Control. stubbornness. Inflexibility. It would be easy to think that these words apply only to Apple’s arch nemesis Microsoft. But the truth is, these words also describe Apple and its former CEO Steve Jobs. Indeed, these are the key attributes that might cause the death of the iPhone’s market leadership. Sure, the iPhone represented a quantum leap forward for telephony, mobile computing, cloud computing, and design. But that’s five years ago-several light years in tech industry time.
As time goes on,the iPhone looks less like a revolutionary innovation and more of a marketing coup. Let’s face it, much of the technical innovation of iOS have either been matched or exceeded by Google’s Android system. Much of the manufacturing expertise and supply chain mastery pullled off by Apple’s Tim Cook is slowly beginning to appear with Samsung and other Asian Apple competitors.
After the death of Steve Jobs, it is quickly beginning to be apparent that his penchant for control, his bullheadedness, and preference for closed systems may not only harm the iPhone but also foreclose Apple.
Remember when the Mac allowed clones? I bet you don’t. Don’t worry, it’s back in the 90s and those years are way behind us anyway. However, that episode is worth remembering if only for the reason that it shows Apple can let go of its penchant for controlled OS environments. After all, Apple is not a manufacturing firm per se. It is a design and sales firm which outsources manufacturing to Asia. Why not go whole hog and focus on design and sales and marketing?
In other words, why flood the market with lower priced and accessible hardware? Apple walks away with design fees, license fees, and store sales, while the manufacturers have to content themselves with thin but still lucrative volume margins. Moreover, this might effectively counter the threat posed by Samsung’s Android-based smartphones.
Steve Jobs’ famous resistance against Flash highlighted how hardheaded he could be. Even though he has passed on, a lot of his attitudes regarding which technology gets in and which stays out reflects the opposite of IBM’s more accommodating attitude which ensured the IBM PC became a success. Old corporate habits die hard, and this can only weigh Apple down in the Age of Android.
Selling Apple products through Apple stores enables Apple to pad its profits at quite a healthy margin. That much is true. But how long can it last? After all, as more and more cheap Asian manufacturers get in on the Android tablet and smartphone game, price pressures will exact a big toll on Apple. It can try to go the luxury route but eventually it will run face first into the hard wall of luxury demand economic laws. Luxury items can fetch such premiums because there are only a few of them made every year. Apple can’t grow its item unit sales volume as fast if it wants to go the luxury route.