Tim’s Cooking a Dangerous Plan. Here’s Why.
iPhones are on a decline across the globe, especially in China. In the meantime, Chromebooks are outselling Macs in schools across the US, a trend slowly seeping into the personal sector as well. Tim Cook is not particularly worried, however, since Apple services are bringing home the bacon. Read between the lines and it’s not too hard to conclude that Apple is shifting from a hardware company to a cloud-service company.
Apple has stopped being a hardware company because it stopped selling the kind of hardware that made it the glowing beacon of the tech world. There’s nothing extraordinary about Apple products anymore. The iPhone specs are often mediocre next to flagship phones from other companies; the Macbook Pro is overpriced next to other elite computers that offer the same performance and arguably a better design; The Macbook, Apple’s “Netbook”, lacks crucial features (USB ports, touch screen) next to top Google’s Netbook, the Chromebook.
Things won’t get much better for Apple. Depending on services like Apple Music and iCloud means Apple is now directly competing with Google and Amazon Services, products which both companies worked to near perfection for years. Both companies offer a better price for similar products, sometimes for much better quality. Apple Music is not Spotify; Apple iCloud is not Dropbox; the App Store is soon going to compete with Google’s new huge advantage: Android Apps readily available on Chromebooks. Apple is in the habit of demanding a premium price for premium products, but once in the cloud services world, its premium is mediocre at best.
Apple needs to return to its core business: hardware. In order to do that, it needs to stop the “me too” approach that confuses customers with multiple models of the same product. Apple needs to refocus on one elegant product for each purpose. No more three different models of iPhones, released at different periods during the year, but one solid phone that will blow away the competition when released. No more an iPad, an iPad mini, and an iPad Pro, but one iPad that makes it truly different from the iPhone on one hand and Macs on the other. No more three Macs (the Macbook Air has become a weird compromise between the Macbook and the Macbook Pro) but two — one simple and elegant which offers the best internet browsing experience, and one with monstrous specs which comes bundled with the right professional software, geared toward pros.
Apple bets each iPhone purchase ties the customer to Apple’s ecosystem, but this notion has one serious flaw: while other companies make their products readily available on Apple products, Apple doesn’t make any of its products available on other platforms.
Will Apple return to its old business model? Probably not anytime soon. With more stores opening in New York and across the globe, Apple is still successfully milking cash from customers who still believe they’re buying the best. Apple bets each iPhone purchase ties the customer to Apple’s ecosystem, but this notion has one serious flaw: while other companies make their products readily available on Apple products, Apple doesn’t make any of its products available on other platforms. Apple users have a choice of using Google or Microsoft products while Microsoft and Google users cannot use Apple products. This approach, which is championed by Apple, is one of the major reasons its services strategy will fail. Billions of potential Apple services customers on Android are blocked from using its products unless they jump ship and trade their favorite, reliable and often only affordable devices for iPhones. Why?
With Apple not reversing its strategy soon, its hardware on a decline, and its services blocked from potential customers, the company has lost its ability to offer anything new or fair for the price it charges. Is it the beginning of Apple’s decline? Possibly. I, for one, won’t be surprised.
