Apple′s midlife crisis | News | DW | 01.04.2016
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Apple's midlife crisis

The world's most valuable company is celebrating its 40th birthday on April 1. But after years of success, is it stuck in a midlife crisis? Apple is in a period of upheaval, says Jens Korte in New York.

Clad in his turtleneck and armed with cool presentation skills, Apple founder Steve Jobs captivated millions of people with his company's new products. But innovation wasn't really the secret to Apple's success. It was the brand itself, the attention to detail and perfection, plus inspired marketing that made Apple the most popular company in the world.

Fading magic

But the level of interest in Apple on the world's stock exchanges has been flagging. Stephen Guilfoyle has worked on New York's trading floor for over thirty years. He said he's not an Apple fan and wouldn't buy Apple shares. Although he conceded that the company had been exceptionally good at developing products no one knew they needed until they realized they couldn't live without them, he also said Apple hasn't been able to recreate that same magic since Jobs died in 2011.

Jobs didn't invent telephones or computers, but he revolutionized the tech industry anyway - if only by making mp3s and the mobile communications market hip and accessible. And Apple has drawn massive gains from that. No company is more profitable. For the fiscal year of 2015, the tech giant raked in sales of $234 billion (206 billion euros). Around a billion Apple products are in use worldwide, according to CEO Tim Cook.

USA, Tim Cook

Apple CEO Tim Cook lacks Steve Jobs' charisma

That's all thanks to Steve Jobs, said independent tech analyst Bob Enderle. He said Jobs had the extraordinary ability to manipulate people into purchasing his wares. Such a talent in top management is extremely rare. Walt Disney supposedly had it, Enderle said. But Tim Cook does not.

Has Apple plateaued?

Jobs hasn't been around for years now, and few people talk about Apple's brilliance anymore.

Instead headlines like "Apple has become boring", "Apple's lost its spark" and even "has Apple reached its peak?" have become more common.

In contrast to previous years, nobody queued for hours outside Apple stores after the company launched new products in mid-March, which included new straps for the Apple watch. And it's also slashed the prices for the watch and the new iPhone. An iPhone has never been cheaper - although one of the key reasons for Apple's past success is that it never tried to win market share by competing on price, the way rivals like Samsung have done.

Tim Cook has to be Tim Cook

Tim Cook is not Steve Jobs. But tech analyst Enderle said he doesn't have to be. Microsoft is a cautionary tale illustrating what happens when a new chief tries to imitate the founder, the way Steve Ballmer had tried to run the company like Bill Gates. It didn't work.

Cook has broken with tradition. He has listened to what customers want. But he lacks his predecessor's knack for surprise. But he's on the right path, said Enderle. Cook isn't afraid of being accommodating towards investors. In the spring of 2012, Apple also started distributing dividends among its shareholders. That would have been unthinkable under Jobs. The investors thanked Cook, and Apple has since risen to become the highest-valued company in the world, worth $600 billion.

The changing face of Apple

Enderle's optimistic about the future. Apple's share price has been recovering. According to Enderle, Apple is turning into a company that is focusing increasingly on solutions and services, like in the health sector. In the future, hardware is going to become less relevant.

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Apple goes small for new iPhone, iPad

While Google, Facebook and other tech companies build their business model around selling user data, Apple has come out firmly on the side of privacy protection. It's even locked horns with the US Justice Department, which has tried to force Apple to help crack open an iPhone belonging to one of the San Bernardino shooters. Cook refused, stating publicly that user data protection had to be prioritized. Since then a third source has been able to crack the phone, without Apple's intervention.

Apple's transformation needs time. Its payment service Apple Pay doesn't seem to have found widespread use. But word has leaked that Apple Pay is going to be used on online shopping websites this year. The Apple of the future might have little in common with the one at present. Other blue-chip companies like IBM have been through similar metamorphoses. But change is going to be an important condition for Apple, if it wants to be able to celebrate another forty year past its middle age.

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