Three years ago, I wrote the following summary of 2012, as I saw it. It is surprising.
The last year has seen a succession of celebrities and companies fall spectacularly from grace. Jimmy Saville’s rise from the pit to prime-time TV presenter was destroyed by the torrent of allegations that he was a serial sex-offender. Lance Armstrong’s peerless record of seven successive victories in the Tour de France was shattered by USADA’s overwhelming evidence that he had engaged in systematic doping and cheating.
Formerly great companies like HTC, RIM and Nokia have continued to fall free, although far slower than Felix Baumgartner’s record-breaking jump. Even the massive HP had to admit retreat for the next few years whilst it retools, and launched its Spectre One iMac clone to demonstrate its innovational bankruptcy. Those who thought that buying shares in Facebook would bring riches have seen their investments fall. Even Google’s profits fell and its shares slipped back. Whole countries – Greece and Spain, among others – have been fighting economic collapse, whilst those still in growth like China are trying to re-focus.
Against this desktop of doom, Apple’s window has continued to shine bright. There have been some flickers of weakness, such as its Maps app in iOS 6, but given the succession of product launches this year – Mountain Lion, iOS 6, no less than three different iPads, MacBook Pro Retina, iPhone 5, and more – that remains a singularly low failure rate.
The stage is now set for the next big battles. Microsoft has finally come up with (and shipped) something distinct from the iPad with its Surface tablets, as well as Windows 8 which actually looks different from OS X. Bizarrely it seems to have changed its desktop interface towards that of its phones and tablets, a convergence made unjustly of Apple by critics of Mountain Lion. Apple’s only serious rival in the provision of content, Amazon, has launched a new range of Kindles, from the basic reader Paperwhite to its iPad pretender the Kindle Fire HD.
The economic optimist should see these as being well timed. It does not take much skill or innovation to sell new products when there is a retail boom, but the first sign of recession spells trouble. Vendors with strong and exciting portfolios can exploit recovery, riding the building wave like an expert surfer. The economic pessimist sees recovery being too long-delayed and too slow, and Apple’s profit margins coming under pressure from its competition. How Apple copes depends on how flexible and skilled it is over the next year, relative to rivals.
One oft-forgotten factor is that Apple has well over $100 billion in investments, managed by subsidiary Braeburn Capital. To put that in context, this capital sum is roughly 18 months of sales revenue for Microsoft, a year of sales revenue for HP, or slightly less than the GDP of entire nations like New Zealand or Kuwait. In the event that the iPhone falls from grace and its sales revenues plummet, there should be ample cash to invest in the next generation of consumer electronics.
The key question is whether Apple can maintain its lead in innovation, which has made its current product range so successful. We tend to associate innovation with youthful companies, not those in affluent middle age. However the sheer cost of bringing complex modern products to market is such that, if Apple can continue to attract those with bright ideas, it has the wherewithal to fund their realisation. It has thankfully resisted buying rapidly-growing vivacious companies and stultifying them.
Last year proved that Apple without Jobs is not only capable of holding its place, but can thrust ahead. Next year will be interesting.
The above was first published in MacUser volume 28 issue 25, at Christmas 2012.
Since then, a succession of former celebrities have had their crimes against children (and others) aired in court, and paid the penalty. Lance Armstrong has started to pay his penalties, but still has not come clean about his doping, and other athletes have joined him in lifelong disgrace. RIM might, after all, be salvaging something of its former glory, although it continues to claw its way through a very long and dark tunnel.
Tablet wars seem to have cooled, as their sales have slowed, prompting the usual forecasts of doom and gloom. But Microsoft remains confident enough to continue to develop its Surface range, and Apple has of course aimed its iPad Pro at some, at least, of the creative market.
Has Apple kept up its pace of innovation? Glancing at my Apple Watch and sat in front of my iMac 27″ 5K, the answer is clearly not no. But nothing it has launched in 2015 has the sparkle and promise of past products like the Mac, iPod, iPhone, or even the iPad. So next year will have to be interesting.