Is Apple “Old News?”

As we ramp up to the UC Summit next week, there has been a lot going on in mobility. On the carrier front, Dish Network’s unsolicited bid to acquire Sprint has thrown a serious wrench into Softbank’s plan to acquire 70 percent of the company for $20 billion. Dish is offering $25.5 billion, and Sprint has now put together a board-level team to evaluate the options.

However, the more interesting story is “What’s happening (or ‘not happening’) at Apple?” Rumors are that the company will post its first drop in profits in a decade when it releases its second quarter results later today; sales are still up. Last year was clearly a dud for the crowd from Cupertino. Apple introduced an iPad Mini that was a little smaller than the original iPad, the iPhone 5 that was a little thinner than the 4S, and iOS, 6 which doesn’t have much in the way of significant features/functions to separate it from iOS 5.x. They did introduce Passbook, but for the life of me I still can’t figure out what it’s supposed to do.

The company’s stock has also taken a pounding. After starting 2012 at $400 per share, it peaked at $705 in September, but it has now fallen back to around $400; last week it slipped below $400 for the first time in over a year. Still a pretty good climb from the beginning of 2009 when it was selling at around $100.

Despite its lackluster performance, Apple has stuck to its secretive ways and has continued to turn its back to the industry. That can pay off when you’re the queen of the ball, but the appeal of Apple’s exclusivity may be wearing thin.

In a very interesting , Peter LaMotte, an analyst with Levick, a strategic communications consultancy says Apple’s that silence hinders rather than helps it. "The Apple mystique protected them from a need to engage in the conversation. But the mystique has worn out. They used to own the 'cool' factor. Not anymore."

Of all of the competitors in the smartphone space, Samsung seems to be benefitting the most from Apple’s stumbles. By mid-2012, Samsung was shipping twice as many smartphones as Apple, and as the company also makes basic handsets and feature phones, its total unit shipments are almost four-times Apple’s.

Samsung has also done an excellent job at creating an image for itself thanks in part to some very creative TV spots. Samsung also outspent Apple in advertising last year $401 million to $333 million. I’ve also noticed a change in Samsung users. Where initially the Android buyer was a “geek” who wanted access to all of the granular controls, the appeal today appears to be much broader, and the UE has gathered a real following—and not just folks who bought it because it was cheaper than an iPhone.

With Steve Jobs gone, the spotlight is on Tim Cook, and frankly we haven’t seen much as yet. The legendary secretiveness remains, but product is what keeps you in the game. For years the market assumed that Apple could keep hitting grand slams, but lately what were seeing is weak pops to the outfield.

The strongest rumor at the moment is Apple may be starting production on the next edition of the iPhone to be called the iPhone 5S and an iPhone 6 will appear in 2014. The rumored 5S model will feature a 4.8-inch screen closing in on the Samsung Galaxy S4’s 5-inch screen; the iPhone 5 has a 4-inch screen. There has also been talk of an Apple wristwatch, but in the meantime, both Samsung and Microsoft are talking about wristwatch type peripherals. Of course tiny Pebble Technologies already has a wristwatch that’s compatible with both Apple and Android devices.

In the mobile game the phrase is always, “What have you done for me lately?” Apple has had a great run since the iPhone’s launch in 2007, but people change smartphones every two to three years, so that could be three smartphones ago. Consumers are fickle, and we’ve watched the lead in the smartphone market shift from Palm to BlackBerry to Apple and now to Samsung all in the last 10 or so years. I can’t foresee Apple altering its “attitude,” but attitude doesn’t sell phones.

1 Responses to "Is Apple “Old News?”" - Add Yours

Michael Stokes 4/25/2013 8:40:47 AM

Interesting as always Michael. In my consulting travels it seems there are some contradictions out there. Many die hard Apple loyalists aren't acknowledging [vocally] that Samsung and others are taking market, and, have reliable capabilities in their products, including BYOD for enterprise use. Yet they speak quietly in the background about how much they admire this wave of solid Apple competitors. Then of course, Apple says it's the most innovative company on the planet but haven't launched differentiated products for way too long, and, haven't stepped up to acknowledge someone else is eating their lunch, and, communicate a plan. Their days of leveraging secrecy (like Sony used to do) are over in my view. This IS the turning point for the smartphone market, much like the pre-smartphone market became a sea of look-a-like commodities. From a business perspective, it's time for the smartphone market to spend more time understanding business and setting plans for leveraging mobile devices for real productivity enabling applications.