Apple crumble
It’s that time of the quarter: on April 21st, Google (sorry, Alphabet) announced its latest earnings, good but not outstanding, the stock went down 5%; on April 26th, Apple announced its results: bad, the stock went down over 6%; finally, on April 27th, Facebook announced its earnings: good, beating all estimates, the stock went up 9%.
So what’s really up, besides short term stock movement? Google announcing lukewarm results — in the eyes of the market — is not such big news: it is a massive company, still enjoying double digit increases in revenue (17% year on year this time around) and major growth with its key product (paid clicks, up 29%). It may not have the dynamic of a startup anymore, but that is to be expected when you are worth 500 billion. In short, Google’s future seems fairly rosy.
As for Facebook, the latest results only show that the social network is fast becoming the #1 challenger to Google’s online empire. All forecasts beaten, over 50% year on year revenue growth, 1.65 billion monthly active users, out of which 66% are daily active users… these are incredible numbers, no matter how you look at it. Facebook is currently enjoying the heart of a successful company’s growth curve, and should continue to do so in the few years to come, to then reach some sort of Google-like plateau. But we’re not there yet and it’s not that bad anyway.
Finally, Apple: still the most valuable company on the market, still huge, still profitable, but… going down. Revenue down, earnings per share down, growth margin down, iPhone (it’s most successful product by far) sales down, iPad sales down, Mac sales down… I’m not sure there was a single thing going up this quarter — except disappointment. What does this mean? That you can’t possibly go up indefinitely, as we all know in theory but dread in practice. No matter how big a behemoth you are, there will come a time when you will lose momentum. Apple’s last decade has been absolutely outstanding, possibly unique in the history of business and technology. But, after the rise must come the fall, and so far it is rather mild: the company still sells hundreds of millions of products a year, a number so high it only makes sense that it may not be sustainable. Especially when the guys at the helm of the company are not the same anymore.
Not to dwell on the late Steve Jobs and his contributions, as they have been — well — covered, but his input in the way Apple was managing its product launches, developing its technology and more generally envisioning the future is notably missing today. While highly capable, Tim Cook’s team obviously lacks a leading, all-encompassing and uncompromising vision that will allow the company to take major leaps of faith — reinventing the (iPod) wheel if need be. All of us being finite, Jobs’ passing would have happened sooner or later and its consequences would have somewhat been the same: very few men have his ability to create the future, and the likelihood for a company to get 2 of these men in a row is so close to 0 that we might as well consider it is. Job’s vision is slowly fading, and possibly the era with him.
The pioneering age of computer technology penetrating society is well behind us, when developing countries have a near 100% smartphone adoption rate. The holistic vision that came froom it in Apple’s paradigm is further threatened by the ever widening reach and wealth of digital technology in all its forms, from virtual reality, to AI, to big data…
Today’s future is twofold: on the one hand, more digital with Google and Facebook at the helm of that revolution; on the other hand, more technical with Elon Musk and his ever increasing array of companies behind him. In this evolving landscape, Apple stands somewhere in-between, slowly approaching the day where its business model — and very essence — becomes irrelevant.
