Earlier this week, Apple Inc. (NASDAQ: AAPL) revealed its latest iPhones, the iPhone 7 and iPhone 7 Plus. As expected, the products were somewhat underwhelming, essentially sporting the exact same design as the iPhone 6, and with no new meaningful features.
Unfortunately, the iPhone 7 reveal was less about what has been added and more about what has been removed. In what has become somewhat of a parody of itself, Apple’s latest “innovation” is essentially nothing more than an iPhone 6 without a headphone jack.
Sure, Apple touted a few tweaked features on Wednesday like water-resistance, stereo speakers, and wireless headphones, but none of these things are actually new in the world of consumer electronics. In fact, they’re already generations behind the competition. The company’s leading competitor Samsung has already instituted both wireless charging and a full waterproof design in its Galaxy lineup. Wireless headphones have also been around for years…
Meanwhile, Apple’s head of marketing Phil Schiller stood up on stage Wednesday trying to convince customers that a $10 headphone dongle they’ll likely end up misplacing, and a $160 pair of wireless earbuds, are some form of progress. Frankly, it’s all a bit insulting to anyone living outside the dying Apple cult.
“Some have asked why we would remove the analog headphone jack from the iPhone. It has been with us a very long time,” Schiller went on in an unbelievable feat of mental gymnastics. “The reason to move on… Comes down to one word. Courage.”
Of course, anyone with half a brain cell knows what a load of bologna that is, and you could even see it on Schiller’s face when he said it. Courage has absolutely nothing to do with Apple’s removal of the headphone jack — greed is the only motivator. Apple, as it’s been doing for years, is attempting to further trap users in its ecosystem. It’s really just that simple.
Blowing smoke at this fact is a bit preposterous and, as Verge puts it, removing the headphone jack is “user-hostile.” I planned to go on my own rant about all this, but then I saw Alyssa Bereznak’s over at The Ringer and decided I just couldn’t beat it:
Apple’s utter lack of self-awareness in this scenario was astounding, but unsurprising. Even the writers of Silicon Valley — the HBO series that sharply critiques the tech industry’s pompous nature — have admitted their research brings them to witness moments so outlandish, that to write them into a scene would be too unbelievable. Angling a product announcement as an act of courage gets to the very core of Silicon Valley’s toxic, self-congratulatory nature. Even Steve Jobs, Apple’s consummate and perhaps most self-congratulatory salesman, sold the MacBook Air’s elimination of the CD drive without a faux narrative about a grander purpose.
Schiller’s “courage” bit speaks to the modern day mindset of wealthy tech leaders who describe company acquisitions as “journeys,” say personal vendettas against websites are matters of “privacy,” and get so swept up in their vision to be game changers that the product required to get there becomes secondary. In an era where technology is supposed to save us from ourselves, there must always be a higher moral explanation for even the most annoying product announcement. And even if Schiller was just a guy stuck with the job nobody wanted on Wednesday, his speech is proof that publicly traded companies loathe to admit their motivations are selfish.
Of course, there’s nothing innately wrong with a public company acting in its own self-interest and consequently the interest of its investors. In fact, that’s what a public company like Apple is obligated to do… But the truth is Apple’s self-aggrandizement doesn’t actually serve itself or its investors in the long run. All it’s done is make the company increasingly complacent remaining developmentally stagnant. As Bereznak points out above, product development has become secondary to marketing.
This is a point not just being made by myself or Bereznak, though — it was an argument once made, ironically enough, by Steve Jobs himself. I absolutely love this quote in its current context… You just can’t make stuff like this up (emphasis mine):
The technology crashed and burned at Xerox. Why? I learned more about this with John Sculley later on. What happens is, John came from Pepsico. And they—at most—would change their product once every 10 years. To them, a new product was a new sized bottle. So if you were a “product person”, you couldn’t change the course of that company very much. So, who influences the success at Pepsico? The sales and marketing people. Therefore they were the ones that got promoted, and they were the ones that ran the company. Well, for Pepsico that might have been okay, but it turns out the same thing can happen at technology companies that get monopolies. Like IBM and Xerox. If you were a “product person” at IBM or Xerox: so you make a better copier or better computer. So what? When you have a monopoly market-share, the company’s not any more successful. So the people who make the company more successful are the sales and marketing people, and they end up running the companies. And the “product people” get run out of the decision-making forums. The companies forget how to make great products. The product sensibility and product genius that brought them to this monopolistic position gets rotted out by people running these companies who have no conception of a good product vs. a bad product. They have no conception of the craftsmanship that’s required to take a good idea and turn it into a good product. And they really have no feeling in their hearts about wanting to help the customers.
What Apple seems to have forgotten over the years, and what Steve Jobs highlights above, is that it didn’t get to where it is by simple virtue of its brand. Its brand only ever carried weight in the first place because it was built on innovative product development that once left competitors in the dust.
The market might be slow to respond, but it’s not stupid. When it comes to technology companies, customers will eventually realize that you’re not as smart or as important as you’re pretending to be.
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Where Apple Fails
Apple’s failure to innovate is a topic we’ve been talking about for years, and recent sales indicate that consumers are finally catching on to the company’s stagnancy (and sometimes even incompetency) of design. Not only did the firm’s total revenue recently drop for the second straight quarter after 13 years of consistent sales growth, but profits have fallen by more than 25% year over year.
Breaking it down by product, sales of the iPhone dropped to 40.4 million units last quarter, down from 48 million a year earlier. Jointly, Apple Watch sales are down 57%. And according to recent data from IDC and Gartner, Mac sales fell 8.3% in June while MacBook Pro competitors reported an increase in sales. All told, Apple now ranks fifth in PC market share, behind HP, Dell, Lenovo, and even Asus.
On top of falling product shipments, Apple is losing ground on the software side as well. Since October of last year, the company’s Safari browser has dropped from the top spot at 41% mobile market share to just 27%. Meanwhile, Google’s Chrome browser has climbed above 50%.
The only apparent positive trend for the company right now might just be Apple Music, but even the growth curve there is already tapering off as it still lags well behind Spotify’s paid user base. Put quite simply, Apple is faltering under the leadership of Tim Cook — a CEO who once rode the fading coattails of Steve Jobs and now lets obvious design flaws like this slip right through the cracks:
Arguably more threatening than any other symptom of Apple’s R&D crisis, though, is its obvious lack of involvement in virtual and augmented reality tech. Microsoft, Google, and Facebook have all made it clear they’re developing AR/VR devices, while Apple has shown little indication it wants to seriously compete in this realm.
Sure, you can speculate all day whether or not the company has a secret AR/VR lab somewhere, but considering Apple’s upcoming iPhone features, let alone its driverless car endeavor, Project Titan, can’t be kept under wraps, it’s a bit of a stretch. As of today, it seems like Apple isn’t going to have any room at the AR/VR table. For the company’s investors, that’s a very unsettling possibility. For everyone else, it’s another opportunity to profit.
Until next time,
Jason Stutman
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