At the time of writing this the Apple Inc (NASDAQ:AAPL)
was worth well over 600b USD, which of course makes it the most valuable
company on this planet, the cherry on the top as some call it. So why this
blog? What can possible go wrong for this behemoth?
Just
so people know this 600b+ evaluation is based on their
stock value, which like any other stock is more about market's optimism
or pessimism about the company's future and the way their stock prices
are
soaring the people are pretty darn optimistic!! But then why am I so
pessimistic about this behemoth. Well for one optimism and expectations
don't
always turn out fruitful, do they? The
case in point- Facebook.
To be honest we are talking about a company that has changed
the way people ‘perceive’ technology. Whatever Apple might claim, they aren’t the
leaders in innovation. If you want any proof ask any nerd or a techie and if
you are lucky he won’t laugh at your suggestion of Apple being the leader in
innovation. But what Apple did great and still does better than the rest of the
pack is to create a niche market for itself. Create an identity for its product
which to be honest other OEMs are not even close to. Apple as a brand is far
superior to Samsung, HTC or Nokia. And this premium feel of the brand comes
with a premium price tag. The gross margins for Apple products compared with its
closest rival Samsung are more than twice. While it is true partly because Apple
controls the entire chain of production right from the software to the hardware
and hence saves out at each and every step of production unlike other
manufacturers, the fact is that the customers are not getting any advantage albeit
they are paying more for it! But the question is how much and more importantly
how long can people keep on paying for it? Let’s break it down to their top 2 products-
iPhone -
As per the sales figures there are about 1 billion
smartphone users in the world and that number will keep on growing. What about
the next 1 billion most of whom would be from the developing countries. Will
they be willing to pay such a hefty price for a product when there are similar
alternatives out there? The logical and resounding answer is a big NO. To be honest one can’t even tell the
difference between the latest iPhone 4S and the earlier generations. Compare
this with Google which over the years has brought in so many changes to Android
that now it is at par with iOS if not better. In terms of hardware Iphone4s
pales in comparison to the Samsung Galaxy S3 or HTC OneX. Those who are expecting
great news from iPhone 5 will be well advised to pipe down their expectations
as all the iPhones have only been incremental updates over their predecessors and
frankly it might bring more bad news than good for some people (read the new
8-pin dock connector for iPhone 5).
iPad-
This is the biggest draw for Apple right now and is bringing
in more revenue than any other product in their lineup. It is the best tablet
out there by a long shot and no matter how much the android OEMs try they just
can’t seem to get it right. That said iPad has a lot of competition going ahead. Firstly the new
7” inch tablet category created by Amazon Kindle and now carried forward by the
Nexus 7. Being smaller and more portable there is a bunch of tablet users who will
prefer the smaller version over the iPad. My personal opinion is that this new
category was created just because the companies realized that it is very
difficult it beat the Apple iPad in its own game. Nonetheless these tablets are out there and
surely eating into the iPad market share.
The biggest competition for iPad would be coming this October,
when we will have Windows 8 tablets out. The early reviews look great
and given the millions of windows users the world over it should be a hot
commodity when it comes out, something which Apple won’t like a lot.
Well, all said Apple is by no means going anywhere in the
coming years, with huge cash reserves,loyal customers and products which
are still market leaders, a lot has to go wrong for this company to go
down. But there are chinks in their armour and the sooner they realize it the
better for them.
Here’s hoping iPhone 5 will turn over a new leaf and will be
a great leap forward from the 4S.