On Settling Down

I have been hearing a lot of folks talking about how Apple is "losing it's edge", "not innovating anymore" or (we can always count on Leo Laporte for a little drama) "lost the magic". That is fine, they are welcome to think that. But is this true? Has the company gone from introducing two of the biggest game changers (iPhone and iPad) in consumer technology to a complete has-been in less than five years?

It has happened before, sure. In fact very few tech companies have the same influence they used to. HP, Dell, IBM, RIM (now Blackberry) have all seen their market shares shrink for various reasons. But I do not think that is happening at Apple. What appears to be happening is a lot of tech reporters are getting bored.

We have been three and a half years without a paradigm shifting product from Apple. Three whole years of incremental iterations of the same devices. The response from much of the tech news world is to say that Apple has lost "it": the loss of Jobs has finished them and they'll never be the same again (I suppose that last statement is true, how could that kind of loss not change any company?). I am going to discuss two reasons I think Apple has not lost their touch. First, they never had the kind of innovative streak that many credit them with and second, Apple still doesn't care what anyone thinks (with certain exceptions we'll get to later).

First, Apple is not an innovator. The philosophy that governs the company is not bringing the latest and most exciting new features to their customers. Apple's goal is to create products that are easy to use, well-integrated, and polished (with the odd lemon here and there). There are a very few cases in which Apple adopts a nascent technology. I think we believe Apple is an innovator because we remember their abandonment of old technology (3.5 in. floppy and cd drives) while we forget they are quite slow to adopt new technology (NFC). Apple excels at putting the pieces together and making them beautiful and functional, not in coming up with them in the first place.

Second, Apple doesn't care what anyone thinks. They are not concerned with Wall Street, with what reviewers think or with what tech news pundits think Apple should do next. Apple cares about the products that people will buy and the margins at which those people are likely to buy them. More often than not, Apple is able to produce a product that the masses want to buy by predicting what consumers want, not reacting to what they say. This strategy has resulted in Apple becoming one of the most profitable companies in the world. I would be surprised if they changed it now because some tech writers want an iWatch.

There are a lot of reasons to believe that Apple is not in trouble and operating in a manner that will allow them to remain profitable. So settle down, everyone: Apple is fine.