First, I'm going to start this article by telling you two seemingly contradictory statements, and then I will explain why they matter and aren't conflicting.
1) I love Apple. I love the company. I love what it stands for. I love its imagery. I love its origin story. I love its legacy story. Steve Jobs, albeit an irrefutable a$$ hole, was a visionary whose team went on to build some ungodly devices. Modern Magic.
2) I don't own a single Apple product, device, or stock. I have never owned an Apple product.
Nothing within this document should be taken or construed as Financial, Legal, or
Investment Advice under any circumstances or pretenses.
This document is created for speculative and entertainment purposes only.
Please consult a Professional Financial Adviser before making any Financial Decisions.
Without Prejudice, within and in its entirety
Back in 2002, when the iPod was raging, and my friends all bought one, I wanted one. I coveted that device. It was unlike anything ever made by any other company. It represented more than just music, more than just a device, and more than state-of-the-art engineering (at the time). To that younger me, it was the American Dream in the palm of my hand. An American company engineered the iPod, which was unmatched in every aspect.
Design.
Quality.
Capability.
Freedom.
The device was durable, sleek, and conceptualized as something from a Sci-Fi movie. I had to have it. I had to own a piece of this impeccable future tech, brought to us today and made affordable to almost everyone at the 2002 price of $299. A steep hill to climb for a student working less than part-time and making barely a quarter above minimum wage (which was far lower then, if you recall).
I worked, I saved, and the day came when I finally had the money. I borrowed a co-worker's credit card, and I made that purchase. Finally, the future was to be mine.
The future of Technology.
The Icon of the Silicon.
The package I asked to be delivered, the summary of my blood and sweat, wrapped within that sleek case - never came.
I wanted a refund. I wanted an investigation. How can a piece of mail 'disappear'?
The owner of that credit card refused to file a refund. They didn't understand the process and were more concerned about their relationship with their credit card provider than they were with my dearest loss. I was powerless but unperturbed.
I'll save again, drive right to the store that sells them, and buy it myself.
That was 20 years ago, almost to the month and day as I write this.
What followed, looking back, was a series of events best summarized as 'Life Happens.' My income was rarely as disposable after that point until much later. Bills. Loans. You know the story.
But I never stopped coveting. I watched everything Apple did. If Apple was mentioned in a Newspaper or on the news, I dropped everything to digest it. To hold a piece of that dream in the palm of my hand, even if it was entirely in my imagination.
Fast forward to 2007, the seminal event which shook the world with the launch of the iPhone One. I still get goosebumps thinking about it. Sometimes, I even go onto YouTube to relive that moment one more time; the grand and most significant technological reveal in modern history.
The iPhone changed the entire world, analog and digital. The true definition of the 'Smart Phone' market segment that made all previous 'smart phones' entirely obsolete.
At the time, Blackberry was the superior device in the retail consumer market before the above event happened. Unfortunately, what occurred over the next 15 years of product development was - disappointing.
The screens got bigger; the phones got faster; the data bandwidths and media capabilities massively increased. Yet, the iPhone stayed relatively the same. More pixels, more bezels, glass instead of plastic – same U.I. style. A U.I. design fit for children and the elderly. The buttons were big, the apps were clear, the settings were fixed, and "don't you even dare" try to change it.
Apple Inc. v. Samsung Electronics Co.
Cue 2011, Direct from Wikipedia:
"Apple's multinational litigation over technology patents became known as part of the mobile device "smartphone patent wars": extensive litigation in fierce competition in the global market for consumer mobile communications. [3] By August 2011, Apple and Samsung were litigating 19 ongoing cases in nine countries; by October, the legal disputes expanded to ten countries. [4][5] By July 2012, the two companies were still embroiled in more than 50 lawsuits around the globe, with billions of dollars in damages claimed between them. [6] While Apple won a ruling in its favor in the U.S., Samsung won rulings in South Korea, Japan, and the U.K."
Wikipedia
One of the first signs of a death spiral, especially in rapidly evolving technology companies, is frivolous lawsuits defending market share. The Apple vs. Samsung debacle, which held the newspapers in awe for years, was a disgusting abuse of not only our Patent Systems but a further abuse of the courts in, as quoted, 50 different lawsuits across ten countries. A litigant bloodbath. No longer could Apple battle and compete in the marketplace, especially of ideas; they sought the upper hand, fighting over beveled edges and app animations – which shouldn't even be patented when the core object becomes, and is based on, a universal.
Imagine, if you will, that Apple won those lawsuits for more than damages. Imagine American Courts (or even foreign) had upheld their claims to ownership over the entire design and concept around, what we now know, as the modern smartphone. The market limiting factor of that possible scenario is both disastrous for competition and innovation, with far-reaching consequences for market segments far removed from personal devices.
Fast forward to this year:
Apple's latest innovation is the Apple Card (Credit Card), and Samsung releases its fourth iteration of a phone whose screen folds in half, in both a flip and tablet style. A sheer feat of engineering and a marvel in itself.
Partially based on their foolishness, Apple must wait for patent expiry to access this 'revolutionary technology.' Within the United States, patent expiry applies from the first filing of a patent, assuming no further 'core' changes to the underlying design. Which means Apple can potentially access this engineering design by the year 2039? (Don't quote me, Patent Law is a mess)
Recent patents reveal Samsung is also working on a phone that folds in 3 places. At the same time, Apple is fixated on T.V. offerings (Counter to the Unplug Movement), an Amazon Alexa copy-cat device (Alexa is superior, directly accessing Amazon's Ecosystem and suite of software), and minor tweaks to their (now entirely outdated) previous product offerings. Their computers are worthless for high-end gaming, their device security is just as permeable as any other, and their closed Ecosystem is now entirely a limiting factor instead of a curation decision.
All of this combined isn't enough to end Apple, as we understand. But, unfortunately, the ultimate end will probably come from a direction almost unexpected today. A legislative path that already has its lobbying groups; which has seen laws and bills drafted, passed and gained traction in various markets along with good public perception and polling:
Own-Your-Data Legislation and the 'Right to be Deleted'
That's right. The only thing that holds Apple's entire business model together, at this very moment, is not the 'Luxury Brand Segment,' which is a marketing strategy. Instead, it's the Ecosystem.
Apple knows this. They fiercely defend their Ecosystem and have since the failure of those international lawsuits mentioned above. (I consider 400M payouts an abject failure as that wasn't the fundamental objective of Apple)
While I have yet to learn of any specific planned legislation targeting walled-off Ecosystems, there have been various lawsuits regarding access rights to those curated walled gardens. Given the above, the evolution of legislation, and the nearly-inevitable further decline of the fruit-logo behemoth in their product offerings: It is only a matter of time at this point. The demand will flow from their own customer base, a sentiment already stirring among them.
Caricatures of the Political Spectrum and Lessons Learned:
One of the adages of business is that once a company has made it past the Startup phase and entered its market-share capture/retention phase, a point that every business must come to grips with; you start with a Creative Liberal and grow with a Staunch Conservative.
Where the Creative Liberal caricature moves fast, breaks things, and is more concerned with the presentation than the destination, the Staunch Conservative is your typical manager type. Where Steve Jobs was the passionate Liberal-type who expected everything and accepted nothing less than his pure and evolving vision; his counterpart is found in the careful, precise, and steady hand of a captain leading a crew through tumultuous waters but who refuses to risk capsize for glory.
Where Steve Jobs started Apple, was fired from Apple, then returned to Apple and built it into effectively what it is today - Tim Cook and his fundamental understanding of core operations armed the company with a steady growth curve towards a 5x increase in Market Value since Mr. Jobs' death. In addition, he continued to launch multiple safe but highly profitable product lines on offer by his competitors/others. He steered Apple stock directly into the hands of almost every major Pension Plan and Central Bank Asset Reserve Account even worth a mention around the world.
Tim Cook has done and continues to do a fantastic job managing Apple, but that's all he's done – he manages it. He doesn't inspire it. He doesn't lead it to new heights of technological achievement. Instead, he, by his caricature and (presumably) pressure of his board, chairman (Arthur D. Levinson), and every Pension Fund and Reserve Account referenced above – wants him to do.
Looking back, Steve Jobs should have been terminated sometime around 2009/10, and the company should have been, rightfully, steered forward as it is being done today. Of course, it's difficult to say if this would have prevented the above-mentioned Apple vs. Samsung debacle, but one can only assume (or hope) such a risk would have been better considered at the very least.
When avoided, the alternative to this lesson is the Facebook/Meta $36 Billion sinkhole that Mark Zuckerberg has dug for himself. Unfortunately, Mr. Zuckerberg thinks himself objective enough to bypass the adage or even capable of such a grand-scale maturity.
He isn't.
As it stands, Apple is positioned for long-term stability and a near-constant supply of an entirely similar and not-at-all impressive lineup of software, services, and devices. It stands to be seen whether the few but severe external threats that face Apple will ever amount to anything more than a few cheap headlines in future newspapers. Given their heavy entrenchment in almost all corners of Global Finance and locations of Geopolitical Influence, and assuming they can keep the China file stable, so will Apple for another 5 to 50 years.
Whereas, and perhaps the most exciting, a sudden shock to this system of accounts and the core business of Apple would be both fascinating to watch and thrilling to write the book on.
Too many variables.
In the end, I love Apple. It’s one of America’s greatest stories and exports. Yet, I’m fundamentally displaced from its core product as a technology aficionado. Apple hasn’t made a product ‘for me’ in 20 years, and I have no reason to believe that will change over the next twenty or less.
Apple - Do Better, or else.
As always,
Farewell and Good Luck.
-Dark Philosopher
Trends Forecast
Company Profitability is expected to increase with Inflation Pressures and further price increases in the 'Luxury Price Segment,' which will ultimately price out customers slowly, then suddenly, as macroeconomic factors deteriorate,
Apple Credit Card for Product Purchases (Including other Micro-Loan Providers) can extend or even reverse this trend temporarily while creating new issues,
Battery Technology limitations will ultimately lead to stagnation of capabilities and power output without engineering breakthroughs,
Will lead to Hardware vs. Battery Choices by Manufacturers/Customers,
Fixed design choices artificially limited by previous International Patent Wars (Apple vs. Samsung, Others) have begun and will ultimately stagnant the industry,
External Threat:
Own-Your-Data Legislation and the 'Right to be Deleted.'
Black Swan Possibilities
Apple utilizes international capital, purchases competitors during the next downturn,
Patent Wars leading to Acquisition Wars, Further Stagnating Industry,
Congressional/International (U.K./France Likely) Anti-Competition/Anti-Trust Investigations leading to Forced Patent Expiry for Market Health, Domestic Market Knock-on Effects,
Public Backlash from Cloud Data Theft, Ecosystem Traps, Price Increases without Equitable Hardware Increases (Perception or Reality),
Patent Control by Competitors or Apple over the next technological breakthrough (High-Efficiency Batteries, No-Charge Batteries, or Cutting Edge Hardware/Interface Improvements)
Silicon Valley Myth & Prestige Loss
Unknown Variables were Monitoring
Future Expected Planned Obsolesce Legislation
Impacts on the Personal Device Market? Inclusion, Exclusion, or Exception?
Will this alter the production cycles? 12Mo – 24/36Mo or longer?
Luxury Brand Segment
Growth or Loss of Perception?
Critical Event – Apple Car: If it Fails, Destruction to Brand could be Limitless
Apple Eco-System Trap
Reject or Accept? Anti-Trust Actions?
If the Ecosystem is forced open, what is user retention?
Apple's Commitment to Data Security and Hardware
Timely Crypto Integration?
Subsequent Revolutions in User Interfaces – Projection or Implant or Otherwise
Does Branding Hold/Strengthen when it's no longer a U.I. Device?
November 16th, 2023 - Fixed Layout, Format, and Signature