If you listen to groupthink critics on Apple, you'll hear that the company is deeply troubled by too much reliance on iPhone sales, aging Mac Pro and Mini offerings that haven't been updated in years and a stagnating market for iPads that has fallen precipitously since Peak iPad occured in 2014. They're wrong, here's why.
A visit from an insane time traveler
Imagine it's 2007 and you've just witnessed Steve Jobs introduce the new iPhone. Suddenly a time machine appears and a person from ten years into the future jumps out. Naturally, you ask whether Jobs' intended goal to reach 1 percent of the global smartphone market ever materializes.
"Never mind!' the person from the future says. Instead he gravely warns you that, "in ten years, iPhone will account for about 60 percent of Apple's revenues! Apple will be incredibly reliant upon iPhone profits!"
"Holy cow," you reply. "iPhone will be contributing sixty percent of Apple's $19.32 billion dollars in annual revenues in a decade? That means iPhone will grow into an $11.6 billion business!"
"No dummy, in ten years Apple's annual revenues won't still be today's $19.32 billion, it'll be $215.64 billion. But that's the problem: most of that growth will come from expanding iPhone sales. Conventional Mac computer sales will only grow from today's 5.3 million per year--$7.4 billion worth--to 18.5 million Mac ten years from now, $22.8 billion worth of Macs. Apple will be bringing in $136.7 billion in revenues from iPhone! It will be so terrible. Warn your friends!"
"That's bad?" You ask. "So in ten years, Apple will be bringing in far more revenues from phone sales than anyone else ever has, while also tripling its current sales to reach $22.8 billion worth of computers ten years from now?"
"No dummy," the time traveler says. "Apple will sell $22.8 billion worth of Macs. It will also invent a new lightweight tablet computer called iPad, and in fiscal 2016 it will sell $20.6 billion dollars worth of those. So in total, $43.4 billion worth of general purpose computing devices a decade from now, plus $136.7 billion worth of phones."
"Well it sounds like Apple does pretty well with both computers and phones," you say.
"Hardly!" The time traveler snaps. "Ten years from now, nobody is buying Xserves, nobody buys the cheap Mac mini, and desktop 'Pro' Macs virtually disappear from the radar. Demand for desktops is so light that by 2017 Apple hasn't significantly updated its slowest selling desktop Macs for years.
"Instead, it will ship a premium-priced MacBook Pro that's super light and thin, featuring a Touch Bar that replaces the top row of function keys with a dynamic touch screen that suggests things you might want to type next! It's terrible, people want to see an updated Mac Pro they're not going to actually buy, not another update of a product that will actually sell by the millions."
"It sounds like you are totally deranged," you observe.
"You just don't get it!' he screams. "Apple might be making money and developing products people will actually buy, but the reality is that--in unit sales--Apple sold more iPads in 2014 than in 2017. It turns out that Apple could make more money selling people big iPhones than from small iPads. Once the big screen iPhone goes on sale, the numbers of iPads sold also goes downward, dangerously inflating the numbers of iPhones sold. It's like Apple doesn't even care about unit sales and its only focused on building products that make money!"
"What's Apple's future stock price?" you ask as you look up the company's current valuation in the Wall Street Journal, because you don't have an iPhone yet and the phone you have lacks WiFi or a data plan because they are all just too expensive in 2007.
"Sorry, I have no time left," the time travel says. "I have to go back in time even further to warn people in 1997 that Apple is getting rid of QuickDraw 3D and that Pippin and Newton PDA sales are going to go away completely, replaced by a new ARM-powered computer that does little more than play music from a hard drive. Can't wait to see the terror on their faces! Plus I need to buy some more Apple shares to finance this time machine. It's expensive to maintain!"
This time traveler story is not actually true. However, the insanity he spews is exactly what the tech media is reporting today. From bloggers at The Verge to The New York Times to clickbait generators at Forbes, Business Insider and other surveillance-ad content mills to even analysts seeking to say something of merit about the company that will make them look smart, virtually everyone in tech is merely saturating the web with stale, vapidly ignorant observations about Apple that are purely ridiculous. The best question, however, is: why?
Balloon logic
The tired tropes of Apple's "troubling" situation are a form of balloon logic; ideas that seem substantial until you scratch the surface and realize that there's nothing really there but a thin bit of rubbery garbage stretched out around captive air.
Apple does face some significant challenges ahead in its efforts to maintain and expand its position and profitability in personal computing. However, the general consensus among Apple's critics fails to maintain a firm grasp on what these actually are.
There's a simple explanation for why analysts, pundits and journalists regularly doubt the capacity of Apple--the most consistently, commercially successful tech company ever--while exercising a doe-eyed credulity in the promises of every potential new competitor that announces itself.
Analysts, pundits and journalists needn't be consciously biased against Apple to repeat fiction about the company; they only need to be selectively informed by Apple's rivals and lack any capacity for critical thinking or any valid insight into the market.
Apple loves the darkness
It's not just Apple's competitors that are contributing toward the murky, delusional picture of Apple's current status. Apple itself benefits from secrecy and a public kept ignorant to its intentions and strategies by a lazy media.
It's much easier to surprise and delight audiences with products they don't see coming. That's why Apple didn't outline in advance the various features of its 2016 product introductions until they were nearly ready to sell, and doesn't print out a detailed technology roadmap of where it's headed.
Nobody was detailed well in advance on Apple's Continuity strategy for linking Macs and iOS devices using Bluetooth and WiFi, and few even comprehended the significance of this when it was unveiled. Even fewer--not even yours truly--foresaw that Continuity would also expand as a platform glue to deeply integrate Apple Watch features, or to associate new wearables like AirPods into Apple's magically hyper-connected ecosystem of devices.
By not outlining what it was doing and why, Apple gained a huge competitive advantage that it could incrementally roll out without its competition copying its moves.
Microsoft apparently thought it was matching Apple by rolling out Continuum, a way to turn a smartphone (something Microsoft is struggling to sell) into a desktop PC (something few people need anymore). Google introduced its own concept for merging Android (its mobile platform of low quality app titles) to run on ChromeOS (its unpopular Linux netbook that it struggles to give away).
The media praises both of the latter with standing ovations while failing to even grasp that Apple's Continuity is the only one of the three that offers the ability to sell new hardware by facilitating new capabilities that people will actually want, rather than just promising to do something that pundits rooted in the past can nod their heads along with, but which makes very little actual commercial sense.
Writing for The Verge nearly two years ago, Tom Warren crowed of Continuum: "Microsoft turning phones into PCs feels like the future!" Right, nothing says "future" like Windows Mobile phones and desktop PCs.
Before realistically examining Apple's current position in personal computing--a market that involves Macs and iOS devices including iPhone and iPads--consider how consistently backward and incorrect the general perception of Apple has been across the last several years, and--most importantly--why people were wrong.
Statistical fallacy has resulted in foolish advice and incorrect predictions
It's not difficult to create persuasive arguments by massaging figures in the model of IDC, Gartner and Strategy Analytics, or to artfully chart out data points in the manner of say, Business Insider. However, no matter how plausible a story might seem, or how incontrovertible a series of data points appear to be, if they predict an outcome that doesn't actually occur, it's pretty clear that something was wrong in that logic.
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