Is Apple losing its innovative touch? [Editorial]

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.

Yikes…

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.

 

 

 

 

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  • ChintanTrivedi

    ‘revolution’ doesnt come year after year….would be silly to expect any company to keep on delivering revolutionary products year after year, even for apple….they just need to lead the evolution phase which i think apple is lacking in last year or so….

  • jabombardier

    I still believr that apple still makes great products. I do feel that this time around that Google’s android has upstaged apple’s ios in terms of feature and customization but a well working and smooth running OS android is not. This is where Apple has the advantage still. This reason is prompting me to leave android and join the ios club.all i can say for apple is to try to make ios like a “lite” version of Mountain lion. Also open up the eco system a bit. It will give apple a good run against android.

  • ChrisCall

    According to that image the share price of Apple has dropped $100 Billion since September…I understand what they mean, but that is nowhere near correct.

  • MarcOKelly

    Apple hasn’t changed much they always release products with the next one with little improvements, I guess just more people are noticing and all those fake rumors didn’t help either.

  • ChrisCall

    @MarcOKelly I can’t agree with that. The iPhone was a pretty revolutionary product. So was the Macbook, and the Macbook Air. I can’t even really say the current products aren’t revolutionary – they just aren’t in the eyes of the general consumer. Look at the engineering that went into the Retina Macbook Pro – everything is where it is for a reason, and every reason has a strong purpose. People criticized it for not being repairable, but come on people, sit back and just take in the internal design.

  • MarcOKelly

    @ChrisCall That’s not what I meant sorry. I meant after the products are initially release look at the next one, what was the second version of the Mac book air, it was faster and better battery life. They always make the next one faster than the last, while keeping same or better battery life. Even with the original iPod of course it was revolutionary but the next iPod not so much. Apple always will bring out the crowd pleasing products, but don’t expect the next iPhone to change all that much. That’s all I was trying to say.
     
    p.s. the new Macbook Pro looks absolutely stunning inside and out, I just haven’t had the chance to use one. I love their pcs but I can’t use them do to the lack of game developer support. I love playing pc games.

  • randomprice

    That’s the 1st gen iPad. Correct?

  • ChrisCall

    @MarcOKelly Okay I understand where you were going now. Exactly, that I can get behind, it’s really difficult to take a previous invention and innovate on that. Look at cars – even now they are more or less the same as they were when Ford was pushing them off the assembly line.

  • randomprice

    Oh, and yes. I agree with you. Lack of innovation is starting to show. Hopefully they will come out with something spectacular next year.

  • MarcOKelly

    @ChrisCall Cars have been around a lot longer than the iPhone and have gone many through many decades of technological advances in manufacturing and other things. But with apple 5 years hasn’t had much technological advances except the retina screen, so maybe 5 more years from now apple will release a new iPhone that will have the same effect as the original, look at the iPod it took 6 years for the iPod to have a revolutionary change with its touch screen and a web browser that no notible mp3 had making it just as amazing as the first.

  • ChrisCall

    @MarcOKelly Why are you debating with me when I’m agreeing with you?

  • RaduTanasescu

    Why are you even writing for an Apple focused blog? You sound like an Android fan bashing Apple for “lagging behind” and “not innovating anymore”. They’ve been the only company to really innovate throughout recent history. You can’t expect them to change the game all the time.
     
    Yeah they’ve been less innovative but all their products are evolving, the new iMac looks grate, it may not be the next big thing but it’s a good product (well unless it turns out having some major flaw, but I don’t think it will).
     
    Apple computers have been evolving into better price / performance, the lowest mac mini model is reasonably cheap and it comes with decent specs.
     
    The iPad mini is not a revolution, I wouldn’t even call it evolution but it seams to be doing grate.
     
    The company is still ahead of everyone, after using a 2010 Macbook Pro for about two weeks all the other laptops feel like toys. The plastic Galaxy S III seams like a great device but honestly, it’s not game changing, I’d rather hold on to my iPhone. Maybe the Nokia Lumia could offer the same built quality as an iPhone but IOS is a stable ecosystem where everything works. Windows Phone 8 is not. It’s in it’s infancy.
     
    Now, will Apple remain ahead? For a while sure, but eventually everyone else will make great products too, Android is quite good these days and it can certainly get a lot better. But honestly, until someone comes up with a product that changes any industry that Apple has changed in the past, I’d say Cupertino has nothing to worry about.
     
    Stocks were too high, no one expected them to grow more so demand shrunk, and with less demand comes a lower price. It’s not rocket science.
     
    Tim Cook still needs to prove that he can deliver a game changing product but there’s still plenty of time for that. Steve Jobs was unique, not everyone can change the game once every few years. Perhaps until the next incredible visionary comes along, no one will, but it will be pretty hard for Apple to “Lag behind”.

  • Brandon M

    Apple’s amazing streak of renovation was entirely driven by Steve Jobs mortality. But, I’m sure he left Apple with some insite into where he thought things were going since he was and has been a driver of that tech for longer than many people know of. Even during Steve’s time Apple realeased products on a “Tick Tock” Cycle based on their expected upgrade cycle (cells phones every two years, iPads every three years) after the first pioneering model was introduced.
    Original iPhone = Revolutionary Product
    iPhone 3G = Tick (refined design)
    iPhone 3GS = Tock (ungrade of refined design)
    iPhone 4 = Tick
    iPhone 4S = Tock
    iPhone 5 = Tick
    Apple was never focused on making the most revolutionary products possible, it was focused on making the “Best Products Possible”, if that means revolution is needed then it was designed into the product to make it the best experience it could be.

  • TiP_Stephen

    @randomprice Correct ;-)

  • TiP_Stephen

    @ChrisCall No, according to the image, over $100 billion has been wiped from Apple’s market value. It’s actually $146 billion, sorry for any confusion.

  • ChrisCall

    @TiP_Stephen  @ChrisCall No, the image says that the “share price” has lost that value. The current share price of Apple is around $560 and has never been even close to that high. You’re talking about market value of the company, not the price of a single share (share price).

  • ChrisCall

    @TiP_Stephen It’s Reuters error, not your own. I was just pointing it out.