Apple, Exxon Mobil and the Seesaw of Inconvenience
Apple, which used to eclipse the other major technological companies in a relatively short period, suddenly found itself in the shadow of its nearest rival in market share – ExxonMobil, the oil giant. With the share value on an alarmingly-steep downward spiral, Apple is fast losing both its influence and cachet in the absence of a trace of innovative ideas, which the company had been renowned for, under the late visionary Steve Jobs.
Apple posted disappointing iPhone sales figures on Wednesda, despite making record profits. With the announcement of mixed results, its share value fell by 12% on Thursday. So far, the share price has fallen by 37% from its highest value, $702.10, in September, 2012.
Even before posting the gloomy news, there were rumors that Apple had asked the manufacturers of screen for its iconic smartphones to scale back the supplies. The company, for obvious reasons, neither denied nor put an acceptable gloss over the news, although it struck a chord with what analysts had been predicting for months. Apple, however, cannot deny the fact that the loss of the title – the most valuable company in the world – is not something trivial; far from it.
As usual, Tim Cook, the beleaguered CEO of Apple, is buoyant about a fight-back. “We only want to make the best products,” Mr Cook said. “We’re focused on making products that enrich lives,” he continued to emphasize his point on Wednesday in a determined tone. Those who have been watching the fluctuations of Apple’s fortunes since its inception, however, do not see the light at the end of the tunnel, especially with Mr Cook - a marketing genius, not a visionary - at its helm.
Apple is sandwiched between lack of innovation and intense competition from rivals which offer cheaper products. Since the company made it clear that it would not consider offering cheaper gadgets to customers, it has to tackle the former – coming up with innovative products. The release of the latest iPhone and iPad clearly showed that it is easier said than done. There was some progress, of course, but it is nowhere near enough to be classified as revolutionary.
With its iconic products, such as iPhone and iPad, near the saturation point in the developed world, Apple is left with the Herculean task of conquering the developing world, especially China. Since telecom companies in the developing world are notoriously reluctant to offer customers attractive deals and Apple is not prepared to bring down the price of its products, marketing impasse is inevitable in the foreseeable future, despite the best efforts made by the company to break the ice.
The combination of the fiasco of Map software in the new iPhone, loss of Scott Forstall, the chief software architect, and the spirited pursuit of patent violations, did very little to maintain the reputation of the company. Instead, it provided its critics with an opportunity to accuse Apple of selecting red herring to conceal its own shortcomings.
Adding insult to injury, it ditched two of its most popular applications from iPhone and iPad – YouTube and Google Maps – only to make an embarrassing ‘U’ turn in the face of customer’s wrath. The apology made by Tim Cook, when Map software flopped and the permission issued to Google to let its popular software distribute through Apple’s Appstore, shows Apple’s desire under Mr Cook’s leadership to correct things even if they were a bit late.
The survival in the long run, however, will not be guaranteed by PR exercises alone. Mr Cook has to elevate someone with a clear vision from Apple’s top hierarchy to a slot near him in order to turn around the company as a matter of urgency, as he clearly admitted that he was not a visionary like late Mr Jobs.
Apple, which almost went bankrupt in 1997 with the share price at $3.19, is nowhere near the doomsday, when its stock value is currently at $439.88. It is, however, difficult to rule out the existence of a series of speed bumps along the lane of growth. In this context, Mr Cook certainly needs a good navigator for a smooth drive, if he wants to avoid potentially serious shocks at regular intervals in proportion to the dwindling share price of Apple.
- Asian Tribune -