Information Technology, Investing

Is 2013 the Year the Apple Rotted?

Speaking as someone who grew their career through the golden age of IT, when a company by the name of Digital Equipment Corporation was setting the world on its ear, I feel I have a unique perspective on this. I watched the rise of Apple, the fall of Apple, and the re-emergence of Apple. In truth, Apple didn’t do well unless it made piece with Steve Jobs. Sometimes it didn’t do well even when it had made piece with him.

One thing has become painfully obvious over the past few months. Steve Jobs appears to have been the only one putting new product ideas into the pipeline and he seems to have stopped when he got his liver transplant. Can’t really blame him, a liver transplant is something to be taken seriously.

The second thing which is obvious to anyone who ever watched “Pirates of Silicon Valley” or read anything about Mr. Jobs is that his personality could not tolerate anyone who thought they could be as creative as him. This leads to Apples current predicament, nothing in the pipeline and very little polish left for the existing apple products.

Of course, if you listened very quietly, you knew Apple has been in trouble for a while. The first red flag was when Apple stopped shipping OS updates for its computers. When a company is trying to milk its OS for revenue it is in trouble. If you don’t believe that read up on the final days of Wang…When they changed their licensing policy so an OS license didn’t transfer with an old machine. They decimated the used Wang market over night and ensured no new Wang computers would sell because the computer companies spent half a million on suddenly wasn’t worth $500 trade in.

I’m not playing the Apple stock right now, but if I was I would be shorting like a banchee. Even if Steve Jobs himself had anointed the new product guru and managed to transfer all of his knowledge and memories into that guru’s brain, the earliest a significantly new product could get out the door is a year from now. If you are talking about something as trend setting as the iPad or iPhone was, then you are talking five years.

Seriously, what is left in the world of geek toys? The Apple television hasn’t amounted to much. I have to ask if the smart phone market is even a market one wants to play in right now. The Samsung Galaxy is kicking bootie all over town and the price of entry into that market is astronomical. I’m not talking about the engineering costs as much as the marketing costs. If you don’t happen to be come an overnight You-Tube sensation you need a marketing budget big enough to run a presidential election.

This might be a time for Apple to re-trench, but I don’t know just how far back they would have to draw the line. They are being attacked on all sides.

http://www.businessweek.com/technology/content/mar2009/tc2009034_069800.htm

Right now it seems only their loyalist customers can be counted on, but, in reality that is a tiny chunk of their business anymore. Apple was trendy. When the fashion magazines declare the trend has moved, so will a massive chunk of their business. Some would say it already has.

http://online.wsj.com/article/SB10001424127887323596204578240440691304344.html