Monday, September 24, 2012

Has Apple Peaked?
Published: September 21, 2012

The classic challenge of any company is to maintain healthy growth AFTER business success. The mindset often changes from aggressive market actions to protecting what you have. You must build the awareness of this phenomenon into your strategic thinking and corporate culture to avoid this insidious trap.

If Steve Jobs were still alive, would the new map application on the iPhone 5 be such an unmitigated disaster? Interesting question, isn’t it?.... 
…..No doubt, the iPhone 5, which went  on sale on Friday, will be another hit. Apple’s halo remains powerful. But there is nothing about it that is especially innovative. Plus, of course, it has that nasty glitch. In rolling out a new operating system for the iPhone 5, Apple replaced Google’s map application — the mapping gold standard — with its own, vastly inferior, application, which has infuriated its customers. With maps now such a critical feature of smartphones, it seems to be an inexplicable mistake… 
…..But there is also a less obvious  (Job’s death)— yet possibly more important — reason that Apple’s best days may soon be behind it. When Jobs returned to the company in 1997, after 12 years in exile, Apple was in deep trouble. It could afford to take big risks and, indeed, to search for a new business model, because it had nothing to lose.
Fifteen years later, Apple has a hugely profitable business model to defend — and a lot to lose. Companies change when that happens. “The business model becomes a gilded cage, and management won’t do anything to challenge it, while doing everything they can to protect it,”
It happens in every industry, but it is especially easy to see in technology because things move so quickly. It was less than 15 years ago that Microsoft appeared to be invincible. But once its Windows operating system and Office applications became giant moneymakers, Microsoft’s entire strategy became geared toward protecting its two cash cows. It ruthlessly used its Windows platform to promote its own products at the expense of rivals. (The Microsoft antitrust trial took dead aim at that behavior.) AlthoughMicrosoft still makes billions, its new products are mainly “me-too” versions of innovations made by other companies….. 
….And you can see it in the decision to replace Google’s map application. Once an ally,Google is now a rival, and the thought of allowing Google to promote its maps on Apple’s platform had become anathema. More to the point, Apple wants to force its customers to use its own products, even when they are not as good as those from rivals. Once companies start acting that way, they become vulnerable to newer, nimbler competitors that are trying to create something new, instead of milking the old. Just ask BlackBerry, which once reigned supreme in the smartphone market but is now roadkill for Apple and Samsung.

No comments: