Apple’s Crisis of Confidence: Consumer Perception and Stock Market Response

tim cook apple logoBefore I dive into this, I need to make it clear that I don’t hate Apple. I used to be an Apple product specialist working a JIT contract for DOE facilities in New Mexico. This was during the dual socket days of the PowerMac G5. It was a glorious machine, and I used to adore Apple. As Apple walked away from markets and product lines that I cared about, that adoration became a loving competition. The recent glory days of the company provided me a terrific nemesis as I moved over to Windows 7 computers and Android Phones.

Following Tuesday’s unveiling of the iPhone 5C & 5S, I came to an unsettling realization: I’m worried about Apple.

See, my world as a tech enthusiast and writer just doesn’t make sense without a powerful Apple, and the company which was on display during this last keynote was anything but powerful. 

The Glory Days…

Steve-JobsI really do have to give Jobs more credit posthumously. We joke about things like his “reality distortion field”. We could always point out after a Jobs keynote that nothing really revolutionary was coming to the market with a new Apple product release. Let’s be honest Apple’s “innovations” rarely have anything to do with developing new technologies. After each Jobs keynote, as tech pundits would celebrate, the rest of us would wonder what all the fuss was about. During those events, we casually dismissed the response as iFanBois mindlessly following the Apple pack. Now I realize I was wrong.

During those years, Steve Jobs lead Apple with an unceasing laser-focused force of confidence. He knew these products were going to be late to market with bleeding edge tech, and that’s not what was important to him. He would still take the stage, and exclaim such-n-such feature would be coming to the new iPhone. It wouldn’t matter that such-n-such had already been out on a dozen other handsets. The Apple version would be cleaner, more refined, more organic, ready to deliver to consumers. These wouldn’t be raw solutions in search of problems. They would be ready to integrate, not into people’s phones, but into their lives.

As much as I’d want to hate Apple, I knew he wasn’t wrong. Worst of all HE knew he wasn’t wrong. Every time he’d take the stage, he was confident in his correctness. He was confident enough to float an entire company.

Crumbling Confidence…

And that’s the magic we’ve lost. Apple is just as capable of delivering good products. Yet every time Tim Cook takes the stage at a keynote, and every time Jony Ive shows up in a video, we don’t see that confidence. We don’t see that utter belief in their products, in their convictions. We see a good product up on stage, and we hear a few buzzwords like “most forward thinking-est” phone. We don’t hear that it’s the right phone. We don’t hear it’s the correct phone.

itunes radio announced somegadgetguy streaming internet musicI touched on this briefly during my write up, but iTunes Radio is a perfect example of this ebbing confidence. We all know that Apple is late to the internet radio game. Microsoft and Google are already competing for ears against established services like Spotify and Pandora. Apple’s announcement of this during the keynote was less than a minute long and was at the tail end of their iOS7 demo. This is an important service for the company that invented how we buy music online, yet it was relegated to a footnote, almost as if they were conceding defeat before they even had to compete.

During a Steve Jobs keynote being last to the party would’ve been heralded as the right move. We would have heard how competing services were half baked, or how they were making customers pay for a BETA experience. We would have been told that being last meant learning from other’s mistakes, and that Apple had fixed all the bugs and delivered a simpler, streamlined experience focusing on just those features we consumers actually cared about. And Jobs would’ve been right.

It’s an emotional response, but maybe that’s not wrong. Android discussion is often a weekly king-of-the-hill scramble to see which phone is going to have the best specs on paper for a couple days. Apple can’t win a fight like that. They don’t have any competition, no other companies making iPhones to force them to evolve at such a radical pace. Whenever someone takes the stage at an Apple event and starts stressing 64-bit cpus and 1.5 micron pixel cameras, that’s all left brain stuff. Apple has done too good of a job educating consumers about mobility tech. Now when you throw those kinds of numbers around, people will pause and consider and think about the other specs a competitor might be lauding. If they’re Apple faithful they still probably wont buy an Android or a Windows Phone, but even just that moment’s pause is a bad place for Apple to be.

Competitors and Investors Smell Blood in the Water…

apple stock down somegadgetguyI actually kind of hate the market’s response to the new iPhones. Apple stock is down 30 points since the unveiling, since announcing that China would be a launch country. Apple is making some good plays here, but it doesn’t matter how the company actually performs, how profitable they actually are. It only matters how the market perceives them to be performing, and that perception is eroding. Apple just doesn’t feel like the winner it used to be. Samsung knows it. Nokia knows it. HTC knows it. Investors know it.

Apple was the Big Bad, but coming down from that top notch can be rough. Look at Microsoft and IBM before them. Google is on the rise. They’re the next Big Bad, but I’ll be curious if any company can hold on to that level of success for very long any more. For my part I hope Apple gets its groove back, and soon.

My world is just a little less fun without healthy iDevices to rage at…

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