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back to article PEAK APPLE: Fondleslab giant no longer world's biggest biz

Apple has lost the title of world's biggest company after a share slide allowed oil giant ExxonMobil to take the top spot. Fears over future sales for iPhones and iPads sent shares in the fruity firm falling on Wednesday from $420.27 to a low of $398.11, before recovering to end the day at $402.80 - a drop across the day of 4.16 …

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lack of innovation

Apple are losing market share as a result of a lack of innovation. They peaked with the iPhone 4 my iPhone 4 owning friends are all quite happy with their phones and even though they are mostly committed to iOS they see no reason to upgrade because they don't see the 4S or the 5 as offering them anything new.

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Re: lack of innovation

I'd go so far as to suggest that they peaked with the iPhone 2; by the time the third iteration came along, Android entered the market, and others were making better smart phones for less money. For example, compare the iPhone 3 to the HTC Desire.

Apple have historically managed to charge a premium for their devices by entering the market first and being the only option. They haven't had any real innovation since bringing the concept of a capacitative touch-screen phone to the masses. Since then , they have had various iterations of the same thing, even teh iPad could be considerd to be an oversized iPhone without the ability to make calls (insert joke about iPhone 4 attena, and it not being able to make calls either here).

These days, the market for such devices is saturated. There is a global recession, and people are less inclined to pay a premium for something that is perceived to be of higher quality (whether Apple products are of higher quality than their competitors is another issue; personally, I have never seen any non-Apple phone with a cracked screen, but I've seen plenty of craked iPhone 3 and 4s). Unless Apple innovate, they will die, and historically, most of their innovation has been from their marketing department anyway - they excel at taking ideas from others and presenting them as something new. Unless they have something new up their sleeves, then they will go the way of others like DEC and IBM, and become an irrelevance.

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Wam

Re: lack of innovation

I think you'll find IBM are still none-too-shabby in terms of market value .....

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Re: lack of innovation

I think you'll find IBM are still none-too-shabby in terms of market value

indeed, I gave two examples; DEC, which used to be a big name, but went under, and IBM, which used to be the de facto PC manufacturer, but no longer makes personal computers.

Which way will Apple go? To oblivion, or irrelevance?

It is entirely conceivable that they will find a new market to break into, or strengthen other markets they are already in, a la IBM, or they may fail entirely, like DEC.

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Re: lack of innovation

I thought DEC were bought by Compaq who then were bought by HP.

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Anonymous Coward

Re: Don't worry about the share price

You need to grow up - Tim Cock indeed - what next CrApple - ho ho ho.

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Re: lack of innovation

It's not just lack of innovation - it's negative innovation. (Is there a proper word for that?)

Final Cut Pro - once an industry leader, now a toy that sent former fans scurrying back to Adobe.

OS X Server - likewise. And supporting hardware was killed. (I don't think the Mac Mini counts, for non-toy users.)

iPhoto - features keep disappearing or being moved.

MobileMe - all your websites gooooone.

iCloud - the only cloud with data you can't share with friends and family.

Maps - dear god... To be fair it's getting better, but it's still way behind Google or even Nokia.

Apple TV - lolwut?

Mac Pro - not refreshed for a long time, and no longer available in the UK Mac Store.

So billing a thinner iPhone or a smaller iPad as the Best Innovation Evah - while Samsung run ahead with the S series - is the least of Apple's failures.

Apple in the 2000s produced a steady stream of consumer game changers - iTunes, podcasts, iPod, iPhone, app store, Macbook Air, iPad (just), and respected pro-grade software. So the current state of play is a sorry picture.

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DJO
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Re: lack of innovation

They haven't had any real innovation since bringing the concept of a capacitative touch-screen phone to the masses.

I think LG might dispute that, their Prada came out a few months before the first iPhone and was blessed with a capacitative touch-screen. Recently Apple only seem to be innovative but really they're all about marketing.

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Thumb Up

Re: lack of innovation

Actually I kind of agree, my new phone is an iPhone4 that I got for free as a cast-off (broken home button, 99p fix) it's the easiest iPhone to work on, plenty quick enough, my Sony Xperia died (it was sad, I sent flowers), although there's more iPhone apps, there's not as many completely free "technical" ones as Android (such as ssh/vnc which are very limited on the iPhone) and iTunes is awful, there's almost no reason to "upgrade" from the 4 if it works, I kind of like the solid feel to the 4, but I do miss the cancel button!

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Coat

Re: lack of innovation

So an irrelevance cubed then?

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Re: lack of innovation

!it's negative innovation. (Is there a proper word for that?)"

I think I'll coin dissinnovation. I considered nonnovation but that sounds static rather than negative,

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Re: lack of innovation @Kebablog

Ah, but why did DEC become a target for a Compaq buyout.

They had been in decline for some time, but licensing problems with Intel (Intel infringed on some DEC patents IIRC, but DEC suffered as a result - never really understood how, but they did) and problems further developing Alpha meant that DECs share price dipped, and Compaq made an offer the shareholders could not refuse.

Compaq probably over-reached themselves, and coupled with a loss of market share meant that they became weak themselves.

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Joke

<<troll>>

Hmm, looks like Apple shares are as reliable as BitCoins

<</troll>>

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Devil

Peak hysteria

Peak hysteria for these things was around the iphone 3 / ipad 2 mark. Now everybody has seen the things and owning one no longer makes your an artistic progressive intellectual forward-thinking liberal.

That plus for normal people that actually use the devices rather than just show off, there isn't much in the way of killer apps that won't run on last year's hardware..

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Bubble bursts

That's what bubbles do. For Apple's valuation to be financially plausible, you needed to assume annual growth in the high 20% or better for a decade. So as soon as anyone thinks they've spotted a flaw in their unrealistic assumptions, this is what you get. Loads of people will still have made loads of money, of course, just not those that bought at the top.

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Re: Bubble bursts

That's the problem. It's not that Apple have got worse, they still make more money from iPhones and iPads than they ever have. They're gradually losing iPad market share, but in a still growing market, so actual sales are still rising.

The problem was that the markets priced them as if they'd got new, growing, markets to enter still, and so could continue with their massive growth of the past. Which isn't currently the case. It's not a problem with lack of innovation, or a fault from Apple, it's that Wall Street got the price wrong.

A successful Apple TV would struggle to compete with iPhone/iPad type growth, because TVs are a mature market with lower turnover than personal, mobile gadgets. There just ain't that many markets growing at over 100% a year with yearly or 2-yearly replacement cycles in the consumer sector.

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Anonymous Coward

Re: Bubble bursts

What do you actually base that on? Apple could have zero growth and just make the same profits each year and the share price would be cheap.

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Re: Bubble bursts

In that case, you should fill your boots with Apple stock, while it's so cheap and the rest of us dunderheads foolishly undervalue it. And if you really believe that, I own an attractive bridge you may well be interested in.

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Re: Bubble bursts

Your comment would be spot on, if Apple did not pay out shite dividends. 2.65$ in 2013, determined while share price was still way over 600$, and 137 billion $ (BEEEEELLION for the El Reg editors) cash reserves. The only way to make money on Apple is by buying and selling their paper. Which is kinda funny, for a computer company.

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Happy

Toys and Oil

The fact that Apple was ever the planets most valuable company is mind boggling. At the end of the day none of their products are necessary to modern life whereas petroleum and its derivatives are used by everyone but the most isolated tribes.

Apple is in fine shape financially & will probably hang round for a long time. Their value is simply falling inline with reality vs that imposed by rampant speculation.

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Anonymous Coward

Re: Toys and Oil

Apple shares now look cheap - look at their PE ratio then take the cash off their market cap and look again!

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Re: Toys and Oil

How necessary is oil vs iPhone is not relevant to the company value. The days of cheap oil are long gone and oil companies are investing more and more for new finds and current production with ever-decreasing returns... I don't have the figures but I would guess that Exxon's turnover is probably more than Apple's BUT they have MUCH higher expenses so less profit and profitability

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Happy

Re: Toys and Oil

It is hugely relevant, especially in medium and long term views. Investing in petrochemicals still makes me money and will continue to do so long after Apple is part of someone else's portfolio. There was never any reason in the insanely high Apple valuations & it only benefited those who make their money through manipulating stock markets for short term gain as opposed to investing for long term gain/safety.

I suppose it depends on how you manage your money. I prefer to put mine in places where I don't have to screw with it all the time with the knowledge my money is secure. Others take a different path but I'm too lazy and not excessively greedy :)

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Anonymous Coward

Yet people are still buying iProducts and not surprised either. Apple are still growing - sales of iPads were up almost 50% in the Christmas quarter compared with the same quarter 12 months ago. Apple are building and integrating the whole system - phone, tablet, Apple TV, iTunes and apps with multiple revenue streams. Samsung are flogging Google's OS and it won't look so rosy for them when HTC / others come out with the best Android phone.

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Alert

Apple - the new Nokia, Blackberry

Creaky market giant spits out old, slow, boring phones and OS.

Nimble, smaller competitors run circles around them. Market share begins to plummet.

How long until they are down in the 2% - 6% market share range worldwide like Nokia and Blackberry? I'd give it about 1 year.

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Anonymous Coward

Re: Apple - the new Nokia, Blackberry

Market share - of course in a market where any cheap phone is now a smartphone the market has grown rapidly and Apple's share has shrunk but the point is they are selling MORE of their phones and pads. Sales of iPads last quarter up almost 50% on a year before - if that were your company would you be complaining?

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Anonymous Coward

Re: Apple - the new Nokia, Blackberry

I dunno. I was in M&S this evening with the missus looking for a dressing-gown for the young lad. We couldn't find one but were suprised in our hunt by a pro-active salesperson who asked if he could find one for us.

He promply pulled out an iPad and started searching stock at the warehouse.

He was the first I've seen - there's a lot of M&S shops around and if they are supplying their floor staff (even half of them) with iPads - that's a lot of iPads.

Also of interest, we were at a trade fair just recently and almost (possibly 90%) all the vendors we spoke to (and an awful lot we didn't) were using iPads for data collection and appointment management.

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Pint

Let it go.

It is only a slight exaggeration to say that every hit in a Google search for "fondleslab" links back to The Reg.

The one geek coinage that has failed to gain traction on Slashdot ---- where hitting on the "luser" has always been fair game.

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Devil

Re: Let it go.

I like fondleslab. And they should bring back lappy too. Which I believe was got rid of by user vote. Curse them for their democratic ways!

My favourite is pay-by-bonk. This may say rather more about me than I'd like to let on...

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'Flaptop' surely.

Nobody is ever going to say 'fondleslab' out loud, but 'flaptop' - that works.

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Re: Let it go.

Fondleslabs, like commentards, Bulgarian airbags, the milliWales and the speed of sheep in a vacuum, is part of El Reg's lexicon and community culture. If these things annoy you, perhaps you might find Ars Technica more to your liking? It's right over there. --->

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Re: Let it go.

Slashdot? Pfft. It gained traction with Bill Bailey.

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Joke

I might buy some...

...when they hit 0.50c.

Just to frame the certificate.

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It's what Steve would've wanted

Really.

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(Sarcasm)

Only second biggest company in the world! Oh no! How he mighty have fallen!

(Sarcasm)

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Anonymous Coward

By perceived value only

There are companies far larger and producing goods more important to everyday life but don't hit the headlines. Shares don't bounce all over the place, they are fairly consistent every year so aren't attractive to the speculators. The question is who is going to be left holding Apple shares when the bubble pops? Better hope it isn't your pension fund

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Meh

Re: By perceived value only

Shares don't bounce all over the place,

Apart from when some bunch of arsehats take the global economy outside and shoot it in the head of course.

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Anonymous Coward

Re: By perceived value only

So which are these larger companies?

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Re: So which are these larger companies?

Well, aside from Exxon Mobil, there's Royal Dutch Shell, Walmart, Sinopec Group, BP, China National Petroleum Corp., Saudi Aramco, Vitol, State Grid Corp. of China, Chevron, Conoco Phillips, Toyota, Total, Volkswagen Group, Japan Post Holdings, Samsung, Glencore, and Gazprom, all of which are bigger than Apple in terms of revenue.

http://en.wikipedia.org/wiki/List_of_companies_by_revenue

See Apple down there at number 19?

Most of these corporations also have their fingers in a lot more pies than Apple, which is why you won't see their share values going up and down like a two-bob watch.

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Holmes

Purely anecdotal, but...

In my dept at work, out of about a dozen people, all bar one had iPhones this time a year ago. Fast forward to today and there are only two of us left with iPhones. I'm still using my trusty 3GS and the other "fanboi" is on a 4. We're both still on iOS 5. Neither of us have any interest in the iPhone 5 or iOS 6. In fact, strangely enough we were talking about this today and both agreed that if we did stick with Apple, we'd not be interested in anything beyond the 4S, mainly due to its pretty decent camera.

Everyone else in that dozen or so former iPhone owning people has moved to Android and more specifically Samsung. Even the former solitary and resolutely non-iPhone "I'll never get a smartphone" user has succumbed to the lure of the Galaxy Note. Oh yes, and one slightly technophobic loon has bought himself a Windows 8 phone because "the man in the shop said it was easier to use than an iPhone". Reasons given for all these switches have generally been along the lines of boredom, and/or fancying a change.

As I say, purely anecdotal and a small sample but, if these attitudes are the norm, it doesn't bode well for Apple, if they don't pull something new and exciting out of the bag soon and the iPhone 6 turns out to be just "more of the same".

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Gimp

reports of death of apple too soon?

I'm not sure apple is doing too badly?

My sister has just got an iPad mini, thrilled with it. Wife loves her iPhone 5, kids facetime and minecraft on iPod touch with friends including overseas. iMessage stops us paying extra for SMS.

The only bad tech purchases were my nephew who was bought a windows 8 laptop for school work (disaster). Primary school has 28 iPads for lessons, with airplay to appleTV plugging into the projectors for teaching.

Apple may be a bit too consumer focused for esteemed El Reg readers, but its doing very well with all the ordinary folks I know.

I think Apples line up of iMacs / Macbooks / iPads / iPhones is still the best in class, with room to grow market share. I dont see consumers gladly choosing microsoft (except maybe xbox), so most PC makers are in trouble.

The Galaxy phones look nice enough, but the rest of android is not making money.

Apple is not perfect, but they are pretty damn good.

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Facepalm

Re: reports of death of apple too soon?

They are apparently "too consumer focused" for their investors, too. Which was kinda the point of the article.

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new smarties v older smarties

I like to keep my phone in my shirt pocket and as if by some devine mechanism, my iPhone 4 fits so well you would think it had been designed for my shirts. The width is perfect and the length keeps it just invisible at the top.

Both daughters have iPhone 5. This phone does not fit. It is too tall and those extra mm sticking out look ridiculous

Looking at some of the competitor phones now available though, I can't see one that I could but into my shirts. they all appear to be turning into tablets. As well as being taller like the iPhone 5 (and taller in some instances), they are all too wide and I would need all my shirts remaking (and I don't think primark do that).

It looks as though I'll be staying with the iPhone 4 (Running iOS5.1.1) until it finally gives up the ghost.

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I've currently got an iPhone 4S and an iPad Mini, both jailbroken on IOS 6. If someone had asked me a year ago if I was tempted by Android I would have said no. These days I find myself lusting slightly over the S-pen on the Galaxy Note, dampened somewhat by the stupidly large size of the phone.

Given Apple's new mania for forcing restored devices up to the latest IOS I'm getting nervous about how precarious my jailbreaks are. For me nothing beats IOS jailbroken: better quality apps (at the moment) and the freedom of a file system. But long-term I can see myself moving across to Android though because of Apple's unwillingness to give users control of their hardware.

I'm keeping a list of the apps I use on my iDevices and their Android equivalents when I find them. There are some notable gaps ATM but hopefully they'll be filled in the not too distant future.

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FAIL

Ask not for whom the bell tolls...

So Cook and his buddies, who for all these years have labored under the glaring misperception that they were actually "innovators", are now having to face up to the reality that, just as last time, once the Master Thief has gone they don't have squat between them in the way of actual innovations. Apple will slowly implode, shore itself up for the next few years with their massive bank balance, and then begin the predictable cycle of selling off various sectors of the company to "streamline their portfolio" until there's nothing left but the core which is picked up at a premium by Facebook (to diversify its portfolio naturally) and the FaceTablet finally spews into existence and crushes all before it.

Or they could kick out the dead wood and start offering bigger salaries to Google employees to come and do some actual innovating for them and invent the new shiny shiny themselves for a change. Could go either way.

Fail. Because they will.

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