What do Apple, a volcano, a statue and an empire have in common? That’s actually kind of a trick question – different people have different opinions on which archetype Apple most closely resembles.
Lately, at least some people think Apple is an empire in decline, or showing signs of it. (Even as a certain influential dev-blogger who “started” all this has since updated his thoughts on the matter.)
I happen to think Apple, like all other companies, is a volcano (specifically, an active one in Apple’s case) – perhaps a contrarian position, who knows.
Many others think of Apple as if it were a statue – say, of Steve Jobs. Once crafted and honed to the pinnacle of excellence, and maintained/standing the test of time like the greatest of sculptures around the world. But, lately? Under continuous, merciless assault from the elements, a tempest or software sandstorm of Apple’s own making. Blasting away the sheen, the shine, and slowly, the statue itself.
Mav’s Volcanic Theory of Corporations™ and a Non-Expert’s Caution Against Perceptive Myopia
Apple suffers slings and arrows of outrageous fortune, magnified by the outsize attention given to an outsized company with, let’s face it, outsized admiration, respect, maybe even love that you just don’t see with most companies. It’s beyond question that Apple’s various mishaps and “fiascos” over the years have a corrosive effect on the company. I skimmed through “a few” of them recently.
But if the negatives wear down Mt. Apple, its magma builds it up. Makes it taller and that much more formidable. 2012-2013 growth pause aside, you can’t exactly say Mt. Apple as fairly evaluated by its financial trends is…well…shrinking. Not with that most recent iPhone 6 eruption at the very least. The elevation continues to increase.
Now, the last thing I’ll do on this blog (I hope) is ever doff my disclaimer of expertise. But I am possessed of a certain amount of experience and perspective, as well as interest in tech and its inhabitants. There are long-time supporters (developers, pundits, etc.) who are of importance to Apple. (And I’m a long-time Apple user of little importance, to be clear. :D). Let’s stipulate it’s a significant loss if these influencers turn away from Apple. But that’s only part of the story.
Yes, some despair that the Apple they once knew has changed for the worse (it’s not focusing enough, it’s running too many trains on a track that’s over capacity, it’s making repeated, embarrassing, clumsy, seemingly preventable mistakes, etc.). But Apple is, by revenue, about four times the size it was when iPad 1 first launched.
What’s that mean, beyond the money? The 4x multiple. That’s right. Many more customers than even five years ago. Go back to 2007, the birth of iPhone, and the difference in customer – and developer – base is even more startling.
No, the “old guard” of Apple customers, developers and ecosystem partners aren’t irrelevant, and Apple should avoid unnecessary disaffectation. But the Apple Tent is larger than it’s ever been. And, at great risk of oversimplifying and underexplaining – it may be presumptuous to project the laments of the old-timers upon the ocean of new, quite satisfied customers, as well as the developers and other ecosystem companies serving them.
Satisfied customers? Well, of course. You have been paying attention to Tim Cook’s customer sat updates, right?
Yes, many of those developers may be starving – but the enthusiasm is still there. And there’s more than one way to make money in the Apple ecosystem, as, say, iPhone accessorizers will tell you. (Pick a case, any case.)
Questioning the Empire Theory of Corporations
Look, I get it. Empires rise and then they fall, end of story. Supposedly, it’s accepted wisdom that no empire lasts forever. Studying the decline of empires, some sudden, some over long periods of time, is a fascinating and highly worthy pursuit.
Nokia resembles a fallen empire. Blackberry, a formerly burgeoning one. Motorola was once a tech powerhouse and household name. Samsung, a modern example of the empire in decline. Will Apple reach that tipping point? Has it crossed it?
Maybe “tipping points” are more like attractive narrative devices than discrete points of no return. Maybe I’m wrong, but I can’t point to one single event which precipitated the previous four companies’ fall from grace. Unless entire corporate cultures and behaviors count as tipping points.
Long-term success is hard, but that doesn’t mean that recovery from a mistake or series of them is impossible. One thing about many empires – they’re ancient history. It’s a much more cosmopolitan world, with much greater reserves of introspection and courage to change than in the past. Even if accumulated learning and new methods of doing business can’t stop the inevitable, the number of household-name, multi-decade, multibillion-dollar companies still in existence today would suggest that the better corporations will long outlive all of us.
Even if Apple is More Like a Statue, They Only Decay If You Let Them
Structures. Statues. Works of art. These days, they can be rehabilitated. Restored. To give a few corporate examples (focusing on the US only because that’s where I live, no slight whatsoever on international going concerns):
Disney suffered through its “What Would Walt Do?” moments. The mood was all kinds of dour when Michael Eisner left the company. It’s never been, well, happier with Bob Iger at the helm – though I’ll never get used to Darth Vader roaming the premises.
Of course, some companies run with an almost eerie ease, perhaps a testament to their calm, careful stewardship. New York Life has been around since 1845, and still going strong. You can probably add a few more banks or insurance companies to that category.
For others, they’ve seen better days, but on the whole, really aren’t that badly off. No, not HP – 103-year-old IBM, which for all its problems, is still managing revenue of around $100B and a healthy-seeming $16.5B in net income – obviously not growth, but also not a precipitous drop from its $107B peak in March 2012 on a ttm basis. IBM’s in the middle of a stagnation/(relatively gentle) decline phase, but it’s also under renovation.
Apple suffered terribly from its first disruption at the hands of Windows and inept management. Then, the rescue and rebuild that’s the stuff of business legend. Sure, Apple is flush with cash (which it should either return to shareholders at a still-greater pace or is wasting not acquiring Company or Technology X, depending on who you ask). Sure, it brims with confidence, and that’s never far away from pride, which goeth before the fall.
But I’ll close my home game thoughts with this. When Steve Jobs discovered there were still people in that wretched husk of Apple Computer that “bled in six colors” around 1996 or so? For that awful fiscal year, it rung in $9.8B in sales to the tune of a $816M net loss, with about $1.5B in reported cash and equivalents. It sold Performas. Apple was in the deepest kind of trouble, with a much smaller cadre of supporters, and it still got its second chance.
Apple Inc. today arguably outperforms every other company in its weight class. And with the emphasis on collaboration and overarching focus on products that enrich people’s lives, it would take a concerted effort to bring the company down even to IBM-esque levels of performance.
You might retort, but the bigger they are, the harder they fall.
I take the optimistic view. The more eyes, ears and souls dedicated to the company, the more devoted users, developers and ecosystem partners there are providing passionate, vociferous feedback, the more likely it is this wild experiment (of premium technology and “giving a damn” versus the forces of commoditization) is better protected against a second major disruptive attempt.
You never know, Apple just might hang around another century or two. Sure, it’s not like Apple’s a bank – but…