25th January 2013 – An interesting thing happened today. Exactly one year previously, Apple was crowned the world’s most valuable company – today it lost that position to Exxon. To many, this might be dismissed as an insignificant blip.
However I believe it represents something much more important; I believe it represents visible evidence of Apple’s inevitable transition from great to good.
Apples shares slipped on Friday to $440 following a poor forecast for iPhone sales, and this decline has contributed to Apple’s stock price dropping by 35% (more than $245 billion), since its high spot at $705 in September 2012. More worrying for Apple, on the same day its main competitor, Samsung, declared fourth-quarter profits had surged 76% to a record high.Source: CNN Money
When Steve Jobs passed in 2011 I, like so many, wrote blog posts celebrating his success as an inspirational technologist and businessman, the man who took Apple from the brink of bankruptcy to the most celebrated and valuable company in the world. However, I voiced a very real concern; Jobs, despite his genius, was what Jim Collins would call in ‘Good to Great’ a ‘Level 4 Leader, not displaying a number of the characteristics shared by his famous ‘Level 5 Leaders’, namely a high level of personal humility, lack of ego, and a drive to build an organisation that would be great without them at the helm.
Jobs however didn’t display these characteristics – his intelligence and foresight was undeniable, but his people skills, management style and succession planning were constantly questioned. Level 5 leaders build organisations that succeed without them; Level 4 leaders build organisations that fall apart when they leave. The last time Jobs left Apple it lost its ‘why?’ and quickly regressed into a company that had little to differentiate it from the other PC and electronic device manufacturers.
So my question was whether Apple would be able to retain the elements that Jobs brought to the table, and what made them different to all other technology companies; a unique understanding of their customers wants, a focus on being ‘different’ and coolness through innovative design – or would it revert once again to simply becoming just another technology company, competing on features and price.
The answer lays, I fear, in Collins other research book, ‘How the Mighty Fall’, where Collins examined why great companies lose their way. The first stage of decline is ‘a hubris born of success’; believing your own press, expecting success but forgetting the core principles and disciplines that made the company great.
Whilst the fall in share price may worry the analysts, what concerns me more is the change in attitude at Apple since Job’s death. Distracting legal battles with competitors like Samsung over IP rights, infamous design and technical flaws in their products like the Map App, and a worryingly lack of true innovations and new products – relying on new features and smaller versions of previous products (like the iPad Mini). Jobs understood which customers he wanted and what they valued – owning technology that whilst simplistic in its design also made the owner feel special, different and ‘cool’. Why else buy a Macbook that’s twice the price of an equivalently powered laptop.
To make Apple ‘Different’ Jobs combined technical innovation with beautiful, simplistic design. Apple’s strength, was its ‘why‘. The trouble for Apple is the fact that their original ‘why’ was so clear – it directly appealed to the individual; people who didn’t want to be part of the crowd. It called out to people who believed that they thought differently and did not want to be defined as simply consumers. The Apple logo wasn’t a logo – it was a badge people wore. It said ‘I am different. I am cool. I am not one of the masses.’
Apple’s success has therefore come at a devastating price. Now everyone has an iphone or an iPad – so they are not different. Apple owners are no longer individual. Apple isn’t cool. The ‘Why’ just doesn’t make sense anymore. Apple’s raison d’être was that it was the cool alternative to the mainstream; now it is the mainstream. Headlines like ‘iPhone tops the Charts in the US and Japan, Android wins everywhere else‘, shows how Apple’s grip on the hearts and minds of its consumer base is loosening. Even my own teenage son, who two years ago crazed me for an iPhone 4, bought a Windows phone than an IPhone 5.
Apple is apparently working on the development of an iWatch – a wrist based iPhone. Sounds cool? Not according to the posts and comments linked to the announcement. Comments like “Steve Jobs would never have spent one second on such a product” and “iWatch? Rigght. Because the iPhone screen is smaller than the competition they will make an even *smaller* screen so I need a tweezer to operate the keypad and a magnifying glass to watch video. Nice plan”.
Apple only needs to look north of its border, to Canadian technology outfit RIM (of Blackberry fame), to see just how quickly a company can go from hero to zero. I don’t think for a second that Apple will collapse (it has $137billion in the bank after all – and that can buy a lot of innovation), but I do wonder whether its mojo died with Steve Jobs.
- [i] iPhone Tops The Charts In The US And Japan, Android Wins Everywhere Else – RedOrbit.com, January 22, 2013
- [ii] Exxon Bests Apple as World’s Biggest company – Wall Street Journal, January 25 2013
- [iii] Exxon tops Apple as most valuable company @CNNMoneyInvest January 25, 2013
- [iv] iPhone Tops The Charts In The US And Japan, Android Wins Everywhere Else – RedOrbit.com, January 22, 2013
Sean CuleyBusiness Transformation Expert (SCOR-P, FCILT)Sean Culey (SCOR-P, FCILT) is a global keynote speaker on the topic of disruptive technologies and their impact on businesses, the economy and society. He is the author of 'Transition Point', a detailed look at the causes of technological disruption and the impact it has had on our society, and how the current wave of technological change - from robotics to AI - will completely disrupt our business models, economy and society at large. Sean is also the author of numerous articles published in magazines such as Forbes, The World Financial Review and The European Business Review.
Sean is an expert at helping companies develop and deliver new customer centric business models, and he advises supply chain leaders on how to align their organisation to ensure they are executed successfully. He has 25 years of experience including six years as CEO of business consultancy ‘SEVEN’, and a decade working for Cadbury Schweppes, where he was the Global Design Authority on what was the world’s largest SAP implementation. He has developed a series of masterclasses about Disruptive Technologies and how companies can create new business models to exploit them.
Sean is also Visiting Fellow at Cranfield University and a Fellow at the Chartered Institute of Logistics and Transport (FCILT). He is also the UK’s only certified SCOR Master Instructor and a futurist for IBM Watson.