In the last 8 weeks, $165bn has been wiped from the market value of Apple. The decline began in mid-September; following an all time high of $702, stock has dropped to $543.94. The total market value loss is equivalent to the entire value of the Coca Cola company, a frankly astonishing figure. What may be more astonishing is the fact that Apple can absorb such a huge loss without breaking a sweat. More surprisingly, the drop has come over a period that has seen the release of 5 brand new products, including the iPhone 5, the iMac and the iPad mini.
Perhaps the most obvious reason for the drop is the looming “fiscal cliff” in the USA. Investors selling Apple stock face a 15% tax bill for selling now, with a possible 35% bill if they wait until January. The fear is that the fiscal cliff will bring with it a sharp increase in dividend tax rates, making companies like Apple, with high dividend yields, a much less attractive investment.
The financial reasons may offer a good explanation, but I’m not sure they tell the whole story. I think that there may be reason to believe that Apple’s shift away from innovation is causing it to lag behind some of its competitors such as Samsung and Amazon.
Over the last decade, Apple has released a string of revolutionary products that have altered the technological landscape irreversibly. It began with the iMac G3 in 1998, an incredible piece of engineering. Perhaps the most significant release, the iPod, came in 2001. There was the iMac, Macbook and Macbook pro in 2006. The iPhone in 2007 and the iPad in 2010. All of these products were game changers, and they’re still fantastic today. However in more recent years, it appears that Apple may have strayed away from trying to shake things up by breaking into markets with revolutionary products, and is instead trying to slowly evolve the products it already has.
Throughout its lifespan, the iPod has remained essentially the same, the earlier nanos, minis and shuffles were based around the same basic clickwheel design that put your entire music library into your pocket. The iPod touch is essentially an iPhone, without the cellular capabilities, and so I’m not inclined to put that down as an innovation. The touch screen nano was essentially a very small iPod touch, and whilst it was kind of cool, it didn’t really push the boundaries that the original iPod did. In assessing these products, I’m looking for innovation on the scale of the iPod, iPhone and iPad as they were on first release.
The iPad, hasn’t really changed at all, it entered the world as a sleek tablet, and since then, it has received very minor tweaks each year to make it better. I admit that some of these tweaks have been really significant, like the Retina display, but the iPad of today is still the iPad that was released just under 3 years ago.
For example, look at the iPad below, I bet you can’t tell me which generation it is…
The iPhone has evolved in a similar fashion to the iPod. Again however, the iPhone 4S was still essentially the same as the original iPhone. To be quite honest, the iPhone 5 is really just a 4S with a slightly larger screen, a big improvement yes, but there’s still not a lot to separate it from the original iPhone. Like the iPod, the iPad, the MacBook pro and the iMac, the iPhone has remained the same product at heart for a long time, and that’s cool, because Apple has gradually been making these products better with each passing update. (You’re probably wondering why I’ve left out the iPad mini in all of this, and that’s simply because I feel the same way about the iPad mini. I’ve gone into great detail about that here, so make sure you read that article before you judge me on that one… )
Now, that line of thought was fine, whilst people were still enchanted by the awesomeness of these new products. However, now, these products are all well established and successful. Everybody knows about them, and I’m beginning to think that some may be feeling a little desensitized towards these products, and as a result, Apple as a whole. Regardless of how good each new update is, I’m always confronted by people who complain that Apple just hasn’t done enough to make their products enticing and attractive. There was a time when I would dismiss these people as ungrateful haters, but now, I’m starting to see where they’re coming from.It would be very easy to point the finger at Apple and say that – having hooked a substantial base of followers who want to buy Apple products – Apple is now simply trying to squeeze as much money as it possibly can out of each one. By putting less time and effort into new products so as to push boundaries and pull in new customers, it can focus on fleecing the ones it already has. Now, I understand that this is a pretty stark outlook on things, but it’s very possible that these feelings could escalate if Apple continues in a similar vein.
Personally, I don’t feel quite so disposed against Apple, I admit that it hasn’t brought us the revolutionary products that some people may have been expecting in recent months, but there’s definitely still time for Apple to amaze us all again, which I hope it does, because I’m beginning to think that Apple might just be pushing its luck a little too far. What about you? Is some iPod-style innovation long overdue from Apple? Or are you happy for Apple to focus on making the products it has already created better and better? Let me know in the comments below, and be sure to hit me up on Twitter @TiP_Stephen.