By Michael Wolff, USA TODAY
How long do you get to stay on top?
General Motors had three generations; IBM two; Microsoft one.
Age of Apple began in 2005. Its price was $35 a share then. It kept
going to $700, becoming the most valuable and influential company in the
country, until September, when it began to fall. It's down about 20%
Its phone market, tablet market and content-selling business -
iTunes - until recently practical monopolies, have become, as if
overnight, hugely competitive fields. Management, in this strictly
top-down company, is suddenly in dramatic flux. And, with its great map
app debacle, Apple's customers are starting to rise up against its
famous closed-system policies.
Apple's circumstance affects much
more than just Apple shareholders. The technology business is all about
dominance. It's a geopolitical sphere-of- influence game in which, at
any given time, there are one or two superpowers, bullish, overbearing,
imperial, demanding, dictating the shape of the industry and the
possibilities for innovation in it.
The trick, on which fortunes are built, is knowing that a dominant position is cracking well before the edifice falls.
the existential question before the tech business: Is Apple looking at
generational hegemony or a vastly more limited run?
always been a company whose brand can be at dramatic odds with its
fortunes - a superb illusion. In its darkest days in the 1990s, its
true-believer loyalists - even before Steve Jobs returned to rescue the
company - fanatically maintained the myth of the company as the
alternative tech brand. This was true even though its market share had
shrunk the company to irrelevance.
The deification of Jobs as American hero moved Apple-ism from the tech community to Main Street.
Jobs died, his mythic status rose and buoyed Apple's value, instead of
highlighting the unique vulnerability of a one-man show without its
star. Its iconic brand (possibly the world's most iconic brand),
pervasive product suite, stratospheric value and vast cash hoard ought
to be larger than one man, no?
Everybody believes in Apple.
yet, befitting a company whose real genius is design (i.e. illusion),
there is something ephemeral about its position. It has not so much
created monopolies - the secret of generational success - as opened new
markets for everyone. These markets - smartphones, tablets, digital
content distribution - have become the dominant ones in the technology
business. There's no place else for a big player to go. And in the case
of phones and tablets, all you have, in the end, are fairly basic
machines. It's a game of price and features and shrinking margin.
smartphone market - until recently split between an ever-growing iPhone
dominance, a stalwart BlackBerry and a divided Android field - is now,
increasingly, an iPhone vs. Samsung world. The difference between one
dominant player and a collection of would-be players and two clear
alternatives is a vast one. Samsung's consumer electronics marketing
clout - and its breathtaking advertising budget - is even large enough
to go toe-to-toe with Apple's brand mythology and ubiquity.
absolute dominance of the tablet business is dramatically eroding, too.
Its almost 60% share of the market at this time last year is now 50%.
Samsung, with 6.5% hardly a player before Christmas last year, now has
almost tripled its position to 18.4% of the tablet market.
ITunes, an always-kludgy system and hoary (and hated) monopoly, now struggles in a streaming world.
now a struggle at HQ. The Kool-Aid effect among Apple stalwarts and the
technology press has meant that the signs of internal turmoil at Apple,
of an order that would put any other company under the media
microscope, are seen as a natural transition.
But absent smoke and
denial, this is a bloody battle: Scott Forstall, who has shepherded the
iPhone business - that is, the business most central to the company -
and who has been gunning for CEO Tim Cook's job, was ousted from his job
running iOS software last week by Cook and replaced by Jony Ive, a Jobs
and Cook loyalist. John Browett, who runs Apple's massive retail
business, was also given the boot - Cook says he'll now be running that
group. For the company and its investors, the bet more and more is on
Cook. That's a vastly different proposition than a bet on Jobs. (Cook's
peculiar aping of Job's black shirt and jeans ought to give everybody
And now a backlash against the products. It is an
extraordinary part of the Apple marketing dynamic that a great number of
consumers buy Apple while resenting it, too. Apple is a peer-pressure
buy, often at the expense of functionality and, even, common sense. The
underlying fury at Apple's authoritarian product control and disregard
of its consumers finally broke into the open with its decision to
abandon Google Maps.
Apple does what it does well, and then
sloughs off everything else - like getting e-mail and actually making a
call on the iPhone. Succeeding with that sort of hauteur and
dismissiveness is awfully dependent on charisma and sex appeal, an
expensive proposition in a commodified market.
The age of Apple
should, reasonably, be a fleeting one. And this, in its way, is good
news. Innovation happens in the technology business and new markets open
when the mighty fall - often not until the mighty fall.
A short run on top is long enough.
Michael Wolff can be reached at firstname.lastname@example.org and on Twitter @MichaelWolffNYC.