Microsoft, Apple and Nokia Now All Have the Same Problem
In reality, while cautious, I have never been near-term bearish on Apple. Consider what I wrote last week on TheStreet:
I need to point out that when Steve Jobs returned to the company, Apple did not become a success overnight. It took several years and a whole lot of second-guessing from bears and even the company's few bulls.
For most intents and purposes, the rough road ended when Jobs made Apple's product lineup leaner and meaner and introduced the first iPod. Just like the path to success, the road to failure or, at the very least, mediocrity, will not present as a swift and straight path.
While I argue that the loss of Steve Jobs will hurt Apple down the line, I have never questioned its near-term dominance. In fact, I have a deep admiration for the company, largely because of Jobs' impact.
I expect weakness here and there -- that's normal. Even though it did not come this quarter, it will come at some point just as it has in the past. That said, any type of swift downfall is a long ways off. Relatively seismic, high-level cultural shifts do not occur overnight.
Several reasons exist for Apple's dominance. The top two:
Sadly, the tech space lacks innovators. Of course, innovation was always the hallmark of software and hardware companies and such, but, long ago, they passed the torch to new social media companies ranging from Pandora
Each smartphone and tablet that followed iPhone and iPad represented little more than a knock-off of the original. Jobs and Apple took things like Walkmans and mobile phones and made them better; everybody else merely reacted and produced cheap imitations. The only company that deserves a pass for putting out an inferior product is Amazon.com
Jeff Bezos never wanted, nor does he want, a battle with Apple. He's too smart for that. He released Kindle Fire as a means to serve an end. In many ways, it's similar to the approach Apple takes. Bezos is creating an ecosystem at Amazon, just as Jobs did at Apple with seamless links between gadgets, content and platforms.
At Apple, the entire experience prompts you to buy the company's hardware. At Amazon, the content, and now the gadgets, drive you to buy more stuff. It's no surprise that America's two best CEOs were ramping up these extraordinary ecosystems simultaneously but independently.
If Jeff Bezos left Amazon tomorrow, I would likely make the same long-term bearish prognostication on that company as I do Apple. Amazon.com would not crumble overnight, but it would certainly not be the same company; without Bezos, I am convinced it would fall from greatness.
Thinking About the Box
When I received my Nokia
Where Jobs obsessed over what the customer experiences when he or she opens a box, Nokia and Microsoft
It reminded me of the time I got hit by a car while cycling and of a story I recently heard about a teenager getting run over and killed by a distracted driver. Jobs never would have let the user have that kind of first-impression experience.
I turned on my Lumia, activated it and got it up and running. Throughout the process, I could not really figure out if I bought a Nokia, Microsoft or AT&T product. The phone says "Nokia" on it. There's a bunch of Microsoft and AT&T stuff I can choose to use.
When I use the Apple-like USB to sync it to my computer, I can download Microsoft's version of iTunes, Zune. While it's all in the same vein as what Apple does with apps and iTunes, it felt -- and still feels -- discombobulated. Maybe I will think differently once I get comfortable with the new product mix.
Steve Jobs would have fired an entire division if they produced that sort of confusion. But, because he controlled practically every single aspect of what happens with an Apple product and all that it entails -- from birth to death -- he never would have needed to. The inmates (i.e., his employees) were never really allowed to run the asylum. As Jobs told his marketing department regarding advertising: "You worry about the back covers, I'll worry about the front covers." If it mattered, Jobs -- nobody else -- was on top of it.
Steve Jobs does not exist at Microsoft and Nokia. And he no longer exists at Apple. Nobody like him exists at either company. In fact, in corporate America, I can only think of a handful of names that might even possibly compare - Bezos heads the list followed, in the distance mind you, by guys named Westergren and Zuckerberg.
As long as Jeff Bezos is around to envision and control the future at Amazon, I am pretty comfortable with the company's long-term dominance. Same goes for Tim Westergren at Pandora and Mark Zuckerberg at Facebook. I just do not feel the same way about the executive offices at Microsoft, Nokia and, going forward, at Apple. I wonder if, slowly but surely, seemingly minute details Jobs have would spent weeks, months and even years on will be overlooked, eroding the experience of buying and using an Apple product one little unnoticed mistake at a time.
While I am long NOK and bullish MSFT, it's not because I think they'll beat Apple anytime soon. It's simply because I see them combining forces, finally providing a formidable No. 3 to Android and Apple. As time passes, a legitimate No. 3 will take market share away from Android and Apple.
If Apple misses more than a beat throughout this process, that's when it starts to take the turn from great to just very good.