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back to article 'Apple will coast, and then decelerate' says Forrester CEO

George Colony, the CEO of analyst firm Forrester says Apple's best days are behind it and suggests the company is headed for the kind of slump that befell Sony and Disney when their visionary leaders departed. In a blog post Colony uses a taxonomy from Max Weber's 1947 book The Theory of Social and Economic Organization which …

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Huh?

whose “... legal/bureaucratic approach will prove to be a mismatch for an organization that feeds off the gift of grace.”

Dont you mean "an organization that feeds off the gift of iDiots?"

Yes I know Ill get down voted for this but common people, surely you can see that Apple is (has become?) becoming worse than Microsoft in the late 90's to early 2000's. They need to get off their high horse and stop telling people whats good for them and instead let the consumer make the decision for themselves.

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Re: Huh?

"They need to get off their high horse and stop telling people whats good for them and instead let the consumer make the decision for themselves."

Which of course is exactly what consumers continue to do, judging by Apple's Q2 figures. Now you can dub these consumers iDiots if you want, but that says more about you than them.

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jai
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Re: Huh?

seems James O'Brien is more than willing to ride that same high horse and tell us what's good for us, instead of letting us make up our own minds, so why should Apple be any different?

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Windows

Re: Huh?

I'm not going to downvote you, but statements like 'They need to get off their high horse...' make no sense- it would appear that Apple don't need to do anything; they are already doing very nicely. They do let the consumer make their own decision: Whether to buy Apple, or buy Acer, Asus, HTC, Samsung, Sony, Lenevo...

Talk about consumer choice... I believe that MS Office on OSX still has menus.

Oh, and 'idiot' is term for someone with a specific level of intelligence, not for someone who has less knowledge of, or interest in, computers than you or I might have.

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Re: Huh?

"They need to get off their high horse and stop telling people whats good for them and instead let the consumer make the decision for themselves."

They have. That is why Apple is the most successful IT company on the planet. Chin up lad, I'm sure there will be some other successful company you can whine about ;-)

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g e
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Re: Huh?

VHS / BETAMAX - one had the better marketing.

That is all.

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Windows

Re: Huh?

@Dave 126: "it would appear that Apple don't need to do anything; they are already doing very nicely."

That is fundamentally wrong. Apple do need to do something, but they can't because they are tied to their premium priced product strategy. The Smart Phone market is currently a premium early adopter market. (To put that into perspective, there's over 5.7 Billion active mobile phones in the world now and yet only around 10% of them are currently any kind of Smart Phone, let alone high end high priced Smart Phones).

The Smart Phone prices are currently high but they are falling and when they fall high premium priced products will look ever more out of place over time. Apple's target market has always been early adopters (and frankly part of their core market are all too often smug bastards who want to wave their new shiny shiny in everyones faces to say hey look at me, I have it and you don't type of people). They are happy to pay a premium to have the latest new shiny shiny and gloat factor but markets never stay like that. Over time, like all markets, the Smart Phone market will become every more commoditized and as it does, we will get into an ever deepening price race to the bottom and that is a race Apple cannot win.

So Apple are currently making huge profits (at the moment) but that won't continue as competitor Smart Phones inevitably loose their premium prices.

At which point, it'll be very interesting to watch what happens to Apple's over inflated share price valuation. Over the next few years wait and watch what happens as Apples sales begin to plateau out and it will happen. So like I said at the beginning, Apple do need to do something, but they can't because they are tied to their premium priced product strategy.

So currently Apple are riding high at the moment, but that cannot last.

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Re: Huh?

@Asgard

It never ceases to amaze me - the number of people whose incisive insight is so vastly superior to that of those who run these companies. Are these commenters very high-up in the IT world, and therefore have knowledge AND experience to validate their claims?

There is an awful lot of cars in the world right now. Only a very small percentage of them are Ferraris, BMWs, Jaguars. Don't see those companies wearing sackcloth & ashes and wailing "We're all doomed".

It's telling that the commenter states "...smug bastards who want to wave their new shiny shiny in everyones faces to say hey look at me, I have it and you don't type of people.."

Would that be as opposed to smug bastards who want to forcibly grab my attention and say "Hey! Look at me. I'm far too cool and intelligent to fall for any marketing crap - I'm one of the élite über-techies who's way too superior for all that"?

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Re: Huh?

Little known fact: the Betamax technology was in use by pros right up until the rise of HDTV in recent years finally put paid to it. Ever heard of "DigiBeta"? Guess what its ancestor was. (They even used the same cassette form-factor.)

Can't say the same for VHS, which only ever gained traction as a consumer toy and got its arse soundly spanked by DVD in pretty short order in the 1990s. The Beta pro range has only recently fallen out of favour, but it lasted right up to the end of standard definition broadcasting.

As "failures" go, Betamax and its descendants did surprisingly well.

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FAIL

Re: Huh?

'Dont you mean "an organization that feeds off the gift of iDiots?"'

And you wonder why people can't stand Android and its users who endlessly try to justify their purchase by talking about how "open" it is? (As in "it opens all your data up to The Almighty Google"? Thanks, but I'll pass. As a 30-year veteran of the IT industry, I know a stupid idea when I see one, and buying into Google's anti-Apple rhetoric while giving them free reign over your personal data is as stupid as it gets. At least Apple have a privacy policy worth a damn.)

Also, "common people"? At least this iDiot can fucking spell, you self-righteous, ignorant little prick.

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@T Treen

"It never ceases to amaze me - the number of people whose incisive insight is so vastly superior to that of those who run these companies."

Saying Apple need to do something is not the same as saying Apple's executives don't realise this and will not do anything. I'm sure the situation outlined is one they have considered.

"There is an awful lot of cars in the world right now. Only a very small percentage of them are Ferraris, BMWs, Jaguars. Don't see those companies wearing sackcloth & ashes and wailing "We're all doomed".

Ferarri don't make commodity items - in computing terms they are more Cray than Apple. They certainly don't even try and deliver the sort of growth that has fuelled Apple's recent rise.

Jaguar didn't make Ford any money - I don't know how it is doing for Tata. One of its approaches in recent years has been to make cheaper models just as BMW makes hatchbacks now.

Then there's Rolls Royce . . .

Apple are a long way from being in trouble but it would be naive in the extreme to think that they have nothing to worry about and never will.

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FAIL

Re: Huh?

@Ted Treen your comments are full of intentional Logical Fallacies seeking to deceive because you don't want to hear the truth and you don't want others to believe it either. So if you have shares in Apple, I suggest you hold onto them and ignore what I said (and even buy some more), because everyone who isn't blinded by deceitful people like you and Apple's reality distortion field (i.e. the majority of the human race) can see they will have the last laugh against people like you.

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Re: Huh?

One word: Elop.

I could think of others, but if you really believe the business world is full of towering intellects who never do anything obviously stupid, I have a used Pippin to sell you.

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Anonymous Coward

@Asgard

Please, darling, don't forget to take your medication. And play nice with the other kids!

-- Mom

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Nev

Re: Huh?

By "better marketing" do you mean pR0n industry adoption?

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FAIL

Re: Huh?

"At least this iDiot can fucking spell, you self-righteous, ignorant little prick."

Wow , looks like a apple fanboy threw his iPad out of the pram today.

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Re: Huh?

@Asgard

In what way is Apple irrevocably "tied to its premium business model". What a totally stupid thing to say. Have you never considered that they may be running their business incredibly astutely, by riding the curve of margin against volume? They are probably selling every phone/tablet they can make at the moment, and at the same time MAKING 75% OF THE PROFIT OF THE WHOLE PHONE INDUSTRY with the iPhone.

Why would they change this? If they bring their prices down the demand will increase but how will they make them, and the only effect will be that they will make the same overall amount of profit but over many more units, which will depress their margin and increase their support costs.

In addition, if I were Apple I would be trying to keep my market share at about 45% or so as this does not add up to a monopoly, which would trigger all sorts of problems. People, not to mention governments, don't like monopolies.

One other interesting fact is that although in terms of units sold they may only be at 45%, just look at what percentage of mobile internet traffic these devices produce. This is clear indication that people who buy iPhones keep their devices for much longer than Android purchasers do, which is not surprising given that the Android device manufacturers are so focused on hardware capabilities (because this, along with price, is the only real way they can differentiate their products) that Android purchasers are as a result much more likely to upgrade to the next big thing than iPhone users. So Apple are almost certainly winning the war of phones in use, which is key to getting developers and networks to focus on their products - the long game.

And finally just look at what a commanding position their strategy has created. How many more units would they sell if they reduced their prices (if they could make them, that is!). They would decimate Android sales if they sold them at the same price as comparable Android phones.

So in conclusion you just don't understand business strategy - Apple are playing this in an incredibly canny fashion and that is why they will still be around in the future. I have severe doubts that other players such as HTC and Nokia will - or maybe you differ on that?

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Devil

Re: Huh?

Create a Steve Jobs AI and put him in charge and watch the money keep rolling in!

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Linux

Fanboy Ferrari Delusions

Beyond the fact that no Apple product is really a Ferarri or BMW, you have the very real problem that these are ultimately computing platforms that depend on 3rd party support. The "compatibility" issues that plague computing devices can allow products to become entrenched even when they are completely unworthy.

Many have said that the Mac vs PC thing is repeating itself again.

Apple is living high off the hog for now. That will likely not last.

Unfortunately, computing devices aren't nearly as interchangeable as cars.

In truth, no Apple product is a Ferarri. Although your attempt to claim such just demonstrates the other poster's comments about annoying conspicous consumers.

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Paris Hilton

Re: Huh?

Not quite true - Betamax was technically superior but VHS had more porn available...

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Re: Huh?

@Asgard

You don't understand. iPhones aren't bought by end-users in a "smartphone market". The users rent a mobile service. With iPhone, Apple largely defines that service, which end users like very much. Apple is not selling a gadget to the end user, or even to the carrier. Apple sells the end user to the carrier, and the carrier can afford Apple's price. Other handset makers just aren't in a position to control the user experience let alone do better than Apple; they don't control the OS, and they don't control the services. So they won't get either the margins or the loyalty.

As regards Apple's "over inflated" share price, its price to earnings ratio is around 14, with earnings growing at 100% a year. Whereas Amazon's ratio is around 170, with earnings actually shrinking. Even if earnings growth stopped dead today, the P/E would be 10 within a year. The share price should actually be about 50% higher.

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I agree with the premise, but not the reasoning.

In reality, Apple will fade once people realize that iFads are bloody expensive toys, not actually useful work platforms.

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Facepalm

My gods

How could have I failed to realize that iPods and iPhones and iPads, which make the vast majority of Apple's income, and are consumer devices, are actually not fit to be your work platform? Surely Apple will go bankrupt any time now.

I hope Nokia manages soon to create a Windows 8 workstation and avoid that fate.

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Unhappy

Re: I agree with the premise, but not the reasoning.

It might already be too late.

Pushed by the top level who want to look fashionable, some business processes get forcibly rewritten to NEED an iPad. Where, in former times, a simple, £5.99, tally counter was enough for a traffic survey, it now is done with a tablet, THE tablet.

Because the beancounter doesn't want to talk about an Android ICS ("What does ICS stand for? Ice cream wtf? This is a serious business, not a playground. And as we're at it: don't buy anything that sounds like a character out of the teletubbies or comes with a Pangolin in the name, either, or you've had it!" ) tablet, they want an iPAD. These people don't vacuum clean, they hoover (even if it's a Dyson).

Because: It's a safe decision to pick a big, popular brand. If it works well, then it was well decided. If it goes bellyup, then the 'overpaid IT guys' couldn't make it work even though they were given the very best materials. No mud on the boss.

I am afraid that we will see more and more 'forced' tablet applications due to this. And that will skew the whole IT setup. I recently spoke to a 'freelance photographer' (he's not famous, guess why...), who needs to replace his 'Photoshop on Windows' workstation with a Mac, because he bought an iPad, "...and it will be much better if it is all >properly< set up."

I hope I'm wrong.

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Anonymous Coward

Re: I agree with the premise, but not the reasoning.

In terms of name conventions Ice Cream Sandwich is just as silly as Lion, Tiger, Mountain Lion, Snow Leopard, etc...

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Re: I agree with the premise, but not the reasoning.

"Apple will fade once people realize that iFads are bloody expensive toys, not actually useful work platforms"

...because there is NO money in toys. Nope, none whatsoever. Do you want to tell Disney and Mattel, or shall I?

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Anonymous Coward

Re: a simple, £5.99, tally counter was enough for a traffic survey

And people used to do the accounts in a ledger with a quill pen. Computers - hah!

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Joke

Re: a simple, £5.99, tally counter was enough for a traffic survey

Judging by the vastly over complicated spreadsheets that no one in the finance department knows how to change, which are then printed out anyway, they would be better off with quill's.

At least then they might be busy for the whole month rather than just for the two week 'month end'.

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Pint

Re: I agree with the premise, but not the reasoning.

You would find that your boss will think different (although I do agree with you personally). ICS is probably not the best example anyway, I was more thinking about the Linux (specially Ubuntu) release names. You could probably sell 'Canonical Linux 10.10' to your CEO, but 'Ubuntu Maverick Meerkat'? He'll think you watched too much Cbeebies...

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Anonymous Coward

Re: I agree with the premise, but not the reasoning.

I shall throw them away RIGHT NOW. Thanks for showing us the light! Please don't forget to tell us which other suggestions you have to improve our lives, oh illuminated master.

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FAIL

Re: I agree with the premise, but not the reasoning.

"In reality, Apple will fade once people realize that iFads are bloody expensive toys, not actually useful work platforms."

Curious... I've been doing useful and reasonably well-remunerated work on them for over 20 years.

Have you considered the possibility that your conception of "useful work" is in error?

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@Mike Moyle

You've been doing work on iPhones/iPads for over 20 years?

I have a question: where did you park your time machine?

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Devil

I'll miss it

Apple is already feeling the effect of losing its legendary Reality Distortion Field Generator. Since Jobs died, I estimate it's seen at least a 200% increase in unfriendly headlines. Look at all the sarky talk about "the new iPad"'s lack of a proper name, for instance - that would never have happened if Jobs were still around to put his spin on it.

Personally I don't get the Apple hate. Nobody is forced to buy an iThing, and the Things themselves, with the exception of the venerable iMac, are not sold as general-purpose computing devices. To complain about your iPad being locked down is like complaining that you can't compile C++ on your stereo.

And Apple still gets a lot of credit from me for fighting the good fight against DRM. Five years ago, it was the only major commercial company willing to stand up in public and say "DRM is stupid because it pisses off your customers". I noticed, because I was putting together a submission to Parliament on the subject at the time, and it was great to have one household-brand name to reference in support of my case.

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Anonymous Coward

Re: I'll miss it

"To complain about your iPad being locked down is like complaining that you can't compile C++ on your stereo"

Err, the people complaining _are_ the ones who have got their stereo compiling c++! Same people that have installed Linux on their toaster.

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Re: I'll miss it

"DRM is stupid because it pisses off your customers"

I miss that kind of statement. The sort of statement that is obviously true, but can be too easily lost between the gaps of analysis reports and user-group research.

Other Jobs ideas along the same lines

"16:9 is stupid"

"Not having menus in your Office suite is stupid"

"Flash (on a mobile device) is stupid"

I agree with these statements. I don't have an iDevice -or DevicePro- because I like my USB gadgets to be Mass Storage and cheap, and the software I use is Win only.

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Devil

Re: I'll miss it

@veti

"Personally I don't get the Apple hate"

At one time, Apple was very much the underdog, loved by some and appreciated by a few more. Most of the PC world, then having fun with bright green command lines on a black screen, were even unaware of Apple and if they vaguely remembered the name, didn't know anything about them.

Now for a variety of reasons (I'm not going to get into any spats about these) Apple is the Wunderkind of the mainstream media, and few companies have a higher public profile.

It does seem to be that one of the less pleasant aspects of human nature is the desire to see an underdog really built up, then to take a perverse pleasure in knocking them down again.

Then there is the willy-waving (generally by those with metaphorical shortcomings in the appendage department) who cannot see ANYTHING becoming popular, without showering it with contemptuous disdain proclaiming that "If it's popular, it must be because it appeals to sheep and I hate it 'cos I'm too cool & special for all that".

Then again, like with cars, there are those who will knock any car which is different to the one they've bought, as they have to justify what they are tied into, and in denial that they might have made the wrong choice.

The again there's also simple jealousy & sour grapes...

No doubt I'll be buried with down votes for sussing out some commentaries whose denial runs deeper than I thought.

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Re: I'll miss it

>Err, the people complaining _are_ the ones who have got their stereo compiling c++! Same people that have installed Linux on their toaster.

I'm more apt to believe they're just noobs who invested their time learning some web language like PHP and are afraid it will become less relevant as more people are using mobile apps rather than web sites. Because learning something new is hard.

Or they hate apple because the TechJournos told them to and they're lemmings with no sense of wind direction.

ProTip: Tech Journos usually can't predict shit, that's why they're tech journos.

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Joke

Re: I'll miss it

The real geeks here have Linux installed on a dead badger

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Linux

Re: I'll miss it

No one ever tries to pretend that the toaster can replace your PC.

Apple and the fanboys love to advocate that kind of thing.

Now if I have a video appliance of some sort, I expect it to play my home movies or shows I've recorded off of cable. That's a fundemental use case relevant failure. It's hardly comparable to running gcc on my VCR.

Fanboys seek to lower expectations and berate and misrepresent anyone who isn't drinking the kool-aid.

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Anonymous Coward

Might be right

People have been predicting the death of Apple for as long as I can remember. It hasn't happened yet. I'm sure there was a site called 'apple deathwatch' or something like that. Last quarters results seems like holding it off a little longer.

Things cycle. In turn we've seen Sony/Erricson, Motorola and Nokia at the top of the heap (if you're as old as i am. At one point Sony could do no wrong.

Ford Sierras used to be popular, but BMW sell more 3 Series.

Get off on shouting I hate apple loudest as much as you like, one day the decline will probably happen. In the meantime enjoy the fact that you have someone to vent your spleen against, while you wait for your next target to come along.

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Anonymous Coward

Re: Might be right

You might be amused by this collection of Apple Death Knells.

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Anonymous Coward

Re: Might be right

I do believe that's exactly what I was thinking of. Thank you

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Re: Might be right

Hehe, the late-nineties Wired article was a classic of this sub-genre: It was titled "Ten things Apple must do to survive" or something similar. It gave Apple such pearls of wisdom as 'license your operating system". IIRC, Apple under the return of Jobs didn't follow a single suggestion!

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Re: Might be right

Remember the mid 90s computer shopper.

It had a Mac section (IIRC it had something to do with El Reg's own BOFH...) that started to become a little surreal as it looked like the writing was on the wall for Apple...

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Re: Might be right

The thing about predicting death, is eventually, you'll be right.

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Trollface

Assuming that...

Apple have actually innovated. Style over substance any one?

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FAIL

Re: Assuming that...

No. It should be "style AND substance".

As Apple have proved, it is not necessary to have to choose one [i]or[/i] the other, nor should it be. You can clearly, demonstrably, have both. At the same time. In the same product.

Apple have been proving this very point since the late 1990s. They've barely had a dud quarter since 1998; even their Mac sales have been kicking the arses of giants like Dell and HP, quarter on quarter.

If, after well over a decade, you still don't understand why Apple's kit sells, you are not only missing the point, you are part of the problem.

As for "innovation": Where the hell were Nokia, Motorola and HTC when Apple released the original iPhone? Did they not have any similar products of their own in the works? No? Why the hell not?

And where were they all when Apple released the iPad and proved, yet again, that it's the whole user experience, not merely the hardware, that had been the problem with the form-factor up to that point? (To all those who claim that it's just "a big iPod touch": has the penny dropped yet? No, I thought not.)

Technology that nobody can work out how to use is a pointless waste of time, money and resources. If you genuinely want to help save the planet, stop making nasty unusable shit that nobody wants.

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Re: Assuming that...

"If, after well over a decade, you still don't understand why Apple's kit sells, you are not only missing the point, you are part of the problem."

What problem?

"If you genuinely want to help save the planet"

?! I really think you're on a different topic from the rest of us.

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Does this guy know anything about Cook?

I wonder if George caught the earnings call yesterday where Cook announced that he eschews a legal approach to competition as his preferred option.

Cook is the principle reason that Apple is a moneymaking machine today. There is nobody in the industry better at production control and supply chain management. Apple's gross margins are now running at 47.4%, which is without precedent and doesn't happen by accident. Jobs was a product guy. Cook turned those products into colossal mountains of money.

I also wonder if Colony realises that this supposedly grey bureaucrat (as he paints it) has pretty much run the company for quite a few years now, not just now but also previously as Jobs's illness advanced. It's sad, but Jobs planned for a future where he wasn't around and Tim Cook and Jonny Ive, were specifically groomed by Jobs to take over the reigns.

If Cook can hold onto Ive, there's no reason why Apple's success can't continue for a little longer yet.

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