What’s ‘appened to Apple?

Apple iPad event photo: Flickr/ mattbuchanan

One year ago, investors were suggesting that Apple was to become the first ever trillion-dollar company. Flash-forward to today, and the stock has only recently recovered from a 52-week low price of $421.06, wiping away about $200 billion in market value, roughly equivalent to the GDP of Pakistan. One day in particular, the 12 January, Apple stock lost $50 billion, more than the market cap of Morgan Stanley.

What’s happened? Apple still sells the same products, achieves roughly the same profit margins, and looks set to conquer the Chinese market, yet still continues to lose its appeal amongst investors.

There have been a number of reasons accredited with this: inter-product cannibalization, mobile handset market saturation and product affordability are but a few. Yet, perhaps Apple’s problems are rooted a little deeper than this. Simply put, Apple has lost its flair.

As investors continue to look for companies with growth potential, it just seems as though Apple no longer fits this criteria. Just like Austin Powers, Apple have lost their ‘mojo.’ Take the Ipad; at first amazing, revolutionary. But as time has passed, more and more tablets have been brought to market, and Apple’s response… The Ipad Mini. Really? Perhaps thinning the same device can only take you so far.

For the past five years, Apple had been operating in its own market, driven by the innovation of the company, and the sheer differentiation of its products. Being so unique, there was no real competition for its product lines. When people bought an Apple product, they didn’t just buy hardware & software; they bought a piece of the brand, their own slice of portable innovation. Take away the innovation and you lose what is so special about Apple’s products. As time has passed, other producers have caught on, and the wall that once separated Apple products from the rest of the market has slowly been eroded, leaving the company exposed.

The death of Steve Jobs certainly hit Apple hard. The very soul of the company was pulled out, and with it, the culture & image that captivated the hearts of so many fan boys. For the record, I have nothing against Tim Cook; but living up to the legacy of Jobs was no easy task.

There is only one way for Apple to stop themselves from bleeding out; they need to innovate again, they need to get their mojo back. But where could they go?

Rumours of an Apple television have been around for longer than I can remember. But would that really be the solution? To launch the company into another market of intense competition? I really don’t think so. Although Jobs told his biographer, Walter Isaacson, that he had ‘cracked’ the television market shortly before his death, it just doesn’t seem like the ‘Apple’ thing to do.

So, will we see Apple crumble? Or, does Tim Cook have one more recipe for success? It appears only time will tell. One thing is for certain, Apple needs to do something to stop the rot, and it needs to do it quickly.