The current direction of Apple is something that I have been wondering about for a while now, specifically the lack of focus on the high-end professional consumers served by the Mac Pro. The iOS platform has been incredibly lucerative and successful for Apple, however there is an obvious question about the future of the Mac hardware platform.
In the last five years, there's been a shift which has seen huge adoption of Mac laptops and desktops by a wide variety of people. It would seem this has just as much to do with the world's detachment from Microsoft as it does the adoption of Mac hardware. Now that the majority of a lot of people's "computing" is via web and mobile apps, the architecture of the interface matters a lot less. We've gone from a world where Windows was the dominant paradigm because it ran all the software, to a world where Windows is the exceptional paradigm. One goes with Windows if they have software that doesn't run as a web app. Otherwise, a Mac will do fine. The triumph of Apple engineering and the computer as a consumer device.
The concern is three-fold. The first is that iOS occupies a less defensible position in the market. As devices have shorter lifespans and apps are often replicated across platforms, the iOS is less sticky than the MacOS. Consumers seem to go from iPhones to Androids, now they're trying Blackberries again. As long as the device 1) makes phone calls, 2) receives/sends email, 3) receives/sends texts, 4) has a decent camera, and 5) has Facebook/Instagram/Twitter/Spotify/etc, I don't think people are really bothered about the device as much as might be considered. Prosumers, yes. The people who read this website, probably. But a lot of people really don't seem too bothered. And Apple didn't help with the cable shift of the last iPhone. All of a sudden, iPhones went from a gated community, to a fragmented community. When you have to carry a cable for an iPhone 5 like you do with a Galaxy, they all just become phones again.
The second concern is the proliferation of hardware. MacBook Pros with retina displays and without retina displays. iPads with retina displays and iPads without retina displays. This is a significant break from the Jobsian narrow ecosystem that made Apple so successful. There used to be one iPad. One MacBook. One product at each level. That is a luxury manufacturer logic. You do not get a choice, for part of what you are paying the premium for is curation of the device. Now with Tim, we see new product segments, and point-to-point competition. Business strategy that is technically correct but again breaks the ecosystem structure. This may seem minor, but along with the dividend payment, Apple is being run as a business rather than as a product religion. Last time this happened, it wasn't long before the company ended up replicating the dominant industry logic.
That comes to the third point, which is the very broken pro user market. Final Cut X was the first debacle. Apple took a long time to capture that attention, and actually get AVID on the run, and Adobe nearly out of the game. They were almost home-free on the pro video editing market. Almost... and then Final Cut X and utter disaster for the high-end market. Now, there's been a big shift back to AVID, and another shift to Adobe. From a business point of view, these are niche segments that don't pay for a lot of hardware in the end. From a spiritual point of view, those users are at the heart of the platform. The storytellers who have the need for the best hardware. Who's time is so valuable, they upgrade machines whenever there's a speed-bump that can save them an appreciable amount of time. Now the lack of focus on that segment from an Apple that is so cash rich can only mean that the segment is not considered important to the company. Huge mistake, and probably the biggest red flag here. Even if the pro video market was a complete loss leader for Apple, the pro video market is the defence industry of the computer industry... it's where all the black budgets and high-end stuff is created, tested, and purchased.
I think Tim is doing a fantastic job overall with Apple. However, the three points above are three very obvious non-Apple things that his Apple is doing, and should cause any investor cause for concern. Apple will always be around, and will always be producing hardware, but whether or not it can maintain its mystique and related margins has to do with the company's continued ability to capture the imaginations of a relatively small number of VERY influential content creators. If I were one of those creators today, I would be asking if Apple really cares. And that is a big big red flag.