Food for thought: The spy who sold out
Forgiving a pretty face
Facebook to agencies: how will people share your story?
Is “The Pitch” an accurate reflection of our industry?
Is Apple on the verge of becoming irrelevant? I know, it’s heresy to even express such a thought. First, let me be clear, this is not an anti-Apple post. I’m actually a huge Apple evangelist. I love my MacBook Pro, iMac, iPad, iPhone, etc. My wife loves her iPhone. My son loves his iPod Touch, which is full of songs downloaded from iTunes and apps bought from the app store. My five year-old daughter even has a hand-me-down iPod loaded up with Miley Cyrus songs. You get the idea.
Actually, this isn’t a blog post about Apple at all, it’s actually more about RIM. More to the point, it’s an article about the speed of change.
Let’s start with RIM. They’ve been in the press a lot lately for a lot of bad reasons – market share deteriorating, share price plummeting, massive layoffs. They’re a company in decline, trying badly to turn things around. They’re even being referred to as the next Palm (you’re excused if you have no idea who “Palm” is.) So while a struggling tech company doesn’t feel like new news, it’s noteworthy to recall that a few short years ago any suggestion that RIM wouldn’t last much longer would have been seen as lunacy. ”Crackberrys” were ubiquitous. Presidential hopeful Barack Obama was photographed with his trusty Blackberry hundreds of times, even stirring controversy with his reluctance to relinquish it upon being elected – national security be damned. RIM was the future. RIM was an unstoppable force and the darling of Wall Street. And now, some short time later, RIM isn’t.
How can this happen? We’re not talking about a slow decline over decades like auto magnate General Motors, but a span of months. It boggles the mind to realize that “the future” can be relegated to “the past” in a heartbeat. I’m sure RIM will make a great business school case study for years to come (whether they turn things around or not), and I’m sure within RIM’s lifespan there are dozens of lessons about rejecting complacency. But for me, RIM is a wake up call about the newly-paced speed of change: exhilarating, frightening and motivating as hell.
Which takes us back to Apple, now the leader and darling of Wall Street. Apple can’t possibly be the next RIM. Apple can’t possibly be the next Palm. Can it?
John Maden
August 2, 2011 @ 12:00 pm
The major difference between Apple and the companies you mentioned is the breadth of their domination. Rim/Palm only dominated in one, small area. If Apple only made the iPhone you would have a valid argument. The fact that they have dominant shares in tablets, phones, personal computing and music indicates proves it would be much harder to out innovate them. In fact, to out innovate Apple the amount of investment it would take would mean it’s a sovereign nation doing so.
Secondly, Apple benefits from network effects. As you mentioned, you have iMac’s MacBook Pro’s, iPads, iPods and pretty much iEverything. The great thing about Apple is everything works better together, so for you to change you would have to change everything. So a company wouldn’t just have to innovate beyond Apple in phones they would have to do it EVERYWHERE. The capital and ingenuity to do this in a short period of time does not currently exist (companies larger than Apple are pretty much limited to Exxon Mobile and Wal-Mart).
Third, you claim that Apple passed Rim in a period of months (or short years) which I claim to be untrue. Instead, I would propose that it took Apple the better part of a decade to pass Rim. Keep in mind when Jobs returned the company was an $8 stock. They started with music and got people use to using Apple tech – use to how the menu’s worked. Then they moved to their bread and butter: computers. Getting people used to the tech made the conversion to the iPhone easier – they already knew and trusted Apple. This then lead to the iPad, which when they launched had no competition. This didn’t happen in a few short years, it took closer to 15.
For someone to usurp the King, given their current cash base (enough to buy out anyone in pure cash), it would take min 10 and most likely 20 years. It would be the equivalent of someone taking down Wal-Mart in retail.
If you would like more great ideas such as this one please feel free to HIRE ME :).
Jordan
August 2, 2011 @ 1:28 pm
OK, here’s what RIM needs to do.
1. Stop taking your cues from Apple. You’re not a computer manufacturer, get your core offering right before moving into lateral markets. (i.e. Playbook)
2. Discontinue all current & past phones. Make one new phone, base it on real users input, and include new input sensors. Partner with vendors who already have these sensors & software. Don’t reinvent what’s already invented.
3. Move into the fantastic. Consider partnering with someone who specializes in optics. Design a high-res camera that can be scanned/ analyzed for fiduciary markers at a distance. Include this functionality by default. (include QR recognition)
4. Facilitate social business & E2.0
5. Stop overriding design with usability. The two need to work together. (Not easy, but necessary – consider Samsung Series 9)
Once you have a new phone, iteratively improve it each year. Make it easy for users to suggest features.
When you have regained market share, consider moving into the tablet/ laptop markets. Create synergies between products. Consider creating a RIM product ecosystem.
Brook Johnston
August 2, 2011 @ 2:27 pm
@John – yes, you’re right about Apple dominating on a much larger scale, thus making the likelihood of their downfall far less feasible.
…..but is it not true that most the categories they now dominate (mobile, tablet, MP3, laptop, flying robot monkeys, et al.) didn’t even exist 10 years ago?
The Fall Of Apple seems about as plausible as, say, predicting that Microsoft wouldn’t be top dog in the e-world 15 years ago.
Things change. We don’t see it coming. That’s why it happens.
Warren Haas
August 2, 2011 @ 4:17 pm
If my user experience — and that of many others — with Apple’s newly released OSX Lion is any indication, then yes, their days could be numbered. I don’t like using a computer that has become virtually unusable.
My point is, Apple can and does make mistakes. Who’s to say they can’t make a giant one?
John Maden
August 3, 2011 @ 1:00 am
@Brook Johnston
To your first point I would strongly disagree. MP3’s were around since the late 90’s and an mp3 player is really just “portable music” which has been around since the 80’s. Laptops have been around for a while and tablet’s were first conceived in the 90’s (the original Palm’s and the Apple Newton are good examples). What Apple did was simply innovate past everyone else slowly. Mobile is also not a new concept and there were much larger competitors than Apple when they entered.
You’re Microsoft example is a poor one for a variety of reasons. Mainly, Microsoft was hampered with legal restrictions and forced to break up Office, Explorer and Windows. These restrictions also limited Microsofts ability to spend money on acquisitions forcing any innovations to come from inside of Redmond. These two points actually make it very likely that a company like Microsoft would fall (see Standard Oil in the earlier part of the 20th century). So barring any major governmental intervention into Apple’s business I do not think they will fall anytime soon.
To your final point that we don’t see innovation coming is correct. We don’t; however, I feel that innovation isn’t really that important in the evaluation here. What should be looked is how well a company is positioned to handle a “gamechanger” entering their market. To this I would argue that Apple is very well prepared to battle a superior product. They already have massive margins in all product categories and could force any competition into a loss leader position to maintain margins. While doing this they can tap the $100B in the bank to come out with a better product the following year. By having the ability to limit a competitors market share to allow their R&D to catch up makes it virtually impossible for anyone to compete.
Brook Johnston
August 3, 2011 @ 8:19 am
I think whoever comes up with the coolest shit first, wins.
Apple’s success is built solely on innovation. Without it, they are nothing.
I love my iPhone. But if my mother brews up a holographic 7G touchless smartphone in her basement tonight (she won’t), Apple would be effed.
Jim Monteath
August 3, 2011 @ 11:21 am
@Brook Johnston – To your last comment:
“I think whoever comes up with the coolest shit first, wins.”
I disagree with “first”. Apple likes to observe the failures/blind-spots of early entrants in a new segment and only then move in with something cool.
“Apple’s success is built solely on innovation. Without it, they are nothing.”
Not “solely” innovation. Don’t overlook the importance of a clear vision, strong design ethic, experienced executive team and effective operations management.
“But if my mother brews up a holographic 7G touchless smartphone in her basement tonight (she won’t), Apple would be effed.”
I know exactly who’s working on the next “iPhone killer”. Apple. Unlike RIM, Apple ruthlessly cannibalizes it’s own product line-up with the next, better thing. Competitors are still playing catch-up to version X when Apple releases version X+1.
@John Maden – I agree with your analysis and look forward to reading more comments from you in the future.
@Warren Haas – My wife and I both like OS X Lion, so there’s a different anecdote for you. Apple have certainly done plenty of things that annoy me, plus things generally considered to be mistakes. I get over the former and they seem to learn from the latter (so far).
@Randy – Don’t forget that Apple almost did disappear in the mid-90s. While anything is possible in the future, their current management take pains to not repeat the mistakes that led to that low-point (or new ones).
John Maden
August 3, 2011 @ 12:20 pm
@Brock Johnston and @JIm Monteath
Creating the coolest stuff is really a misnomer. First, with no disrespect to your mother’s engineering abilities, her 7G holographic phone wouldn’t sell a single unit. Eliminating the logistical issues, the world wouldn’t be able to handle it and there’s no infrastructure to support. You can only innovate up to the point of the network that’s out there to support it, which, right now is 4G LTE (the current iPhone isn’t a 4G phone which could imply it’s not the best right now).
Secondly, your point about innovation is limited. The ingenious product Apple created is not the iPhone or iPad (these are actually insignificant) but the App store. This was the game changer to the market – drastically increasing the product’s value to the consumer. If the iPhone could only do limited things like call, text, search the internet (though significantly better) Rim would be in a much better strategic position. The breadth and quality of App created is why Android is having trouble making moves – not some technological wunderkiding engineering that Apple has done in the lab. Though Jim didn’t mention it explicitly, this is a perfect example of the vision and leadership at the top of Apple.
To defeat Apple you’re not going to have to invent better tech (to be honest, it’s already out there) you’re going to have to completely re-imagine the mobile experience and create tech for that world. This solution is also going to have to have high barriers to entry because Apple has $100B in the bank to out innovate you once you launch.
Also Jim, if Grip is looking for any dynamic fresh thinkers – I am available :)
Brook Johnston
August 3, 2011 @ 1:27 pm
Good thing my mom’s also working on an equally impressive holography-enabled 7G wireless network.
Think different = innovate. It’s their base model and it doesn’t just pertain to the actual devices they create.
Ameet
August 5, 2011 @ 10:31 am
Very interesting read Randy. Especially given that the stocks took a massive downturn yesterday. Nortel is also a valuable case study as well.
Chris
October 25, 2011 @ 4:35 pm
To say that RIM declined over a period of months is just naive. It’s been years. Analysts and columnists have seen this coming all along. Inferior products, a refusal to change to fit customer demands and a freight train called Apple all led to RIM’s demise. If Apple is going to suffer the same fate there needs to be a giant on the horizon to replace it, I don’t see that yet.