Analyst Watch: The Fall of Apple in Three Acts
By Rob Enderle
January 17, 2013 —
(Page 1 of 2)
Apple is clearly trending downward, cutting back on supplies as I write this, and its valuation is dropping sharply week after week. At CES this year, the typical shadow Apple casts over the show wasn’t in evidence, and Steve Wozniak, one of the living Apple founders, has been lamenting that even Microsoft is out-innovating the company. While there is no doubt there will be hills and valleys to this decline of a tech giant, it has and will occur in three noticeable steps if it repeats its prior fall, which now appears likely.
Act I: The Departure/Death of the King
This event has clearly passed but, as with the last time Jobs left the company, Apple appears increasingly rudderless and unable to make critical decisions or take important risks. Jobs, during his last term in the company, integrated himself even more deeply. In the 1980s, he drove marketing and the Mac; over the last decade, he drove everything and seemed to be a critical part of every major decision, from how a product was conceived, to the final design, to how it was marketed and sold.
He surrounded himself with experts in areas he didn’t know (like retail) and in skills he didn’t have or want to develop (like logistics). The result was a cohesive team with Jobs as the central hub holding it together. When Jobs left, Apple lost this hub, and over the following months, person by person, the key parts of the engine he was central to departed, were fired, or were left in their jobs without the guidance from Jobs they depended on. Yes, many of the early decisions had been made by Jobs before his departure, but most are done now; some, like the iPad Mini, were overturned; and the Apple of today is sharply weakened.
Act II: The Death of a Brand
Today, Apple releases new products to Walmart to be sold at sharp discount, or to be given away—with a phone contract—for free. Jobs designed Apple to be a premium brand like Porsche; the automaker was one of the design examples he used. As with all premium brands, the perception of the brand is paramount and never compromised with a value product. If the firm wants to do a value product, as Porsche did with the Mini, it does so under a brand that is not connected to the premium parent.
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