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  • Return to the World of Wacky Apple Theories

    January 25th, 2011

    When Michael Dell, in one of the major bone-headed statements of the last century, suggested that Apple should close down and return all the money to their investors, he was only echoing the conventional wisdom of the time. Apple was in trouble, losing sales and hemorrhaging cash, so it couldn’t possibly be saved.

    History shows that, when the dark times are here, it’s sometimes possible to come back from a near-death experience, persevere and profit. Steve Jobs is justly credited with saving Apple, and part of that skill meant hiring the right people to keep the company going and fulfilling his visions. That’s expected to continue even if his sick leave proves permanent. Current speculation has it that COO Tim Cook will rise to CEO, and rely on a talented staff of senior executives to continue to conceive insanely great products.

    At the same time, recent articles have offered brief profiles of prospective Apple CEOs, rating their prospects of taking the top job. But the truth is more mundane: Apple’s board reportedly has a succession plan in place, the appropriate executives already know their place in the “New Order,” but the fine details are being kept secret for competitive reasons. But if Jobs leaves, for whatever reason, and I’d rather hear that it’s the result of his desire to retire and enjoy his life with his family and friends rather than something more severe, the transfer of power will be fast and smooth.

    Now one of the crazier stories in recent weeks raised the possibility of Apple being a potential acquisition target. The potential raw numbers were calculated, but, with a market valuation in excess of $300 billion, it’s hard to think what company has deep enough pockets to even make an offer. More to the point, Apple is still growing rapidly, so there’s no incentive to sell, and no possible benefit.

    During the years when Apple was in difficult shape, the CEOs of the time did try to sell off Apple, but the deals were never consummated. The tech world is the better for their failure to dispose of Apple. In the normal course of events, such a merger would have retained the Apple logo, but today’s Macs, if they still existed, would probably be running Windows. Very few corporate mergers are done for those alleged synergies in goals and execution. They’re done to remove a competitor. The exceptions are when a small company is acquired by a larger one strictly for its technology, the sort of acquisition that both Google and Apple do from time to time.

    But a story about someone acquiring Apple, and perhaps only Exxon would be able to raise enough capital, can sell newspapers and get hits, so it doesn’t matter if the possibility is little to none. Sure, if Apple hit bad times, with years and years of flagging sales and falling profits, perhaps under new leadership, an acquisition might make sense. But not now, and not for the foreseeable future.

    The other stories amount to having Apple ape the product strategy of a competitor in order to advance sales and growth. One columnist, unnamed to avoid embarrassment, once suggested that Apple replace the Mac OS with the Windows kernel, and affix a Mac shell upon it. Fat chance!

    The other lame suggestions usually revolve around products, features, or strategy that Apple must adopt post-haste in order to survive the creeping competition from — you fill in the blanks. Once it was the growing lineup of iPod killers. Now we have iPhone and iPad killers in abundance, and Apple needs to open their walled garden in order to survive. Isn’t that what allowed Microsoft to become king of the PC hill?

    No, I’m not going to go into the fine and dirty historic details of how Microsoft came to dominate the PC industry, and licensing MS-DOS, and later Windows, to anyone who paid the price, was only a part of it.

    Let’s not forget how Microsoft’s “open” PlaysForSure digital media player initiative failed. Microsoft created its own walled garden with the Zune, and that failed too. So it’s not necessarily the open versus closed question, but providing the best possible user experience to the customer. As Tim Cook recently suggested, regular people don’t want to become system integrators. They just want their gadgets to work.

    This is where the Android OS, despite rapid growth by flooding the market with cheap gear of many models across many carriers, suffers seriously. When you buy a smartphone with the Android OS, and you may not know what it’s running until you see the fine print, or recognize the interface or features, there’s no assurance that you’ll be able to download major software upgrades. Not now, maybe not in the future, and that depends on the whims of carriers and manufacturers. You can’t even be sure that you’ll have the same OS skin, search engine, or standard bundled software. Verizon Wireless, for example, replaces Google with Bing as the standard search engine on many of their Android smartphones, and installs loads of crapware — extra apps you didn’t expect or want — which you can’t remove unless you hack your phone with a vanilla version of the OS. If that’s openness, do you really want it?

    And don’t forget the companies who offer tablets equipped with versions of Android that aren’t even certified for use in anything but smartphones.

    None of this means that another company can’t beat Apple. Maybe they’ll even learn how if they take a closer examination of Apple’s strategy. Fortunately for Apple, most of the competition sees but cannot hear.



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