When you’re on top of the world, there’s few places to go. “It’s all downhill from here,” says former Apple engineering manager Dan Crow. “I think Apple has peaked and the story of the next few years will be one of a slow but real decline.”
That’s not to say Apple is going anywhere anytime soon. It’s still the largest company in the world and in spite of supply issues — it’s not easy making iPhones — Apple is about to have the biggest quarter in U.S. history: a record breaking $52 billion in revenue on the back of crazy demand for their 5th generation smartphone and revamped lineup of laptops, desktops and tablets. But even the freshest apples start to go bad.
Crow however, is worried about the direction of the company in the wake of its recent Maps fiasco. The Apple of Jobs, the one that we knew and loved, didn’t seem to sacrifice design for profits. But, writes Crow, “Replacing Google Maps with an obviously inferior experience shows how much Apple has changed. Apple’s success had been all about offering users the best possible experience; suddenly it is willing to give users a clearly worse experience to further its corporate interests – in this case its long-running dispute with Google. We might expect this sort of behaviour from Microsoft, but we don’t expect it from Apple.”
It’s not like Apple was perfect in the past, but criticisms were more often than not philosophical in nature. Steve Jobs stole many of the seeds that fueled the companies best stuff. Open source advocates and software developers hated the totalitarian nature of the closed platform. Environmentalists and tinkerers bemoaned how difficult the beautiful devices are to take apart and repair. Innovators and legal analysts deplored the firm’s antagonistic and stifling use of patent law. Apple’s Sony-like obsession with proprietary technology — as if calling a connector “Thunderbolt” makes it any more useful than USB — pissed off just about everyone. And then, of course, there’s Foxconn.
It’s the kind of arrogance and ugliness you put up with only because you know you’re getting the best. It’s harder to tell people what to do when you’re the butt of an Internet meme. Decisions like Maps undermine Apple’s lifeblood — its ability to dish the coolest products.
Fallen from grace
The second part of Crow’s argument hinges mainly on Apple’s inability to cope in a post-Jobs world. People can talk about Tim Cook and Jony Ive and Scott Forstall (well, not anymore) but the sad reality is that Jobs is gone and there is no such thing as “the next Steve Jobs” (okay, maybe Elon Musk). Little modifiers like “Retina,” “5,” “Mini” have certainly helped the company’s bottom line, but despite releasing more products than ever before in 2012, Apple hasn’t released a fresh, breakthrough thing in over two years.
At last month’s iPad Mini unveiling, Phil Schiller, Apple’s senior vice president of marketing, said the company’s mission was to “create a breakthrough, innovative product and then, through the years, relentlessly keep updating it with the latest technology." But the last bit of true innovation came in April of 2010 with the original iPad. Since then, the company has relied on a mantra of thinner and faster. Which is fine. Just don’t tell us it’s “the biggest thing to happen to iPhone since the iPhone.” If anything, the statement (which is on Apple’s website) only serves to remind us how little things have changed in the last 5 years, reality distortion field or not. It’s a problem for Apple and Cook because as I wrote last month, all the low hanging fruit is gone. Around Silicon Valley, revolution is giving way to evolution. There’s only so many times you can go back to the well.
The jury is still out on whether Cook can conjure up a game changing release. What is apparent however, is that his management skills aren’t Jobsian. Last week, he canned John Browett who was leading the company’s retail operations. The narrative here is similar to Maps. Formerly of Dixons — the British electronics retailer that’s more Circuit City than the Tiffany’s of tech — Browett’s focus on cost cutting over employee benefits and customer support did a number on Apple PR. With worker moral plummeting at its coveted chain of retail stores, Cook was forced to quit while he was behind, letting go his first big hire as official Apple chief after just seven months on the job.
Too Steve-Jobs-like to handle. Not enough Steve Jobs
Then there’s the surprise exit of Scott Forstall, the man who joined Apple from NeXT in the 90s along with Jobs and was responsible for Apple operating systems, both desktop and mobile. Polarizing, unabashed and a hard-working genius, many saw him as heir apparent for the late Jobs. Instead, he’s gone. According to the official party line, he’s simply leaving and will stay on as an advisor to Tim Cook. Unofficially, he was forced out, the “advisory role” serving as a legal necessity to prevent the former iOS head from immediately taking his talents to the likes of Google.
Forstall is a big loss, says former Apple exec Andy Miller. “He was such a talented guy, to me he was Mr. Apple. He knew the company inside and out.” Miller told Business Insider. “He carried his weight in ways you couldn’t imagine,” adding, “He was under a massive amount of pressure to get software releases out, and he got it done. He was ridiculously professional.”
Was that the straw that broke the camel’s back? Forstall’s apparent refusal to sign an apology letter for Maps (which he was responsible for along with the also critically panned Siri voice assistant software). In other words, ego. Like Jobs, Forstall could be abrasive and divisive in his obdurate pursuit of what he believed was perfect (such as his obsession with faux wood). So much so that design impresario Jony Ive refused to share a room with him unless Cook was around. Apple’s hardware chief Bob Mansfield allegedly only agreed to stay knowing that Forstall would be given the boot. Keep in mind, all of these guys — Forstall, Ive, Mansfield, Cook — had been operating under the same roof – and the same Jobs – to great effect for years. But to manage egos, you need need to be the biggest ego in the room, which the larger-than-life Jobs managed with ease. Cook, not so much. So he compromised a core captain in the name of “collaboration.”
The king is dead. Long live the king.
Such is the trouble with all great monarchs. At the risk of sounding insensitive: eventually, they die. The problem for Apple is that its top-down approach is rigidly structured around a savant supremo who is sadly no longer with us, writes Crow:
Most recent tech startups subscribe to the organisational philosophies embodied at Google: extremely open internal communications, flat management hierarchies, as much bottom-up decision making as possible and lots of collaboration amongst team members. Apple is the opposite. It’s highly secretive, to the point of paranoia. It has many layers of management. Decisions are made at the top and rigidly enforced through micro-management and direction. Apple was built in Steve Jobs’s image, and Steve was all about control – specifically, his direct control of everything at Apple.
At Google, products are built by largely self-directed teams, so there is little consistency between them. Apple builds extremely integrated products, designing everything from the CPUs to the industrial design, the software, the marketing, even the stores in which they are sold. This results in extremely consistent and holistic products. But it relies on the person at the top having the vision and creativity to design the right products.
Apple had Steve, the master product and marketing genius. He was the enforcer of Apple’s quality and consistency. He used the advantages of a command-and-control organisation to amazing effect. He harnessed tens of thousands of employees to create his singular vision for the future of computing and communications. Through a combination of inspiration, fear and brilliance, he was able to transform the sad remnants of the Apple of 1996 into the greatest tech company of our time.
It’s far too early to write Apple off completely. The company is still the market leader in a burgeoning space just beginning to mature. But Cook is running out of time and options to make his next bold moves, which puts the high-flying Apple in unfamiliar territory. Consider the following:
- For the first time ever, iPhone loyalty is declining.
- 75 percent of smartphones now run the Android operating system.
- The cool kids think Android is cooler these days
- Wall Street smells blood: Apple stock currently sits at $558, well below its pre-iPhone 5 highs of over $700.
- Apple’s grip on the tablet market is rapidly deteriorating. It only sold 14 million iPads in the fourth quarter compared to 17 million last year. In 2010, the company commanded a 93 percent of the market. Today, just 50.4 percent.
- Unless Tim Cook magically pulls something out of his hat, Apple has no new product releases lined up for at least half a year.
All of which hammers home Crow’s dismal conclusion: “I think in hindsight, we will see that Apple’s peak of creativity, innovation and leadership was early 2012.” Fans of metaphor might remember the law of Sir Isaac Newton, whose little bit of inspiration under an Apple tree helped inspire Steve Jobs when he named his company: everything eventually falls to Earth.
Follow Alec on Twitter: @sfnuop