have been true back in the 90’s but in case folks haven’t noticed, Apple has grown it’s user base well beyond it’s core fanatics. So that notion is really, ignorant. In terms of the masses, is there any legitimate reason why they wouldn’t change? I can think of 2 biggies. 1, They’ve invested over that 2 year contract period (the contract period in itself prohibits frequent changing so we’ll count that as reason 3) in apps and music. You give that up switching to Android and the vice versa is true as well. 2, it just might be possible that they really do enjoy their phones and don’t want to switch! So not sure what the point of number 4 was, or rather why it was worth mentioning, but there’s a few comments on it.

              “I would say that you were implying that non-iPhone owners are somewhat jealous of iPhone owners. At the very least, you were asserting that Android was an inferior OS (which happens to be incorrect imo). If you were not implying this, you might want to write more clearly. (I am not the only one who made that interpretation, it would seem.)”

              I was not implying that. And the funny thing is, you did get my point as evidenced by your comments about phones being an identity piece. Perhaps you lost focus and forgot?

    • The difference between Apple and Nokia reducing ordered components is that Nokia wasn’t selling any units, while Apple can’t make units fast enough to keep up with demand. Then there’s the ridiculous idea that Apple would have planned to sell 65 million iPhones in the March quarter. They only sold a little over 50 million in the December quarter, and somehow they were supposed to be planning to build 65 million, but cut that number in half? Really? 32 million iPhones in the March quarter would be about right, considering historical seasonal trends.

  2. Android has been making ridiculous leaps. Google is clearly eating up some of the pie that is the smartphone market.

    Is apple running out of steam because that Jobs guy is gone or would he have also run out of steam at around this time too? No one knows.

    This is Mac vs Windows all over again and everyone knows how that scenario played out.

    • By the time the Mac was launched in 1984 it had already “lost” the PC wars. It never achieved any meaningful marketshare against IBM and later Microsoft on clones. The “wars” were largely a fiction and the events that are playing out today have little correlation to the situation 30 years ago. Today the major players are Apple and Samsung. And you’ll see the market largely split between them. One will eventually stumble. Personally I wouldn’t bet on Apple being that company.

      • I think the market dynamics, the truly personal nature of smartphones, and the ease of writing software for multiple platforms means it is unlikely we will see a PC-era winner v. loser here. My guess is there is room for two major players and a third smaller player. Apple/Samsung, Apple/Google clearly are establishing advantages on the hardware and OS sides, respectively. Will the third be Microsoft or RIM or something we haven’t seen yet that solves a completely different problem?

    • “This is Mac vs Windows all over again and everyone knows how that scenario played out.”

      Well, how did it play out? It seems to me that even when Macs were at their lowest point (latter half of nineties) they still had happy users and lots of software. In the 00’s Apple started making lots of money of their computers and sales started going up (and they had even more happy users and even more software). In fact, Apple makes more money on their computer-business than HP (the market leader) makes with theirs.

      I’m puzzled as to why people constantly point at Macs and use it as a cautionary tale Apple should heed to. I see Macs as being a story of success and triumph. I bet Dell, HP and others would just love to have the kind of “failure” Apple has had with their Mac-business.

      • Haha, good one Janne!
        Kind makes that whole comment/argument really dumb and frankly embarrassing, yet I’ve heard people use the same statement quite a few times recently. I might just have to quote you, next time some idiot uses the Mac vs Windows argument :-)

      • Read my comment below. Modern OSX Macs really have very little in common with 80s/90s Macs. OSX is a creation of NeXTSTEP, who effectively took over Apple in 1997. (You’ll often be told that Apple bought NeXTSTEP. This is kindasorta true, but really it was a reverse acquisition. It’s similar to the way that the Dutch House of Orange really took over Great Britain in the seventeenth century, but the public were sold the idea that Britain had undergone a ‘Glorious Revolution’ that had involved acquiring the House of Orange.)

        Apple were a failed company taken over by one with ideas and vision. NeXTSTEP, who are the architects of modern Apple, wanted the Apple name because it was well-known. Jobs also returned at the right time, because certain technologies were about to make the Wintel monopoly
        vulnerable for the first time in ten years. (They also had to have the vision to exploit those weaknesses, though, for sure; Apple (mk 2) have been a brilliantly visionary company.)

        • Sure – but then, you are not using a CLI like DOS, you are using a GUI, Windows and that owes everything to the classic Mac. And before you bring up XEROX, they did not invent the GUI, nor would you like using a GUI without all the stuff Apple did to improve it.

          So in the end, Apple did win, even if you refuse to use a Mac. Because they changed the way we use computers. And phones for that matter.

          • I often make a similar case, only with the Amiga. The Amiga is the machine from the 80s that most resembles a modern computer. It was streets ahead of the Mac. However, it definitely followed the lead of the Lisa. (The Macintosh came out too late for it to be a direct influence on the Amiga; loads of companies were developing WIMP computers in 1984, e.g. Amiga Corp, Atari and Sinclair. Sinclair released the QL mere weeks after the Macintosh.)

            The Amiga’s multitasking, custom chips et al made it look light years ahead of the clunky, non-multitasking Mac that had come out a year before.

            This article is a pretty decent assessment of the importance of various machines (and correctly gives more respect to the 1986 Mac+ than to the original Macintosh):

            http://www.pcworld.com/article/126692/greatest_pcs_of_all_time.html?page=0

        • “Modern OSX Macs really have very little in common with 80s/90s Macs.”

          Yes, and modern PC’s have even less in common with PC’s of 80s/90s, so what’s your point? Macs at least have had a GUI for their entire life, whereas PC’s really got those in latter half of nineties.

            • …and thats why Windows is was dogged down, bloated and held back for the last decade. Apple made a brave decision when they decided to cut the cord during the Intel transition and say look we have to stop supporting older software at this juncture but it will enable us to move significant forward which will be best for all Apple users in the long run. Not every Apple enthusiast took that news well but I think most if not all realise now its was absolutely the right decision.
              MS is doing a bold move now with win8, but whether that is looked back on as brave or dumb remains to be seen. We won’t know for sure for a good few years, I’m leaning towards the dumb at the moment with the current evidence but who know’s, things might change given time.

      • So you are telling me that you would rather be conned into buying inferior virus and malware ridden systems that are manufactured to the lowest quality standards and absolutely crammed full of crapware to bring down the costs and still sold with the lowest margins feeding a race to the bottom.

        • Many of those cheap systems are absolutely fine, though, so long as the first thing you do is wipe the HD and install Win 7 from scratch. (Or Linux, for that matter.)

          Personally I buy Macs because I find they last incredibly well (this is being typed on a 2007 MBP that I still use as my main machine without any issues) and can easily run all three major OSs on the hardware. But it’s not a terrible idea to buy one of the better-made notebooks, throw an SSD into it and put Linux or Win7 on it.

    • That’s a facile analysis, and one that presumes the Windows story wasn’t an exception.

      I have no doubt that Apple’s market dominant position will be eroded by a larger proportion of devices running Android or customised variants – in exactly the way that the market eventually corrected Microsoft’s 95% dominance of the client operating system market.

      The big difference is that the iOS software market is a magnitude larger than the Android one, and it is software that dictates platforms success. The Android software market is like the PC one – potentially large, due to device numbers, but with high piracy. The iOS market is closer to Nintendo’s model. Both are viable.

      Android owners raging on forums that ‘app X should be available for Android’ need to understand that it’s the number of customers, not devices, that count. Big software publishers are capitalists not Apple fanboys.

      Anyway,while history now likes to regard that story as Jobs vs Gates, Apple vs Microsoft, the reality is that everyone I knew back in the 80s had either a Commodore Amiga or Atari ST, and in business the story was Windows vs OS/2 vs Open Systems (an alliance of Unix vendors).
      Microsoft were actually a more ‘closed’ vendor than many of the alternatives.

      The real reason for Windows success was the backward compatibility with MS-DOS – it meant businesses could slowly transition into a GUI world, rather than a complete break.
      Hell, for a long time PCs were using 5.25″ floppy disks when the rest of the world was using 3.5″ disks – this is before machine had built-in hard disks too. That in itself was a ‘lock-in’ for the DOS/PC platform. That bought them time to finish Windows (Windows 95) and then a decade at the top.

      So, predicting that Apple can’t remain at the top is I think a sane prediction, but predicting when and what comes after – well, if you can do that, get in there and make some money.

      (Me – I’d be more worried about investments in Google. There’s a company that is struggling to maintain the growth expected of it by markets)

    • “This is Mac vs Windows all over again”

      Another perfect example of the sad inability of certain individuals to grasp that this isn’t the same game and the rules have changed.

      “everyone knows how that scenario played out.”

      How DID that play out? Apple became the most profitable and successful technology company on the planet.

      • Agreed, the rules have changed yet again. At the same time though the rules remain the same for other games. Create a product that is desirable. Meet the customers’ needs. Manage your supply chain. Keep your overhead low… That kind of stuff never changes.

        Most businesses out there lack the ability to play both ‘games’ so to speak. Game 1 being the industry; watching trends and having the right product at the right time. And then game 2, adhering to those general rules of business.

        Apple is a master at both. They created amazing products and services, and they built arguably the most impressive supply chain known to manufacturing.

    • “This is Mac vs Windows all over again and everyone knows how that scenario played out.”

      People know how it turned out, but those who bring it up as a lazy argument never seem to connect all the dots.

      At what point in the “Mac vs. PC” era did Apple have such a wide base of popularity? At what point in the “Mac vs. PC” era did Apple have as large a share of the market as they currently have in the mobile era? At what point in the “Mac vs. PC” era did Apple have a minority share of the market but rake in the vast majority of the industry profits? At what point in the “Mac vs. PC” era did Apple have over a hundred billion dollars cash on hand? At what point in the “Mac vs. PC” era was Apple dominating its competitors on a device for device basis? (In other words, when was any product in Apple’s Mac line beating out every other PC?) At what point in the “Mac vs. PC” era was Apple so successfully entrenched in multiple product categories?

      Perhaps when you answer those questions, I’ll believe that you’re really putting a lot of thought into your argument.

  3. This is not Mac vs Windows again! The large majority of android puchasers DO NOT KNOW they are buying android. They think they are buying HTC or LG. And given that a large majority of android devices currently being sold have 2.3 or lower installed, then they are not really smartphones, and cannot be used that way!

    • Never mind the fact that no matter what one thinks of Windows, Microsoft’s OS was a coherent, cohesive install across multiple desktop manufacturers. With the minimum specs met, a user could have apps and services on a Dell that were identical to an HP that were identical to a Compaq. That consistency of user experience is nowhere to be found in the Android market, and a large part of why no matter how many more Android based devices are sold, usage stats, developers and money being spent on the iOS ecosystem far outstrips what is happening on the ANdroid side.

  4. Exactly what I’ve been saying for years. People think that companies are like movie & music stars: after a huge period of success, there is always a backslash, decline and fall from grace. People can’t understand/accept why it lasts even when presented with the numbers and the facts. It’s almost like they are saying “It’s not fair!”.

    • Yep, Apple isn’t playing by the rules. They refused to make Netbooks, only have a handful of models of computers and phones, refuse to license their OS to other manufacturers, They’re cheating. Eventually everyone else will realise this and they’ll get their comeuppance.

  5. Oh my god, its so frustrating to hear idiots talk.
    They read stories like Samsung selling 100M of a RANGE of galaxy phones and believe Apple is on a downward spiral when in fact if you compared sales of Apples RANGE of phones not only large those figures pummelled but Apple makes way more profit on a fraction of the sales Samsung makes.
    Both companies use completely different business models.

    Also, how dumb are some stock market investors?
    It just goes to prove having money doesn’t necessarily mean you have any common sense!
    The slightest dumb rumour like this and investors bail on a company instead of waiting for an immenant OFFICIAL report that when delivered still produces record breaking and/or huge profits every quarter!

    • I honestly think investors and some writers work together to intentionally lower or raise stock to make quick profits. Its like a game, and the rest of us react. ‘Journalist’ come up with excuses and investors shift 10s of millions to make the markets go crazy. So, I don’t think they are dumb.

  6. Same tactic, same effect, same time of the year…

    About a fortnight before an Apple earnings call, after a likely bumper seasonal sales period, the seemingly hateful stories suddenly emerge, triggering schadenfreude and outrage in equal measures, hitting the share price hard, which then bounces back to trigger monstrous profits for the scam instigators.

    Yawn as we may, the tactic works unfailingly because “the Mother of Fools is forever pregnant” (as its instigators privately snigger), and by the Law of Averages (“even a broken clock tells the right time twice daily”), even hate-deranged hack writers may find some strange justification in the facts as they eventually emerge.

    • I wouldn’t personally characterize the latest round of “component cutting” stories as hateful. But using unnamed sources to create a story is journalistic red herring, at best.

      • Agreed, which is why I qualified it as “seemingly”; it is the semblance of malice that triggers the emotional responses, and, as the Irish say, “the horse is sold”…

  7. I have another explanation for why no one comes out and says this crap about Samsung, Google, Nokia, RIM, Microsoft or any other big name in technology, and why it’s all Apple, all the time, why Apple is the perfect link bait.

    Have you considered that MAYBE you hava a preference, or special interest in Apple? If this is true, then maybe, just maybe, people do come out and say all kind of crap about Google, Nokia, Samsung, Microsoft, RIM and whatnot. It’s just that YOU are not paying attention. Apple is the perfect linkbait for you. RIM? Why would you read about RIM at all, since you have no interest in them?

    When was the last time you read MacRumors? DaringFireball?
    How about MyNokiaBlog.com? Android Central? CrackBerry.com?

    • No, I don’t think that is it. For example: Take the Nexus Q. You do remember that one don’t you? HUGE promotion last year at Google I/O. Fancy 5+ minute video. HUGE Google fan reaction to the product (even if most did not know how they would use it. It had cool lights.).

      It was panned by the tech press (and rightly so) for lacking basic functions. It never made it to market and quietly died having never shipped. I never once read an article how Google had lost its mojo, was failing, on a downward spiral, standing still or failing to innovate as a result of the Nexus Q. But think about it. Should Larry Page had ever allowed that thing to be shown to the public in the shape the software was in? That shows very very poor judgment.

      Likewise, what new market shattering product has Google shipped since Larry took the CEO position? None (and copycat, 0 profit tablets are not market shattering products). Android was Google’s last “hit” (the quotes are because Android is a market share hit but makes little, in any, real money for Google) product and that was announced 5 years ago. Tim Cook has been pegged a failure because in less than 18 months, he has not created a new market from scratch that will drive an additional $50 billion/quarter to the bottom line. People seem to think the Apple II, Mac, iPod and iPhone/iPad line took place in a 7 year span of time.

      Page has had 20 months to break Google’s 5 year drought on new products and I have yet to read a single article on how Page is leading Google down a path of destruction and Google has seen its best days behind it. Apple is crucified for having the bulk of profit coming from the iPhone but Google is rewarded for having an even larger percentage coming from “search”.

      • There is a difference between the two companies, though. Google has, in essence, a recurring revenue model built into search. Apple has to sell more hardware to make its next dollar. An apples to oranges comparison (no pun intended) is pretty hard. In other words, if Page can keep the search hits coming, then Page is doing his job and increasing revenues and profits.

        • Except that Google’s cents-per-click rate is dropping rapidly, but nobody mentions it. Even during financial conference calls Google executives quickly shift the focus whenever this is mentioned. They always waffle or answer the question they wished had been asked. They very carefully never address this topic. Part of the reason for dropping ad rates is that the customers with the money to spend buy Apple products and, more and more lately, bypass Google’s search. An ever higher percentage of Google search users are Android owners – people with little or no money to spend and no inclination to patronize advertisers. Android owners are interested in “free” stuff, and that’s what drives their hatred and jealousy of Apple and its customers.

      • @Elia Freedman
        I think this is an Apple to apples actually and I also think your thought on:

        “There is a difference between the two companies, though. Google has, in essence, a recurring revenue model built into search.”

        Is dead wrong.

        Is this the source of the “gut” feeling about Apple? People fail to see Apple also has a very strong recurring revenue model built into all of their products. Any Apple product is a gateway drug. I see people all of the time with an Android phone listening to music on their iPod/iPod Touch. Why? I never see someone with an iPhone listening to an Android PMP. There is a level of stickyness to Apple products that goes deeper than any eco-system since MS-DOS/Windows.

        Just like Page has to keep the search results coming, Apple needs to keep nice phones coming. 6 of one, one half a dozen of the other. Hardware/Software systems for Apple. Server/software systems for Google.

    • I appreciate your comment and on the surface, I see where you are coming from. But I do follow all of those sites (not the Nokia one, though, I’ll check that out) and we have software for Android and BlackBerry, as well as iOS.

      There was a time when Microsoft was treated the same as Apple now, although I think Apple’s more tight-lipped approach allows for more “unnamed sources” stories, which leads to tons of rumors and innuendo.

    • just maybe, people do come out and say all kind of crap about Google, Nokia, Samsung, Microsoft, RIM and whatnot.

      Well go ahead. Post the links. Point us at these these repetitive, always wrong stories about Google’s performance. About RIM’s performance. About Samsung’s performance. Find us the blatant rumour mongering claiming that Samsung is going to be knocked off it’s perch any day now. Get me the regular articles complaining about Google having “lost it’s mojo” or no longer “being cool”. We’ll wait…

  8. We all agree that success is partly down to luck. Call it X percent. What you think of Apple’s future depends on what you think is the value of X. If you are young and inexperienced, you probably think it’s low, so Apple must have mainly suceeded on merit, which means it will continue doing well. As you get older and experience the world, your estimate of the role of luck rises, so Apple is riding a lucky streak which will inevitably end.

    • That is grossly oversimplified, condescending and simply wrong. Anyone who has a grasp of Apple’s history for even the last 15 years knows luck has nothing to do with Apple’s success. A company built entirely on one product may need a healthy dose of luck, but that company is not Apple. How many markets does Apple needs to reinvent/reinvigorate to prove that it’s Apple’s philosophy that is the reason for it’s success, and not fashion or happenstance?

      But kudos for trying portray Apple denigration as an inevitable result of a wizened veterans insight. There is always a healthy streak of narcissism in those trying to convince the world that Apple’s success is an illusion.

    • This strikes me as “magical thinking” and just plain ridiculous. You are couching what is basically a gut feeling, in language that makes it sound more like statistics or science.

      You might just as well have said … “I have no real reason to be, but I’m worried.”

    • Pete: My first Apple was an Apple II. I’ve seen Apple rise, fall and rise again. I’d never thought ‘luck’ played an especially large role… at what age will I acquire this wisdom you speak of? Will it be like puberty?

    • I’m convinced that luck is a huge component of success for a young company. I’m not as convinced that luck is a significant factor for mature companies. It seems that most mature companies die by their own mistakes, whether literally screwing up or not reacting to market changes. Besides, if we want to talk cliches, any pro athlete will tell you that you make your own luck. :-)

    • @pete what are you trying to say? can you phrase it another way? i am neither young nor inexperienced….and i dont see the strategic vision and planning of Apple’s undeniable success to be a matter of luck. at all.

  9. Congratulations to Elia on building an Apple Trope Trap. The Picasso quote and a reference to the Lisa in the comments is inevitable.

  10. Blows my mind how in attempting to refute this piece, most of these “Apple is doomed” comments are basically proving your point.

  11. Google makes zero profits selling’ Android. Samsung makes good profit selling large varieties of Android. Apple make huge profit selling limited variety of iOS.
    Profit is name of the game, not which is larger platform.

  12. If people believe that that Apple is doomed, that’s fine by me. But then don’t tell me Android is winning-after Google testified in court that they make no money on it and Amazon is going to rule the world when their P/E ratio is reached in 2700 years.

  13. “What interests me more is why does this stuff keep happening in Apple’s name? No one comes out and says this crap about Samsung, Google, Nokia, RIM, Microsoft or any other big name in technology. It’s all Apple, all the time.”

    Are you kidding me? Only Apple gets this kind of abuse?

    Bloggers have been bashing Microsoft on Surface sales, Windows 8 sales, Windows Phone sales.
    Bloggers have been bashing the entire PC ecosystem for years – “It’s a post PC world” – give me a break.
    Bloggers have been bashing Android for years – “too many types of devices, to few devices, to big, too small, sure marketshare is huge but they don’t make any profit, etc.)

    Seriously, Apple get’s picked on just like every other company, just as Apple is praised to the extreme.

    You also have to take into consideration that the flow of news and information is much much larger now during this crazy growth of Apple than their was when Microsoft has their crazy growth. You see more new, simply for the fact that their IS more news and more access too that news.

    Companies get popular and grow fast, companies get un-popular and shrink fast – if you think Apple is beyond that trend you are wearing some nice blinders.

    Apple is a short-term product company – most of what they do is short-term focused. Microsoft is mostly a long-term company and has proven their success with continuing to have record breaking sales and profits 20+ years later.

    • I don’t agree with everything you said but you make a point about news volume. Given that, though, I don’t see the blind quotes and unnamed sources used for other companies. The Microsoft/Surface stories, I believe, were based off analyst numbers and Microsoft’s own Windows 8 data released publicly, not an unnamed source saying Ballmer’s pissed.

    • Microsoft has created no new significant revenue generators in the past 15 years. Apple has created three–iPod, iPhone and iPad and they are still a highly profitable PC maker. Even more importantly, Apple has created a vast and highly lucrative (for 3rd parties) ecosystem around their Mac OS and iOS devices.

      Apple bought NEXT in 1996-97. That kernel became the core of the iPhone in 2007, ten years later. The iPhone fit into the entire Mac, iTunes, podcasts, Apple retail ecosystem like a hand into a glove.
      There is nothing short term about that kind of product development.
      Now compare the the “development” of Windows mobile/tablets over the same timeframe. That is a beautiful example of short-term product development.

      • Microsoft has 13+ divisions making a minimum of 1 billion dollars per year. Apple has 2 or 3 divisions making more than a billion per year.

        Sorry, but yeah, Microsoft has created a lot of significant revenue generation products. How many other companies do you know of with that many products have had that much success in the past 15+ years?

        iPod was very popular, very fast and it is now very quickly losing demand.
        iPhone is still selling strong and fast, but Android is catching up and passing by it fast
        iPad is starting to see some very strong competitors as well – both on the Android side and Windows side – it’s just a matter of time.

        Is Apple going away anytime soon, heck no. But to say they are the only ones being picked on is ridiculous.

    • Bloggers have been bashing Microsoft on Surface sales, Windows 8 sales, Windows Phone sales.

      Because those numbers actually have been crap. The marginalisation of the Windows phone is a fact. The lack of sales results for the Surface is all but assured.

      The problem that many a commenter is seemingly incapable of grasping isn’t that people are talking trash about Apple, it’s that they are talking demonstrably wrong, hallucinatory nonsense about Apple over and over and over again, then referencing themselves as evidence that their claims are valid.

      You don’t like iOS? No one cares. But if you couple that dislike with bold assertions every single quarter that Apple is going to stumble (it hasn’t) that the competition is going to make Apple irrelevant (it hasn’t) or that the stock price, manipulated by the whim of a system entirely disconnected from Apple’s performance, is an indication that Apple is in trouble (it isn’t) then what you have is strident claims that don’t hold up to scrutiny and deserve a vigorous drubbing.

      Apple has been hitting them out of the park for over a decade. Yet every time Apple releases a new product, it’s accompanied by articles in the tech press going back 30 years to the fucking Lisa as evidence that Apple isn’t perfect. Where are the regular articles about Google Buzz every time Google makes a move? You might get offhand comments but you sure as Hell don’t get the laundry list of Google’s failed initiatives every.Single. Time. Google releases a product.

      Bloggers have been bashing the entire PC ecosystem for years – “It’s a post PC world” – give me a break.

      For the number of years since Jobs mentioned it at the introduction of the iPad. It wasn’t that big of a deal in 2007 when it was originally mentioned. And what has actually been going on is a rigorous, nearly frantic obsession with proving Jobs wrong about Post PC even as it comes to pass. Of course it’s easy to pretend we don’t live in a post PC environment when the dullards insist that “post PC” means PCs have to disappear. But it’s always easier to pretend someone is wrong when you argue against what you imagine someone said that what they actually said.

      • People — commentators, bloggers, analysts — believe what they want to believe and say what they want to say. That’s nothing new nor would I expect it to be any different for Apple. If an analyst wants to believe Apple is going to fail because the Lisa was a failure, that’s fine. It’s the analysts opinion and it is he/her right to share it on a blog post.

        That’s not what I’m talking about in my post, though. What I’m specifically talking about is the amount of made-up stuff about Apple, using the guise of “unnamed sources” and other journalistic red herrings. That seems to be epidemic (not to use that word loosely, which I am). These red herrings play on the general perception, the gut instinct if you will, that Apple has been lucky and will return to its loser ways any day now.

        I don’t begrudge anyone for thinking Apple will or won’t succeed. But I’d hope they’d use some facts. The gut instincts of many regarding Apple are way off.

  14. I think you miss the obvious answer. People have been wrong about Apple over and over again. They thought Steve Jobs couldn’t turn things around; they were wrong. They thought the Mac was decisively beaten by Microsoft; they were wrong. They thought the iPod would fail; they were wrong. They thought the iTunes Store would fail; they were wrong. They thought Apple Stores would fail; they were wrong. They thought the iPhone would fail; they were wrong. They thought the iPad would fail (in fact, the internet erupted in anti-iPad hysteria for months, in an unprecedented outpouring of stupidity); they were wrong. In each case they weren’t just a little bit wrong, they were massively, unprecedentedly wrong. They predicted complete failure and Apple responded by making history.

    Now, people don’t like being wrong. They don’t like being wrong once. They don’t like being wrong a little bit. In the case of Apple, there are numerous pundits, analysts, journalists and onlookers who haven’t just been wrong about Apple once, but over and over again, and not just a little bit, they’ve bet against things that went on to set records. They’ve dismissed things that transformed whole industries. This is infuriating. People do weird things when they’re this wrong. They start to only see signs that maybe, perhaps they were right after all. Their minds twist all the good news so that it seems bad. Every little misstep is blown up into huge proportions. This makes them liable to be wrong yet again, making matters even worse. I think what we’re seeing is not “failing the gut test” but massive, unprecedented displays of unchecked resentment by people who have publicly humiliated themselves over and over again.

    Apple has made a lot of people look bad over the years and now they’re using this short time period before Apple reports its holiday earnings to feel good about themselves (last year exactly the same rumours circulated about the 4S as we’re seeing about the 5 now). They gloat and crow that all signs point to Apple failing, before they slink back into their pits of shame. These are broken men and women who can no longer think rationally about the subject. They’re trapped in a never ending spiral of gloating over Apple’s impending doom and being proved wrong yet again. It just makes it worse and worse for them. The resentment is palpable.

    • ” They thought the Mac was decisively beaten by Microsoft; they were wrong.”

      Hmm. Interesting one. Really, the old Motorola Mac WAS beaten. And Apple were beaten. You can make a very strong case that what really happened is that Jobs’s NextSTEP emerged as a company to beat the PC, and bought up the Apple name to do so. And NS/Apple were able to do so because of the emergence of the internet. Why? Because it generated a world in which many (then most) people’s daily computer activities were platform-independent. From 1995 to 2005, we shifted from having most of our computer activities be on apps that were tied to a particular OS to doing stuff that could just as easily take place on Windows, Mac or Linux. This is what allowed the Mac to become a viable format again. (Or its new OSX incarnation, anyway, whose ancestry was NextSTEP, not Apple proper.)

      There is no question, however, that Apple (mk 2) were far more visionary than Microsoft about how to exploit the technologies of compressed sound files and mobile comms tech. I suspect that when you operate as an entrenched monopoly you become lazy thinkers about new possibilities.

      • It’s not that OS X and Apple were rescued by people turning to internet activities on their computers, making Windows irrelevant. It’s Microsoft’s failure to adapt.

        From the beginning of the PC, the vision was to be able to run Unix on a consumer affordable computer. But cheap personal computers didn’t have the resources to run Unix, so stripped down, compromised languages were invented, like DOS and CPM and BASIC. As more and more resources became available in consumer affordable computers we eventually reached a tipping point where those crippled microcomputer languages designed to run on 8K of RAM became obsolete. The golden fleece had been found. We could finally run a real computer OS on a consumer priced computer.

        Microsoft’s reaction to this was to try to make DOS emulate Unix – to hang more and more bells and whistles on an OS that was designed to do much less than it was being asked to do. One of the main flaws in this strategy was that DOS was designed from a security standpoint as a single user, isolated system. It couldn’t cope with the demands of internet security requirements. It became the hapless victim of every internet thug who could afford to buy a root kit program.

        Apple’s response to the same situation was to embrace Unix as its new operating system. This required two things – abandoning its legacy, non-Unix OS, and creating a new, user friendly graphic interface for a Unix variant it created. Apple did a superb job on both counts. It then took about 5 years for a significant number of people to see the light. But once the OS X train got rolling it basically put Microsoft out of the consumer OS business. Microsoft is now relegated to serving the enterprise, where volume is ever higher, and margins are ever thinner. Meanwhile, Microsoft tries to keep its elephant-on-stilts OS from toppling over and crashing ignominiously. It’s almost out of ideas and energy.

        • Your answer would carry more weight if it were in accord with the facts. This, for instance:
          “But once the OS X train got rolling it basically put Microsoft out of the consumer OS business”

          …this is just plain wrong. There are more home users of *Windows 7* than there are users of OSX, let alone the other Windows flavours.

          If you’d said that *iOS* was now threatening Microsoft’s consumer OS market, you might have had an interesting (and plausible case), inasmuch as many people are now turning to iOS devices as their primary means of accessing the net at home (and elsewhere).

          As an aside, I didn’t say that the internet made Windows irrelevant; it’s that for most people, Windows became inessential. These are not the same things.

          Microsoft also have a much harder task than Apple (or have set themselves one) which is that they prioritize backwards-compatibility, and they have a LONG backwards compatibility horizon. Businesses depend upon them, so they’re shackled more than Apple are by the strictures of past design flaws. Apple have had tabula rasa by contrast, especially when it comes to iOS. (Apple drops support for 5+ year old tech all the time; as a hardware company, and a non-enterprise company, it makes sense to do so.)

    • I honestly think, as far as media coverage and vocal “geek” opinion (as opposed to stock manipulation, which is an entirely different ballgame) that this has more to do with it than anything else.

      There are quite a few people who were somewhat or very dismissive of Apple’s products, in some cases dating all the way back to the ’90s (or earlier). And while that worked fine through the pre-Jobs return, over and over again most predictions of doom have been proven by reality to be not just wrong, but wrong on a truly, historically massive scale.

      The iPod wasn’t just not a failure, like it was marked by a chunk of commentators as, it wiped all competitors off the map and made Apple into a consumer electronics powerhouse. The iPhone wasn’t just not a failure, like the more pessimistic commentators market it as, it completely rewrote the way that handheld computing worked. And five years later, while it doesn’t have a Microsoft monopoly, it hasn’t shrunk to a tiny ’90s-Mac-like market share, it continues to be a large player and taking a disproportionately huge chunk of industry profits. And the iPad, which was roundly mocked by many of the same people, looks to be well on its way to changing the entire personal computing paradigm, whether it ends up the market leader or not.

      These aren’t small failures in predictive judgement, they are failures of the most incredible and epic scale.

      And the simple fact is, when most people are extremely wrong about something like that, their response isn’t “I made an error in judgement.” It’s “The world made an error in judgement, but wait a bit, and eventually it will figure out that I was right.”

      Frankly, it’s been over a decade, so even if Apple collapsed tomorrow, it’s too late to call it a flash in the pan, and the moving mountains has already been accomplished–computing is not now what it was five years ago, and never will be again.

      But for the people making these comments, the “injustice” of being so incredibly, provably wrong is no doubt enraging, so they are always looking for an opportunity to make reality fit their desired worldview.

  15. Another possibility to consider is that what distinguishes Apple from the other companies mentioned is the constant volatility of the stock price. Even when Apple had a much smaller market cap there was much more volatility which of course allows financial hedge funds and their ilk more opportunities to play the stock. These “stories” you mentioned about Apple are usually whispered by the analysts from these very same hedge funds in order to swing the stock’s volatility in whichever way benefits them on that particular trade. For example the recent massive drop is because an a very large options position is going to expire on the 19th of January, and it will mean a loss of alot of money by hedge funds if Apple’s stock price is higher than $525.00.

  16. I use Apple products and have since 1984. I’m an Apple investor.  And my gut, too, finds it amazing and almost impossible to believe that this one ‘little’ company has experienced so much success.  Having said that, I read everything I can get my hands on regarding Apple, and it appears that conditions are right for the company to enjoy much more growth in coming years. 

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