Filed under: Analysis / Opinion, Apple Financial, Apple, Apple History
Apple poised to take over the (tech) world
Our friends at Cult of Mac commented on the possibility, floated on CNBC, that Apple will eventually overthrow Microsoft as the most valuable company in the technological world. If you think about it, Apple's stock was worth an unstable $25 dollars a share at this time 10 years ago -- today, it's worth $202 a share and shows no signs of decline. CNBC reports that Microsoft isn't really growing, but Apple continues to gain value and market share every day. From that, you could logically deduce that Apple will surpass Microsoft... but there are still a few points to make.Apple has a long way to go before they're really ahead of Microsoft by most metrics. I suppose it's possible that the company's worth could surpass Microsoft within the 2 years that CNBC predicts, but as far as actual market share... I hope not. Here's why:
If Apple grows that quickly, we're going to see the effects of gravity bring them back down a bit. That kind of growth would be great for the brand but not necessarily the customer. We're already seeing record highs at the Genius Bars and not enough experienced staff to handle the demand. Calling AppleCare is usually a chore, not a pleasure.
Then again, any tech support call isn't fun, but long wait times make it even more frustrating. Using the example of Microsoft, getting too big too fast degrades your ability to offer quality service. It doesn't mean that their products are horrible, it means that you have to bring in more people to fill the gap -- people who aren't necessarily the most qualified to help. Will this sort of thing happen with Apple? I hope not. If their growth continues at its current rate, they better have a very good plan to avoid the Microsoft effect.
In my opinion, Apple does well as the underdog: they constantly have to adapt to the changing markets and make themselves more appealing than the competitor. If you look at Apple's top-dog aspects (iPod and iPhone), we begin to see things that aren't so awesome: the lack of a subscription service, the restrictive iPhone platform, not to mention the App Store approval process. In some ways, they get to the top of the mountain and then stop trying. Apple doesn't figure out where to go after they reach the summit, they simply find a different mountain and start climbing. They spent a couple years with the iPod, then a couple years with the iPhone... now we're gonna be seeing a couple years of the iTablet (or iSlate or iPad, you get the point).
If I'm not mistaken, it's really been a while since they've done anything innovative with the computer. Sure, the iTablet could bring innovation, but that's another mountain -- as were the iPod and iPhone. I'd love to see the company get back to the personal computer and do something that would change how we look at Apple. When I mention Apple at the moment, I hear the response, "Oh, they make the iPhone, right?" 4 years ago, that was the iPod. Soon enough, it will be a new piece of sexy hardware that Jonathan Ive designed.
Maybe two mountains will collide with the iTablet. Maybe it will really be the computer innovation that we've been missing. Maybe it will put Apple ahead of Microsoft in value, but let's hope that the Apple brand continues its reputation for great products, service and innovation.
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Reader Comments (Page 1 of 2)
Cameron Williams said 2:05PM on 11-10-2009
Has any media outlet even suggested that Apple will pass Microsoft's market share? This post seems like a glorified straw man argument against a scenario no one legitimately thinks is coming to pass. Nothing Apple has done suggests that they're going after the largest market share, as they're more concerned with profit margins. This post missed the point.
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okiedokie said 2:20PM on 11-10-2009
Well considering that windows already took over the world, it's kinda hard to grow. Imagine hard penis.
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macserv said 3:43PM on 11-10-2009
No.
Erik Shultz said 2:23PM on 11-10-2009
Apple needs Microsoft to be there. An Apple computer is not for everyone because price point is always a factor. Cheap consumers will buy what ever is cheap, not because it is Microsoft or Apple.
Apple will never let go of the right to build there own hardware. If Microsoft had a little bit more control on hardware would there product be better?
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Dan Mosqueda said 9:49AM on 11-11-2009
I have a MacBook Air, MacMini (latest gen), 2 iPhones, and an iPod Nano G5. I love Apple products. However, Microsoft does do some good hardware. I love my Xbox 360. I have had it break once, but my MacBook Air has been sent back to the factory twice (1 time for a bad audio component, the next for a slew of issues that caused the lid to flop around). I've been through 1 bad iPhone.
I bring that up because people automatically slam the RRD on the Xbox when Apple is notorious for hardware problems and the automatic need to get Apple Care if you're smart.
So, my next work Microsoft purchase is a Surface with the "History at Your Fingertips" application from Interknowledgy.
That was a long way to answer your question. Microsoft can make some great hardware. In reality just as good as Apple.
Finally - I love the competition, it keeps both US companies innovating so much that nobody else even compares (witness Sony's struggles to break even, and Nintendo's recent flame-out financially).
kmcgrady90 said 2:25PM on 11-10-2009
Nobody expects Apple to surpass MS on market share. The original article you are referring to was commenting on market cap. They believe that Apple could surpass MS market cap within the near future.
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phongleland said 2:25PM on 11-10-2009
First, you say you don't want Apple to become too big too fast. Then you lament about "the lack of a subscription service, the restrictive iPhone platform, not to mention the App Store approval process". It seems to me that these things that you complain about is a result of Apple not being big enough.
It also seems to me that Apple is executing its strategy quite well. What you want from Apple makes for good punditry. However, there is no evidence of significant consumer demand for digital music subscription. And over 10 years of efforts on an the open platform, GNU/Linux, has not produce a better consumer operating system than Windows or OS X. It certainly has not produced a more popular platform. The App Store approve over 95% of submitted applications. Based on the over 100,000 applications currently available, I think Apple has done a bang up job with the approval process considering that there is malware, virus, etc on the iPhone.
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Frank said 2:26PM on 11-10-2009
"the lack of subscription service" is one of the "not so awesome" things? i beg to disagree with that one. i like to own the music i pay money for. it would be far less awesome, in my opinion, if apple had this.
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bowersan said 2:30PM on 11-10-2009
All i'm going to says is if Apple comes out with a tablet device that docks into an iMac-style frame (as per this patent filed last year: http://www.tuaw.com/2008/01/03/apple-patent-suggests-notebook-docking-station/), they may have a huge success on their hands.
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Oomu said 2:33PM on 11-10-2009
no innovation ?!
you think 10 years is a century, right ? are you 20 old or what ?
imac totally changed the deal
macbook air is a lot more what you think.
apple was all about wifi and laptop, now it's common, but you forgot apple and the first ibook.
and so on.
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iphone was the immediate following of ipod, itself was a big hit thanks to the preparation of iTunes, and aLL of that was not possible without Os X and the webobjects stuff behind the first itunes store and the still continuing AppleStore online.
the point is : Apple is building upon itself, years after years.
you seem to see some changes or gaps, but no. go back in history, you will see the plain old same Apple.
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for example, you think the radical attitude with iphone is new. NO. it was already the same with the few games for ipod, it was also the same at first with Mac (select developpers to have prototype AND tools to develop)
Apple opened because they were too late, too fragile with mac.
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never apple opened the ipod, long before ipod touch, the ipod was an already tightly controlled platform : not anyone could do a device for it.
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Apple was at the top of the mountain with ipod.
why do you think iphone is now the top of the mountain ? maybe the real mountain is with futuristic scooter, whatever.
I don't understand your argument.
You are nostalgic ?
but go to read old publications : old mac was not so Magical. People was not so fond, Lisa was not so big.
in 90s, mac was a dying platform, less and less software, less and less tools to use a beloved mac.
do you miss that time ?
You really think apple was gentle in 84 ? even in 82 ?
Do you remember the cost of the original Apple 2 ?
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naaaa. Past was bad, old, past is dead.
Present Apple is _better_. They sell, they innovate again and again, they have shops, they have 100 000 applications for their new platform, never Mac got that.
They can build upon it. Apple was not able to build upon the mac in 84 and was near to be forced to give up in 90s.
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about the microsoft stuff. It's because some analysts thinks Apple can be valued more than Microsoft in a mere two years.
it's not so impossible. In fact, Microsoft itself will surely be LESS valued in a mere two years than now, because of huge loss in windows mobile, tv, online activity and recession on windows desktop and server business (they can sell a lot, they can't win a lot)
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c0n0r said 12:38PM on 11-11-2009
Awesome
Johnny said 2:41PM on 11-10-2009
Fortunately, I don't have to make too many tech support calls, but the last time I had to call Apple Care, two months ago, it was still the best support experience of all the companies I have to deal with. I got through quickly and the person I talked to was very helpful.
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Sam Katz said 10:05PM on 11-10-2009
Agreed. Applecare with one rare exception (a complex Time machine problem) has proved right and competent, and fast.
And if you don't like their hold times, you can open a support ticket online, and have Apple call you back.
--Sam
willie said 3:13PM on 11-10-2009
I spent over an hour with iPhone support last night. They are shipping my 5th 3G s to fix battery issues and dropped calls. So far I have had 14 iPhone replacements since they came out. Quality control is a huge issue. The "Brand New" iPhone I received yesterday was to fix my most recent woes. It arrived DOA prompting the support call. I've been a fan since my first Mac in 84, but my patience has run out. Serious issues that need to be addressed. Can't imagine I'm the only person out there with these kinds of problems.
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Scott R said 5:12PM on 11-10-2009
Assuming that you've had your personal phone replaced that many times, and if you've had more than a couple of iPhones returned for battery life issues, I respectfully suggest that either you've got too much going on (push email, for example, can be a killer) or the battery is operating in an environment that it wasn't designed for -- either too cold or too hot.
Eric said 12:37PM on 11-11-2009
You've obviously won the lottery of self-despair. I feel sorry for you.
Christopher said 3:23PM on 11-10-2009
Wow. Really? You all just lost SO much respect in my book. Does anyone at TUAW have any sort of a business background? So basically a company on the brink of collapse has grown faster that a company that was about as big as it could get... big shocker. Talk about reaching. I am a Mac user and Apple supporter but it kills me the lengths that you all go to grabbing onto anything you can find and scewing however necessary just to give yourselves your daily affirmation that you're so superior. I think some of you would literally kill yourselves if Apple ever went belly-up.
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fabriceh said 3:42PM on 11-10-2009
The computing revolution you are waiting for has already happened: the iPhone.
The iPhone and its 100K applications is a general purpose computer that you carry with you at all time. Ask people who have one what has changed in their PC usage, and you will find a trend of people leaving their laptop on their desk as they can rely on their iPhone on the go.
As a mobile device, it fits in the mobile phone market, which is an order of magnitude larger than the PC market.
The iPhone dominates usage of the web on the go today, again by an order of magnitude.
This is a significant and disruptive technology change, on par with the PC, the consumerization of the internet, etc.
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Swimatm said 3:52PM on 11-10-2009
It'll be intersting to see how Apple handles their growing popularity. As for the stock price: "what goes up must come down."
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JDT said 4:55PM on 11-10-2009
"If I'm not mistaken, it's really been a while since they've done anything innovative with the computer. Sure, the iTablet could bring innovation, but that's another mountain -- as were the iPod and iPhone. I'd love to see the company get back to the personal computer and do something that would change how we look at Apple. When I mention Apple at the moment, I hear the response, "Oh, they make the iPhone, right?" 4 years ago, that was the iPod. Soon enough, it will be a new piece of sexy hardware that Jonathan Ive designed."
This is completely idiotic. Don't you guys have editors there? You are completely mistaken.
MacBook Air wasn't innovative? Unibody design wasn't innovative? Snow Leopard wasn't innovative? Grand Central was not innovative? And, although we have yet how good the Magic Mouse is, that's not innovative? And who the hell are you talking to that does not know about Apple's iPhone, iPod, or Macintosh computers, or iTunes for that matter? You really think people only know Apple because of the iPhone as a dismissive "oh yeah, I think I heard of it" rumor rather than because it was the game changing cell phone that drove customers to sit hours in line, news outlets to cover as much as they could about it, pundits to wrongly predict it's demise, and the entire cell phone industry to look like a deer staring at headlights and then for the next two years try to come up with a better alternative (so called iPhone killer) and fail miserably? What world are you living in?
"If you look at Apple's top-dog aspects (iPod and iPhone), we begin to see things that aren't so awesome: the lack of a subscription service, the restrictive iPhone platform, not to mention the App Store approval process. In some ways, they get to the top of the mountain and then stop trying. Apple doesn't figure out where to go after they reach the summit, they simply find a different mountain and start climbing. They spent a couple years with the iPod, then a couple years with the iPhone... now we're gonna be seeing a couple years of the iTablet (or iSlate or iPad, you get the point)."
No, I don't get the point. What the hell are you talking about? Apple had a winner with the iPod Mini only to discontinue it for the Nano because Apple was innovating. They climbed the mountain and then built a monastery. Then came the iPod Touch. Now what they did was grab another mountain and dump it on top of that one they had already reached summit and climbed this new mountain. Then the SDK came out with the AppStore. Boom, another huge mountain and another huge climb. Do you really think Apple has stood still with the iPods and iPhone? You really think there has been no competition? You really don't think they keep innovating in the iPhone front and iPod front? The only place I can think they stopped climbing was the Apple TV, and that's just because I know nothing about it. The reason Apple is number 1 in any market (be it market share or mind share) is because they keep innovating and innovating. They are a moving target.
You sound completely clueless, Josh, and quite misinformed as well. What are you expecting of Apple (or any company)? Miracles? Was revolutionizing the PC industry, Music industry, and now flipping the entire cell phone industry not enough? You want Apple to remain number 2 so it can compete better? Your post is ridiculous at best. Do some research and think before you write. And tell the person who edited your article to pay attention to content as well.
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