The real challenge is that Apple has unwillingly changed its business model from as the visionary innovator to a defender of its share in a rapidly saturated market.
Apple’s legendary success story originated from Steve Jobs’ inventions, IMAC (1998), IPOD (2001), ITUNES (2003), IPHONE (2007), APP Store (2008), and IPAD (2010). Over this 12-year period, Apple stock has soared by 5500% ($1 to $55). Since Tim Cook took over CEO in 2011, the releases of IPD mini (2012), IPD RETINA (2012), and various iPhone model upgrades, including iPhone SE , iPad-Min and most recently iPhone7,i, have increased the stock from $55 to $120, over 215% return over the 5-year span.
Whenever Apple found themselves in a position that they needed to come up with products to react to their fierce competitors, the end results have not yet been blockbusters. A few examples would be iPhone SE to replace iPhone 5c, iPad-Plus to buoy flagging tablet sales, Apple Watch to compete with Fitbit, iPhone 6 to Samsung’s Galaxy, and Apple TV to Smart TV. MacBook needs complete face lift, as no significant design changes in years. Apple has also trending to pursue Artificial Intelligence but lagging far behind Google and Amazon. Apple attempts to break in Netflix, HBO, and Hulu’s turf and not yet saw success. The same goes with Fitbit’s wearable.
While comparing iPhone 7 to iPhone 6 feels like comparing apple to apple, Apple fans want to believe that Apple is preparing a grander iPhone overhaul for 2017 to commemorate its iPhone’s 10th anniversary.
Naturally, we all like to compare Tim Cook to Steve Jobs. Both have shared the same high expectation. Steve Jobs was genius and passionate in product idea design to “provide the simple solution to complex problems.” Tim Cook has got Apple out of an operational and financial mess. As Steve Jobs practically invented the smartphone industry 10 years ago, Tim Cook, without Jobs’ charisma, has been able to turn Apple into a supply chain giant, commanding the entire smartphone and tablet market.
The bigger issue Apple has to face is that it appears that iPhone has fallen out of favor with teens. Minor upgrades on the old design for Version N+1 seems boring. Teens don’t think Apple isn’t “cool” anymore.
Apple may become the victim of its own success. As Apple’s logo is everywhere, it is easily associated with the popular new-aged words “the establishment.” Teens may refuse to own the iPhone7 as an act of rebellion.
In the U.S., parents typically passed their used iPhones to their kids and buy new ones for them. While first iPhone was launched in 2007, the “newer” models like Samsung’s Galaxy and Microsoft’ Surface was just released in recent years. The $700 iPhone7 will make Generation X and their kids, especially in Asia, think twice when compared with much cheaper Huawei, OPPO, and VIVO models, as new phones coming out of Samsung, LG, Huawei, and Xiaomi have been seen the best yet by tech analysts.
As Apple is facing the pressures from losing market share with teens, to Asia market, to Samsung and Microsoft, and to Android platform, Apple shareholders may legitimately worry the company does not have another blockbuster, innovative, and revolutionary product in the pipeline to replace the iPhone which drives two-thirds of Apple’s sales.
Where is the next Steve Jobs for Apple?