Coincidentally it was today that I was discussing at the Mensa with Gaurav(The Rt. Hon. Editor:)) that we must use the blog to take our class room discussions 'offline' and Lo we had "Apple" to discuss as a part of our Innovation management Case Study.
First I again reiterate ,I Love my iPhone!I switched my half decade+ loyalty from Research in Motion to Apple(Frankfurt converted me! Frankfurt they say always gets to you!),but at the same time as some one who is just passionate to keep track of technology and technology trends I must say with utmost humility, things do look very bleak for Apple,if they dont mend their ways!(pardon my Arrogance but I intend to make my case here)
First let me start with the irrational exuberant' :)! who quote Apple stock prices over the last one year to say that things are very bright at Apple;
1.There has always been a run up in stock price towards the Macworld announcement linked to the Holiday Shopper(Thanksgiving&Christmas Sale) (also with amazon & pleasebuymymommymadesnacksforyourpet.com)
2.iPhone had a bit of accounting 'surprise' for 2009(good ole Zaks : actually bad creative accounting! their stock prices could have rallied much much earlier,they had the best free cash to price ratio in the Industry!) they 'moved' their accounting standards(Refer accountancy binder), so much of what happened this year on their stock prices was infact not a reflection of what is in store for the future but more to the fact of adjusting with 'REALITY'(read PAST)!
Apple is exhibiting the kind of overweening arrogance that is almost always cataclysmic in the long run to the entire technology sector. It is a well know fact that 'VICTORY' tends to breed abject arrogance.A backlash against Apple is not only inevitable but also some where in the near horizon, albeit will take time before it translates into its stock price.
1)Every developer who is worth his/her salt(read some one who can do atleast 36 Ctrl C Ctrl V per minute) is cribbing about Apple’s 'closed systems.Think about it 'Apple insists on locking non-iTunes music out of the iPod'.
2)There’s been crib about the reliability of the iPod line(add to the overwhelming fact of iPhone Canabalizing right into its own 'profitable' iPod market).
3) There has even been a corporate scandal swept under the carpet over stock option backdating, that the company has failed to explain candidly and which could result in serious legal problems sooner rather than later.
Yet somehow Apple continues to be viewed as an underdog and gets a nod on polemical issues that would subject other companies to flak and litany. Dell, for example, has received an enormous amount of flak for shoddy customer service(The best joke- Apple offers essentially no customer service without the expensive AppleCare service plan try to take your machine to an authorized dealer if it is under warranty its ok,but when try it with say a local dealer,he would not take the machine and bet you he would say that he has to ship it back to Apple, which would take him a week or two, and you might get your computer back in about 30-45 days.
Apple customer service will tell you that both you and Harry Potter don't exist especially if you hadn’t bought AppleCare; this for a brand-new computer that cost more than $2,000 and had what the industry refers to as a cut-and-dried factory goof up.
Similarly, the way Apple uses digital rights management software to keep iPod/ITunes as a closed system would be considered a blasphemy if tried by Microsoft. Apple is basically the only meaningful player in the online music business, but not to many people criticise because it faces plenty of competition from 'businessmen' at Chandni Chowk & Wangfujin Street.
Apple' strategic marketing and online sales of music in the European Union-in the EU as a single market, customers should be free to purchase goods and services from any member state. iTunes Stores restricted users to only allow the purchase of content from the country to which their payment details originate, which also forced users in some countries to pay higher prices(Brussels can you hear me!).In 2004 the British Office of Fair Trading referred the iTunes Music Store to the European Commission for violation of EU free-trade legislation. Apple commented that they did not believe they violated EU law, but were restricted by legal limits to the rights granted to them by the music labels and publishers. PC World commented that it appeared "the Commission's main target is not Apple but the music companies and music rights agencies, which work on a singular national basis and give Apple very little choice but to offer national stores"
It is a well known fact that Bill Gates’ arrogance had everything to do with the company’s legal problems(Btw I personally love Bill gates for two reasons one his Melinda Gates foundation and two he plays fantastic bridge online on BBO(bridgebaseonline.com) some times with his partner Warren Buffet who has never put a pie in any tech company but has put a lot of money to the Gates Foundation!). Every one hated Bill for his extremely aggressive business practices, and that attitude helped turn a lot of people against them. While the anti-trust case ultimately resulted in only limited sanctions(look its Simple! Bill didnt want to create a monopoly he just wanted to control the world!), it had all kinds of negative effects that a company with a bit of humility might have avoided.
Apple since time immemorial was a been there in the tech business, a volatile firm that couldn’t figure out how to leverage its technological strengths.
According to the 'valley' pundits,Steve Jobs, for his part trying to prove that his early success wasn’t a fluke, was relentlessly ingratiating in his efforts to make a go of Next Computer.Apple loyalists similar to dead heads(Grateful Dead) cult followers, could still be counted on to show up and cheer at MacWorld, and to spew venom on any one who differed in their views.
Apple was the anti-Microsoft, and that was enough to instill pride into the average techie!! Do check out the popular Anti Microsoft Ad of Apple (just google!):)!
in a nut shell what am I trying to say on AAPL,
1) Apple is staring at an empty R&D Cupboard which was infact the 'driving factor' all along(gegenuber)their time line
2) Their Distribution strategy sux! they dont stand a chance in India & China, thats the market for mass customization! the future!
3) They have serious Leadership sucession issues(any one who saw how aapl fared the day Jobs announced in public that it was not a small ailment but infact Cancer treatment) stands testimony!
4) Lack of Barriers to entry.
Lets now see whether I am going to open my mouth to change my feet(not that I have not done that in the past)!
V
P.S: Btw smokers who own an iPhone or for that any Apple product Beware your warranty might no longer be valid
P.P.S: the views expressed on this post is mine and my copy paste alone! so if any of you guys at Apple want to sue me! remember I am just a poor student who travels on S-Bahn using the free pass issued to him by his college!(btw 6 of my classmates are brilliant lawyers doing their MBA' so THINK!)
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