Apple inc.'s amazing performance in the consumer market this past half decade were down to several factors. Their pioneering corporate strategy for technological 'Concorde' moments such as nano technology in the iPod nano, touch screen technology in the iPhone 3G, iOS smartphone/mobile platform, OSX computer platform, iTunes, and some pretty geeky and amazing new software/hardware. Despite the success, Apple inc. have not been sitting down like couch potatoes, in fact they continued to strive for the Apple CEO Steve Jobs' main objective to create the perfect product. Many more noteworthy products have followed on, including the iPhone 4, 4S and 5, the Macbook Pro, and Macbook Air, the iPad, and even the iPad mini!
In our current society, technology is now the main impetus that is driving the economy forward. Communications technology itself is one of the largest markets currently, and its importance cannot be denied. Efficiency in communication is important for business operations, consumers for product information and overall economic development and growth. Several decades ago we were still using air mail to communicate with others in far away countries, now we can call them (pretty damn expensive!), send emails or SMS (I prefer Whatsapp), or even video call them for free (Skype <3)!
*"Wherever you want, whenever you want" - Communications technology is the very important for today's society economically.
It all seems very good then; with consumer tastes' driving the mercurial technological goods market, and Apple continuing to bring out the goodies, it seems like nothing could stop the blooming harvest of Apple.
However, in an interesting turn of events just this year, the Market Value of the NASDAQ AAPL stock has since taken a very large dip, from the company's highest ever recorded market share value of $702.5 to $520.17 as of today (25/12/2012).
The first, and main reason for this drop, is the rising competition. When Apple inc. started to dominate the market around 2007, there were virtually no substitutes for some of its products, including the iPhone 3G and some of its nano technology. But now, Apple's competitors have really stepped up a gear; their technological prowess is arguably on par, if not better nor worse than Apple right now. Through what I have heard from many smartphone users, their preferences range from simply being pro-Apple to a dislike of the new CEO Tim Cook. Some of the less extreme factors that lead to this shift in power in the smartphone market include:
- Screen size - Apple has been quite weak in addressing this point. Even the larger 4-inch screen in the new iPhone 5, is no match for the 4.8-inch screen in the Samsung Galaxy S3, and the 4.7-inch HTC EVO 4G LTE. . Consumers have constantly expressed their desire for larger screens. Notable benefits include larger texts for reading and better game play experience
- Processor Speed - there is no doubt that speed is one of the most important things in technological devices. While the new iPhone 5 boasts a powerful dual core 1.2GHz A6 chip, it's competitors the Samsung Galaxy S3, LG Nexus 4, are coming out with quad core beasts running at 1.5GHz.
- Apps - The Apple App Store is features free apps, most of which are Lite versions, and paid apps whic are full versions. Android apps however offer full versions of these apps that can be downloaded from the Internet for free. Of course, Jailbreaking the iPhone is always an option, but it is quite hassling, and you will lose the warranty, so you cannot replace it when it breaks. I myself have Jailbroke my iPhone 4, and my phone's performance dropped considerably. Consideration of the opportunity costs, it is not as good as the Android Apps.
If Apple inc. wants to improve their current market performance, they will need to at least meet what their competitors product specification, before dealing with them on the software level. Experts predict that strong competition from other technology companies, mainly Samsung, would further lead to Apple inc.'s market share to deteriorate.
The second problem are the questionable product launches and decisions from the hierarchies of the company. The recent release of the iPad Mini, a product with the goal to compete with the Samsung Galaxy Note, was met with confusion and criticism. People claimed that it was a poor attempt to make something that is similar to a small tablet or large smartphone. It's flaw lies in its lack of a calling function; a function that is basic in communications technology. To me, it seems like Apple is no longer the pioneer, it may be starting to be imitative of Samsung's products. Furthermore, Apple's decision to replace the Google Maps, one of the most universally recognized, useful, and consumer-friendly apps, is plain stupid. In its place, the Apple Maps seemed good at first with the 3D buildings and nice graphics, but they seem to get the most important, and yet the most basic information such as street names, addresses, building names wrong. It is difficult for any business, no matter how advanced, to replace established ones. I can safely say that Google completely monopolized the maps/location market with the Google Maps; no other maps have the same quality and convenience as it, truly a service with no close substitutes.Changing consumer tastes and requirements, and increasingly elastic demand have also contributed to Apple inc.'s falling market share price. When Samsung came out with the Galaxy S, there is a notable sense of hype about it, indicating tr start of the power struggle. And what happened next? The most significant market change is its dynamism (dynamic efficiency). The time difference in the release of improvements in original product has gotten shorter, and it is predicted that it will continue to be shorter. It's not that Apple's products are low-tech, this is in fact the problem of human behavior. When the iPhone 3 came out, it was an extremely huge breakthrough, a Concorde moment no less. But this monumentous structural change has gotten us wanting more, expecting the same excitement as when the iPhone 3 came out. The iPhone 4 was able to meet the same level of vibe, if not more, with a brand new design, many more functions, and an awesome retina display. Then when the iPhone 4S was introduced, it started to raise some questions. Even though amazing stuff such as the Siri voice assistant came out, everyone was hoping for the iPhone 5 and hence the reaction was quite dull. For the iPhone 5, it lacked any breakthrough as far as technology is concerned, and the introduction of Apple Maps was simply disastrous, but it is still selling well.
Product differentiation and marketing maintain the strong points of Apple because they are efficient in using their resources. Their advertisements focus on adapting a low-cost, minimalist, directly-to-the-point approach. Efficient and low cost, the epitome of being economical. Moreover, product differentiation for Apple is one of their most important and observably significant missions as pioneers and entrepreneurs because there are no substitutes for Apple software, hoping to make their products more price inelastic. For example, while Samsung, HTC, Son, and LG are using Android OS (food names: honeycomb, ice-cream sandwich etc.), and Nokia using the Windows 8 OS, Apple uses its own iOS. To an extent, Apple inc.'s strive for product differentiation is justified, but too much might come back to haunt them for their efforts. In the aforementioned paragraph, Apple's attempt to get rid of Google backfired, leaving them with a slightly dented reputation, and proving that Google is best for maps. Additionally, Google have been quite cheeky in dealing with this situation, creating a free maps app available for free on iTunes similar to the Apple Maps with 3D buildings and spoken route directions. I myself have downloaded it, and it is significantly better.
Patents and Copyrights are the current protectionist measures Apple inc. are using against the other tech giants. One of the most significant lawsuits Apple have filed against was Samsung, in the Spring of 2011. This lawsuit targeted the Android smartphones and tablets, with Apple claiming Samsung had copied their ideas. Apple's multinational litigation over technology patents became known as the mobile device patent wars: extensive litigation in fierce competition in the global market for consumer mobile communications. In total (July 30 2012), Apple and Samsung carried out their legal battles over 50 lawsuits, 12 courts in 10 countries in 4 continents. Apple prevailed and Samsung had to pay US$1 Billion for all damages. In the complex business world, copying someone else's idea, especially new inventions, is similar to cheating in an exam; zero tolerance and all measures are taken to preserve the individual's efforts. Apple inc. is extremely pedantic when it comes to copyrights and patents. In the Apple Store located in IFC (International Finance Centre), Central Hong Kong, the spiral glass staircase is also copyrighted. Truly unf***ing-believable.
Lastly, the company is suffering from internal conflicts between staff and authorities. On October 29 2012, senior vice-president of the iOS software, Scott Forstall, resigned from his position in the company. The mastermind behind all the ingenious iOS software up-to-date will no longer be here to serve the long-standing community of Apple lovers. According to various sources, Forstall has recently came under fire for the Maps app, Siri, and the skeuomorphic design of the phone. Forstall's stubborn defiance of these criticisms has led to CEO Tim Cook "[deciding] to lance the boil as internal politics and dissent reached a key pitch." On a general note, members Apple team loathe each other; Forstall had such a bad relationship with Jonathan Ive and Bob Mansfield that they could not hold a meeting without the CEO overseeing the meeting. These internal conflicts have indeed damaged Apple's significantly, unless they resolve these issues, Apple would not stand a chance in the later stages of the corporate war.
Apple's recent problems have fortified their other troubles. Other tech giants are finding opportunities to undermine Apple of its status as the number one technology company, and therefore the number one market capitalization company in the world. Apple have to tread carefully, and smartly to avoid further pitfalls that may ultimately lead the company to its 'rotten' end.
