Tuesday 28 August 2012

Apple love-in a bit tired?

Quite surprised to see the total Apple love-in going on at the moment, driving its shares to new high sand getting it good coverage on all the business pages. Apple is an odd company, which is the secret of its success and its own challenge too.

I like my ipad for example, its a neat bit of kit that is perfect for casual web surfing and games for the kids. it is useless for much else, but so what? As a brilliantly simple machine to work, it is genius. the iphone is the same, revolutionary when it came out, moving phones to a new level and rightly taking huge market share.

But today the competition is closing, just as it always does. Apple's insistence on its own software universe, high prices and aggressive approach to content pricing create room for other vendors. Apple's mac's were always better than PC's but that did not mean Apple won that war in the 1980's and 1990's.

Now today Samsumg, Google and others with developing technology and more open access to software and programming are taking serious market share. Apple's response is to try and sue them for patent abuse. in the UK and Korea this did not work, in hometown California this has worked so far.

The response of sentiment and share prices shows what a great job Apple has done in managing its media profile. Perhaps its new products will take on new areas of the media like TV and make yet another huge step forward for the business. Certainly it has billions of profits to spend on whatever the company needs.

But suing the competition for being there, especially on old patents, is an aggressive strategy and a very defensive one. Perhaps in a few days the media and markets will see what taking a defensive approach like this is signalling.

Anything that makes lawyers happy generally has a bad ending for everyone else...


hovis said...

I have never been an Apple fanboy, overpriced but decent enough stuff. If you really want a non Windows based OS go to one of the O/S Linux based ones ( Unbunti Mint etc).

So I've never understood the irrantional love of Apple and their ridiculously high share price - but hey look at how the market is in general.

Agree the litigation strategy is defensive and indicates that they no longer wish to (or unable to) innovate. Market share can only go one way from here.

PS: Jobs was a picky sociopath, he just looks margibnally better when compared to Bill Gates (his revolting 'philanthropism' included.

Nibilik said...

Clever Apple.
Managed to become the world's largest corporation whilst convincing the anti-capitalists they were fighting for the little guy.

Toby said...

Also - their response to competition seems to be to reduce (default) functionality in their offerings. That, IMO, is never a good thing:


Devil's Kitchen said...


"Apple's insistence on its own software universe, high prices and aggressive approach to content pricing create room for other vendors."

Yep. Competition is good.

Except that other vendors have not been able to compete on price—especially in the tablet space.

"Apple's mac's were always better than PC's but that did not mean Apple won that war in the 1980's and 1990's."

Because Apple went for ludicrously high margins and licensing of the OS. To cheaper hardware makers. Essentially, Apple was being run by idiots—yes, Sculley and Amelio, I'm looking at you (amongst others).

But the reason way Apple's share price is so high is because it's competitors have singularly failed in one important respect—profit.

Apple sells something like 20% or all mobile phones worldwide—and yet takes about 64% of the profit. Android—which is winning, right?—is a loss-maker for Google, despite having a greater market share.

That is why Apple's shares are high—because they make money, not loss leaders.


Devil's Kitchen said...

Incidentally, here's a link for those profit figures...


Blue Eyes said...

It may be a very poor PR strategy to sue over weak patents, but the logical conclusion surely must be that Apple should simply allow its competitors to copy its technology.

We are often told in the UK that we lack world leaders because of a lack of IP awareness.

Apple can charge more for the products because they sell at the quality end of the market. You can buy a laptop for £200 but you can't buy one with flash storage, 7 hour battery, incredible screen and skinny box for £200.

James Higham said...

Apple's insistence on its own software universe, high prices and aggressive approach to content pricing create room for other vendors.

One would think it must inevitably lose them substantial market share and then what? Without a Jobs, what happens?

CityUnslicker said...

DK - they are making huge profits now, quite right. There competitors are making losses because their products are inferior. However, Apple has been here before in the 1980's.

BE - They bought chunks of patents from motorola to do just this, its a patent litigation strategy. of course they should protect their patents, but its not like Apple invented the mobile phone or the touch screen - their real ability is in software and marketing.

Blue Eyes said...

CU - but Apple is not trying to stop anyone else make a mobile phone with a touchscreen.

Take "slide to unlock". It may be technically trivial but nobody was doing it before Apple brought it in and people liked it. Should Android be allowed to simply incorporate it without asking?

A lot of people sneer at the protection of the black rectangle design. But who was making handheld tablet computers before the iPad? Nobody, that's who. It was totally possible to make a tablet computer before the iPad, but nobody really did. Apple invented an entire market, should Apple not be entitled to some protection for their development?

ivan said...

@ Blue Eyes
It appears you have been taken in by the apple hype. There were touch screen phones and tablets before apple turned their marketing machine loose to sell what they had copied from others.

As for the patents, there was prior art or obviousness for everything that apple managed to slide past the patent office examiners.

A trip over to groklaw.net is worth while if only to get an unbiased look at the court case - I'm not saying the comments are unbiased.

Blue Eyes said...

Yes you are right,, I have been "taken in by the apple hype". Or alternatively I have a vague idea of what I'm talking about.

Anonymous said...

Apple started an agressive campaign against Samsung while Jobs was in charge, so I don't think it means game over now the innovator has gone (although that might prove to be the case).

I have some sympathy for Apple that Samsung copied the overall feel of the IPhone and they are now trying to pin Samsung to some minor patent infringements. Unfortunately Apple are discovering that "style" is something that can be copied quite freely - just as Gucci et al have discovered before. Gucci survive by being "the real deal" - but do people care so much for electronics?

Having said this I'm not so sure the competition is that close. Just got my first windows Phone (Nokia Lumia which also bears a remarkable resemblance to an iPhone albeit at half the price) and it is a piece of first rate shit. Shot full with bugs and inconveniences that is a big step backwards from Nokias Symbian based phones. Suitable only for teenage kids I would say.

Anonymous said...

Does anyone know why Apple aren't sueing Microsoft over the slide to unlock patent issue? Windows Phone uses the same technique. Perhaps Apple felt that US Corp vs US Corp wouldn't have the sympathy of the court on Apple's side?

Samsung were a bit cheeky to copy the Apple approach - and you could say pretty defensive too! They could simply have put two soft buttons on the touch-screen with "press to unclock" to achieve the same thing. Samsung could have got all sexy with a tag cloud for the soft buttons on the main menu rather than boring old immobile rectangles. By copying Apple they have failed to leapfrog them.

Anonymous said...

Apple aren't going to sue Microsoft because Microsoft had a slide to open system on a tablet PC in the 1990's a total failure by the way as the touch screen was so insensitive it was a joke and the screen was something like 480 x 200 so couldn't show much. Battery life measured in minutes and not hours didn't help either. That device though was the start of windows CE based PDA's which also predate anything Apple has done recently.
Apple is / has been very good at spotting great ideas poorly implemented, and making them work well. This has gone on since they pinched Xerox's GUI idea's in the 1980's and produced the Macintosh computer, the rest is history. Many of Apple's patents are possibly suspect as they are often based on borrowed idea's made better and often borrowed from a different part of the world as well.