The iPhone 5 is breaking all iPhone sales records, another hit on their hands. Or not? I think it’s the beginning on long slide south for Apple.
Yes, it is going to sell well. Very well. So why is Apple going to decline? Two very simple irrefutable reasons: What Goes Up Must Come Down, and Steve Jobs is still dead. The iPhone 5 is the first indication of these realities.
Let’s take the second one first. I am a big fan of Steve. It’s hard not to be – he has all the attributes that I (and many of us) value. A young bright-eyed kid that took on the big boys, a visionary, an amazing business leader, a track record of success, the maker of things that make us go gee. He was the Willy Wonka of tech.
Every good leader develops a succession plan. However, that does not mean that Steve Jobs can be replaced. He can’t. Anyone who tells you that Apple will not be impacted by the loss of one of our generation’s most truly brilliant is full of shit. We joke about Steve’s reality distortion field and his innate ability to sell because they were so powerful. Gone. RIP.
Tim Cook has the hardest job in the world – replacing a legend with no chance of measuring favorably. Just keep doing whatever Steve did and everything will fine.
Then there is physics. Inertia slows due to friction, and there’s plenty of friction. Wang led the word processing revolution. DEC was a leader with Mini computers. RIM was unstoppable just a decade ago. The US won the space race, yet now needs to hitch a lift from the Russians to get into orbit. The list goes on – success is a hard thing to indefinitely maintain. The iPhone 5 represents a disturbance in Apple’s force.
Apple’s innovative products have created a powerful force of momentum that continues to propel the computing giant. The customer loyalty it earned enables higher margins and other benefits. People line up for Apple’s products even when there is no shortage – just to get them sooner. The design of these products call to us. With most Apple product announcements, the aftermath is sheer (blind?) desire. Must have-it frenzy. But that’s not the case this time.
Here is what I see:
- Not wide enough
- Dock change is ok, but adapter should have been included
- The design is awkward, too narrow/tall
- price is too expensive
- Disappointment with too many models
- No NFC a disappointment
- New Apple Maps disappointment
- The new headset (EarPods) are not very good
- It was a yawn – 4S (incremental) was a bigger announcement than the 5 (generational)
- The actual announcement lacked pizzazz
- What happened to YouTube?
- Apple case highly sensitive to scuffs – sometimes scuffed in the box
- Liquid Metal?
- The new lightning connector should be a micro USB 3.0 instead
- No swappable battery
- No memory card slot
It may be meh, but it doesn’t matter. It is selling on momentum. Apple is still the greatest and this is the greatest phone they offer. But there is a clear shift, and this is the first major iPhone release that is selling on push (momentum), not pull (native demand). I am glad to see the dock connector go, but a new proprietary standard? LTE is a big feature, but what took so long? The screen got bigger, but far from big and not a “retina” display. It’s altogether meh – but it still drew lines and campers.
The iPhone already lost its market share leadership, and it looks like the tablet space will finally have reasonable alternatives this year from Android and Microsoft. Even Blackberry will theoretically release its next generation Blackberry 10 in early 2013. Amazon and HP are making noise about phones too. Microsoft Phone 8 products are on the short term horizon. The reviews of Android Jellybean generally agree the iPhone advantage is gone. The big gap in the number of applications in Google Play vs. the Appstore is shrinking to insignificance.
With the technical edge gone or disappearing, with its top salesman gone, with its top designer gone, and with fierce competition on their heels can Apple maintain its price premium and market share? Charging for the dock adapter is the kind of thing that breeds resentment (no one would have cared if the iPhone price was a little higher and the adapter was included).
We’ve seen this movie before. The writing on the wall is now becoming visible. Apple makes great products and that won’t stop anytime soon – but the price premium and loyalty they abuse will start to wear.
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