What Should Apple Do Now?

A question from a reader deserves a serious, thoughtful answer – so here goes.

My last posting on Apple prompted a question from a reader that deserves more than a quick note on Disqus. While I briefly covered what Apple Inc. might do a few months ago, let's take a more detailed, consultant's-eye view of this question - one that is, after all, of more than passing or academic interest to many if not most of us. A huge number of people, and I'm one of them, depend upon Apple products for both our work and personal lives, and a technology supplier without momentum is like today's Microsoft - don't count on valuable innovations. Once Microsoft lost my confidence and my attention began to wander, I moved on - and no supplier should ever allow that to happen. Happy, visible, repeat customers are essential to growth and success.

Let's begin, though, by defining that success. All enterprises (really, all organizations) have one primary mission - serving a customer. In a competitive marketplace, which I wholeheartedly endorse, BTW, unhappy customers can and do go elsewhere if they're not getting what they're after. Any business, of course, has to deal with all kinds of issues related to suppliers, employees, investors, and, of course, the market and competition, but that's the game. Despite occasional extreme ups and downs, Apple has historically done a great job in all of these dimensions, growing its reach, influence, market share, and stock price via happy customers, who, BTW, have often been accused of overpaying for a logo. I disagree with that one - quality and value have their price.

But, it seems, that since the death of Steve Jobs Apple is no longer perceived by very many as a leader, innovator, or insanely great in any respect. Indeed, the company's actions have turned decidedly conservative, and such likely doesn't merit the stock price they even have now. Growth? Market share? I'm not seeing how they get there with wimpy products and warmed-over marketing.

How to fix this, then? First, let's agree that Apple's primary mission today is as a designer and vendor of consumer electronics and provider of related services. With the consumerization of IT (CoIT) now well underway, the firm's role with organizations of all sizes is also significant. Let's do a brief, back-of-the-envelope, SWAG (scientific (?), wild-assed guess) SWOT (strengths, weaknesses, opportunities, threats) analysis of the situation, as follows:

  • Strengths: Loyal customer base (across essentially every product line), leadership position in media players, PCs, tablets, and handsets, leadership position in systems and some applications software, leadership in media and software distribution, strong retail presence, strong brand image.
  • Weaknesses: Perception of lost momentum since the death of Steve Jobs, wimpy recent announcements reflecting only incremental improvements, maturing (although not yet saturating) smartphone market, fading reputation as an innovator, stagnant equity price.
  • Opportunities: Emerging cloud services, could broaden into other consumer electronics products and services (also benefiting in the enterprise from CoIT without too much additional effort), vast cash hoard that could be used for acquisitions.
  • Threats: Competitors (Google, Samsung, Microsoft) also establishing an "ecosystem" approach to consumer brand loyalty, leveling technology playing field, many directly-competitive products and services already on the market, clear dominance of Android at present, dependence upon competitors as component suppliers.

I previously noted that I think Apple should get into other consumer-electronics products (TVs, home theater, home media rooms, cable boxes, cloud computational services and home servers, home and personal security, energy management, and more, perhaps even including such services as unified communications, banking, insurance, and travel, broadening their ecosystem even further. In short, they are ideally positioned to be a player in any aspect of technology-based consumer services, which includes anything requiring electrical power or living on the Web. They could even get into the distribution of other products and services - challenge Amazon, or at least some of Amazon? Maybe... Apple has the smarts in products (I still believe) and the distribution; what they need now are synergistic new directions. They should take the blinders off. They dropped "Computer" from their name years ago; similar historical limitations should be re-examined and likely discarded.

The core problem, though, is that Apple seems adrift. Those wimpy announcements (Fingerprint reader? Really? That's supposed to be news? It's not even news that it's already been hacked!) give the impression that there's really not much that the company can do at this point. No management team can afford to leave such a taste in the mouths of customers and prospects. Samsung and Google (and Amazon) won't stand still, and a new management team at Microsoft just might re-energize that company as well, although I'm personally not counting on it. No matter - there is enough innovation at the competition and enough interesting needs to fill in the market that if the current management team at Apple isn't going to take risks and make investments - the very essence of business and thus business success - then they should be replaced. That's happening at Microsoft now - imagine if Microsoft had split up years ago; we'd likely see Office on everything and the economic benefits to all from just that alone would have been much, much greater. So it's really up to Apple's Board of Directors, and if I were a member of that august body, I would be raving pissed off at present. An iWatch (or an iPad with the fingerprint scanner)? Really, that's the hot rumor? That's it? B-o-r-i-n-g - Apple doesn't need another billion in sales (and I'm being generous here - they're not going to sell $1B in watches); they, like any firm, need to double sales. They need to think big. Mr. Jobs would be horrified at what his baby has become today.

Yes, IMHO, Apple is losing it - their edge, their image, and even some customers. But, as I said earlier, it's not too late - at least not yet.

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