{"id":1401,"date":"2013-04-29T16:30:44","date_gmt":"2013-04-29T16:30:44","guid":{"rendered":"http:\/\/atantalus.com\/blog\/?p=1401"},"modified":"2013-05-04T10:58:10","modified_gmt":"2013-05-04T10:58:10","slug":"falling-apples","status":"publish","type":"post","link":"https:\/\/atantalus.com\/blog\/2013\/04\/falling-apples\/","title":{"rendered":"Falling Apples"},"content":{"rendered":"

\"doomed\"<\/a>Apple is DOOMED, DOOMED, I tells you.\u00a0<\/strong><\/em>Or perhaps not, if you have a modicum of sense…<\/p>\n

But I do think I’ve finally understood the last 18 months of Apple and how a company with such a tremendous level of revenue and\u00a0profits\u00a0can fall foul of bizarre expectations for growth and behaviour.<\/p>\n

You would think a company with such a peerless\u00a0brand, an era-defining line-up\u00a0of profitable products and strong retail, media and app stores would get a bit of an easy ride. So why does anyone and everyone question the future of this company and demand the CEO stands down NOW<\/a>?<\/p>\n

My theory has nothing\u00a0do with Samsung, a lack of innovation, Tim Cook or any of the crazy two bit theories peddled by combinations of analysts (often working for competing firms<\/a>), tech journalists (who stretch the definition of both those words<\/a>) and stock manipulators.<\/p>\n

My theory is really to do with Steve Jobs. But NOT how you might think.<\/strong><\/p>\n

Since the launch of the iPhone and the iPad, Apple’s\u00a0performance\u00a0should, by all accounts, have set a consistent course for outer space. And it kind of did, for a while, but not when it should!<\/p>\n

Taking Stock<\/h2>\n

Look at the <\/span>stock price over 5 years<\/a>.<\/span><\/p>\n

\"apple-shares\"<\/a><\/p>\n

WOW. Look at that growth and decline. But wait!<\/span><\/p>\n

Steve Jobs died on\u00a0October 5, 2011. (I’ve shaded in the period after that date). During the heady days of the launches of era-defining iPhone and iPads, and with the visionary Jobs at the helm, Apple saw a steady but unspectacular rise in the share price (after the 2008\u00a0<\/span>financial\u00a0crisis).\u00a0<\/span>Then TC takes over and BOOM.\u00a0<\/span><\/p>\n

Forgetful<\/h2>\n

But we seem to selectively remember and warp our technology history. “Apple\u00a0released\u00a0the iPhone,\u00a0released\u00a0the iPad and then took off… And then fell to the ground\u00a0after\u00a0Tim Cook’s tenure took hold”. Or so we’re led to believe.<\/p>\n

People forget the Steve Jobs era slow iPhone start; the modest targets; the iPad “disappointment<\/a>“; the long delays, the staggered regional roll outs; the carrier lock-ins. But there is a “tipping\u00a0point” event that may have\u00a0confused\u00a0onlookers. Look at Apple’s revenue and profits up until the 2012 holiday quarter (from The NextWeb<\/a>)<\/p>\n

\"apple-revenue\"<\/a><\/p>\n

Apple has always had plenty of\u00a0seasonality\u00a0(since the coming of the iPod) but Q1 2012 (that’s Oct-Dec 2011) looks different. Yikes… It pretty much doubled the revenue and profits from the previous\u00a0holiday quarter. The publishing in January 2012 of these results is really when Apple shares took off.<\/p>\n

Standby for Launch<\/h2>\n

The iPhone 4S was launched on the 4th October 2011. Look at the iPhone launch weekend sales (thanks to Macstories<\/a>)<\/p>\n

\"iphone-launches\"<\/a><\/p>\n

Yep, it was the iPhone 4S took Apple to the moon in the 2011 holiday quarter!<\/strong><\/p>\n

The iPhone 5 managed to just about beat the 4S figures a year later, but not by much (4.5m sales) and they had to pull out ALL the stops to get the phone out worldwide in that launch\u00a0quarter (including the vital\u00a0Chinese\u00a0market) in order to surpass the 4S.<\/p>\n

Let’s take a closer look.\u00a0The 4S was a strange beast. An internal rebuild to an existing shell that was\u00a0released\u00a0nearly 18 months after the iPhone 4 (the longest period ever seen between iPhone launches). It\u00a0benefited\u00a0from a tremendous level of pent-up demand and Apple, for perhaps the first time with an iPhone, were actually ready to meet that demand. They launched the new phone into more markets and channels than ever before and managed to reduce delays in ordering the device (compared with severely\u00a0restrained\u00a0supply of previous iPhones). I would suggest that Apple spent the 18 months between the 4 and 4S doing a LOT of supply chain building to meet iPhone demand (and they STILL get the media-tastic levitra generic buy<\/a> queues at Apple stores to get the phones despite the ramp up in supply!)<\/p>\n

The 4S was going to have a bumper launch whatever happened, but the other key part of the puzzle is that it was\u00a0launched<\/a>\u00a0the day before Steve Jobs died<\/a>.<\/p>\n

The traditional disappointment about a new Apple product and perpetual sniping about the 4S only had one day<\/strong> to take hold before\u00a0everything\u00a0pretty much stopped to\u00a0respect\u00a0the death of Steve. This was obviously a genuinely sad moment for everyone that was involved in the industry, or used technology, and the anecdotes and praise flowed for many weeks after his death.<\/p>\n

Zeitgeist<\/h2>\n

I can’t say for sure, but it felt at the time like the level of main-stream\u00a0appreciation for\u00a0Jobs’ achievements (and the just launched iPhone) was never higher.<\/p>\n