The Guardian recently referred to Apple's “rotting" state of business ahead of their end of Q2 results. It’s now official: Apple’s profits fell, but is this a surprise?

The answer is pretty simple: no. We cannot expect Apple to stay ahead of the curve forever: markets are constantly shifting, tastes are changing and, just as with social media trends, leaders come and go (or, at least, they do not rule forever).

So what’s the reason behind this shift?

I could talk about the lack of innovation that led to the launch of the iPhone 5 or the iPad Mini or the Google Maps issue, but most of all, I would like to concentrate on two factors I find particularly relevant: the growing importance of competitors and the race for the creation of digital ecosystems.

Competitiveness

The mobile market has radically changed over the last few years and here is where Apple suffered the most. In 2011 their iPhone 4 was by far the best product on the market offering an incomparable user experience, tons of innovations, minimalist design and an unmatched number of apps. Other brands where nowhere to be seen and consumers were more than happy to spend that extra cash to own a “cool” product. It was an aspirational brand, but it could not remain one forever: just as Nokia in the 90s, once the market was saturated people started looking around at other options while competitors started producing better alternatives.
History seems to be repeating: while everyone became the owner of some type of Apple device, other companies invested heavily in innovation and are now offering products that can compete from a design, functionality and price point of view. Google perfectioned the Android OS, Samsung produced the new Galaxy smartphones, Windows 8 is a sleek OS and even BlackBerry is back. But this is not only about smartphones: tablets, products such as Google Glass and Oled technologies are all adding up to a market that is constantly growing.
Apple’s fault was to stick to what they already had rather than investing in new products and solutions. But what is it exactly that they have?

The Digital Ecosystem

Apple forced people to use their apps, buy from their store and save to their cloud. They created a seamless experience and a great new business model where the customer is basically locked into the most advanced (and expensive) ecosystem you could think of. It worked perfectly as we are generally lazy and happy to commit to the easiest solution.

Looking at the state of the market it is easy to see how Samsung, Windows, Mozilla, Ubuntu and so on are all trying to replicate this model by offering their online app, music and book stores. Mozilla is concentrating on the developing markets, Ubuntu is pushing its presence in Asia, Windows is slowly gaining ground while Samsung is trying to capitalise by investing in the development of Tizen, its Android based operating system. and they are not the only ones realising the potential of such a shift: Facebook Home, for example, is just another way to make your mobile journey a Facebook one, from start to end.

The main point here is that competitors are finally offering a comparable experience and, most of time, at a more affordable price; this, I believe is the main reason behind Apple’s recent problems.

We are heading towards a digital world made of different digital ecosystems; hopefully this will result in a wealth of options and possibilities for the user rather than a lack of compatibility.

by Marco Barbieri
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