A Rotting Apple?

You know what makes one of the greatest stories in the history of American corporate culture so great?

The fact that it came damned close to never happening.

When Steve Jobs was forced out of Apple — fired, for all intents and purposes, from the company he founded in 1976 — the board of directors thought they were getting rid of an emotionally unstable, immature, tantrum-prone, spoiled rich kid prima donna who was more liability than asset.

And they were partially right. He was an emotionally unstable, immature rich kid… He was also, as the board of directors came to learn in the years that followed, well worth the trouble.

After Steve left, Apple’s leadership got down to the business of business. They took a good idea — the Macintosh — and began repackaging it into a dozen or so new models.

There was the Classic, the II, the IIcx, the IIci, the LC (1, 2 and 3), the Plus, the Pro, the Quadra, and so on…

The company went from innovation to mass production, figuring, “Hey, if we’ve got a winning idea, it’ll be a winning idea 10 times over if we just optimize it for that many specific market niches.”

It was innovation by committee at its best, and, predictably, it failed miserably.

The world’s most exciting tech company — a company that was unafraid to take on the likes of IBM and Microsoft in very high-profile PR wars — a company that promised to save post-modern society from Orwellian-style oppression at the hands of the soulless technocratic establishment — had become nothing more than a production line of aging, overpriced, no-longer-cutting-edge machines.

By 1996, the company was just 90 days away from bankruptcy.

The Summer of Redemption

But then, the story of near calamity turned around.

To the ecstacy of millions, Steve Jobs came back to his struggling company in July of 1997.

By 1998, the company was back in the black. Three years after that, Jobs introduced the first iPod.

And just like the Macintosh before it, that little device left the world a changed place.

It quickly became the industry standard, and coupled with iTunes, it rewrote the book on how intellectual property was licensed, stored, and accessed.

Six years after that, in what might be his second-best keynote address ever (after the Macintosh launch), Jobs introduced the iPhone and changed the world yet again.

Lacking any particular technical skills or formal business training, Steve Jobs took his dying baby and turned it into the world’s most valuable, most recognizable brand.

It was the Apple that should have always been, but for that little hiccup in 1985 that effectively put the company’s growth on hold for a decade.

Of course, as historians will undoubtedly point out, if it wasn’t for Jobs’s departure or for his return at a point when the Internet revolution was getting up to speed, the company’s dramatic recovery may not have happened.

Whatever the most direct cause was, the stars aligned for them in 1997…

Flash Forward to This Week

CEO Tim Cook came out, guns blazing, this past Tuesday.

He had all the tricks of his predecessor, albeit somewhat tweaked and adapted, ready to go for the unveiling of the next generation of devices.

He even uttered the famous, “one more thing” line — a nod to the guy who built the company.

And his “one more thing” happened to be the long-awaited Apple Watch — something many of us thought we wouldn’t see until 2015.

He did it all, adding high-profile flourishes like an a cappella duet of Strauss’s Sprach Zarathustra (commonly known as the theme music from 2001: A Space Odyssey), performed by none other than Jimmy Fallon and Justin Timberlake, to introduce the two new iPhone models.

And yet, the whole affair left me with a sense of deja vu… a sense of “we’ve already been here.”

Looking at everything objectively, today’s Apple products have started to do exactly what they did a quarter century ago — when a general lack of creativity was answered with greater variety.

Today’s Apple products tend to do with the iPhone what they did with the Macintosh all those years back.

Every iPad, every iPod Touch today, feels like just another iPhone. Some with bigger screens, some with smaller ones, but all doing basically the same thing and not putting too much effort into concealing this fact appearance-wise.

They all have Internet access. Just about all of them have cameras. They all work seamlessly with the App Store and iTunes, and yes, they all pretty much look like they have the same DNA.

Substantive differences between Apple’s most popular products begin and end with screen size and cellular capability. The lines are otherwise pretty blurred.

Topping it off, because Apple is Apple, none of the devices provide an inviting environment for freelance developers and software engineers. In fact, and I know this from personal experience, they tend to shun the closed system Apple insists on maintaining.

This wasn’t a big deal as long as Apple was making unusual, market-opening products, but is that even the case anymore?

One has to wonder…

Leading From Behind? Or Just Behind?

Its new payment system, Apple Pay, will be in direct competition with two established brands, PayPal and Google Wallet.

And its new watch is in the same boat. Revealed three days ago, it’s not second, or third, or even fifth to the market.

Sony, Samsung, LG, Motorola, Asus, and Pebble were all there before Apple Inc. In fact, Sony has three smartwatches on the market. Samsung has introduced no fewer than six since this time last year.

And unlike the Apple Watch, the latest Samsung device can function independently of a cell phone.

Aside from the Watch and Apply Pay, the biggest news seems to be increased screen sizes for the new iPhone and forthcoming iPad.

Those of you old enough probably remember the early Macintosh screens. And if you remember that, you also remember that as screen size grew, Apple solvency slowly eroded.

Getting that deja vu yet?

Apple made its name not just by leading in its niche markets, but by pioneering them.

It did it with the mass-produced graphical user interface; it did it with the MP3 player; it did it with the touchscreen smartphone, and it did it with the iPad.

When asked how much money he invests in market research, Steve Jobs answered, “Zero. The consumer doesn’t know what he wants. It’s our job to tell him.”

Today, however, this bold, brave, “succeed big or fail big” ideology has degenerated into a standard, uncool, soulless game of follow-the-pack.

So put all this together, and what do we get?

Well, we get a gigantic company with a cash reserve bigger than most national GDPs; a company with more brand loyalty than any other; a company whose logo and products are probably known to every advanced extraterrestrial civilization that’s ever passed within 13 light-years of planet Earth; a company with more power than all but the most powerful governments — and it’s running around with its head cut off.

Once again, lacking in any real creativity, it’s reverting to that old, favorite go-to of past-prime, once-great-but-no-longer-young-and-vibrant companies… It’s expanding its product line by finding more and more boxes into which it can cram its proprietary tech.

The problem is, Steve Jobs isn’t coming back for a second time.

The visionary who created the company, and who swooped back in to save it once, is gone for good.

Instead, a man who approximates the voice, gestures, and mannerisms, but none of the imagination, is at the helm — clearly working overtime to guide the company through middle-aged mediocrity.

Does this mean you should be shorting Apple?

Well, I’m not about to give that kind of advice. For a short to work, the stock needs to fall. I think Apple could well just stagnate… and stagnate… and stagnate.

Nobody wins when that happens.

However, as the adage goes: “If you’re not growing, you’re dying.”

If Apple isn’t growing, what, exactly, is it doing?

Just like everyone else, I’m eager to see… But I’m sure not putting my money on another renaissance.

To your wealth,

Brian Hicks