Apple has just posted one more quarter of record revenues and its investors are unhappy. Some investors may still live in the hope, while others are starting to punish Apple for not being able to do the impossible.
The longer the Apple keeps breaking its iPhone records, the more likely the product will peak in the following quarter. Now, it seems more likely than ever that the company has reached that point. Unfortunately, zillions of analysts predicting quarterly sales figures and pondering if the inevitable peaking has finally happened diverts attention from what really matters to Apple.
In the quarterly earnings announcement, we heard ominously little details about the commercial success of AppleWatch; the rumoured car initiative is said to be in some sort of trouble, and Apple TV hasn’t still broken out of its niche. Things like Apple Music and Apple Pay are smart extensions to the product portfolio but not the kind of exciting products from which the company lives. To me, the real reason to worry is:
Can Apple resist the stupidity of the markets?
The company could easily start bit by bit to focus on efficiency and shave off costs here and there to keep investors happy for quarters to come. Given the remarkably steady pattern of results for the last five years or so, let’s hope this is not already happening. Caving in to pressure from investors to prioritise short-term growth and profits would slowly suffocate Apple’s capacity to innovate. After all, short-term financial performance matters mostly to company investors and to some extent its partners — not to its customers or general public.
There are unavoidable ups and downs in tech business that requires long-term vision and risky projects for a company to remain healthy. When maintaining a nice, predictable pattern of growth becomes a top priority, there is progressively less room for bold projects and the kind of people who are ready to undertake them in the company. Then, once the company finally realises that it cannot live forever from old products, there are only those people left who are good at optimizing the business for investors.
This is a commentary on Apple quarterly results I originally wrote on the request of our PR folks at the Warwick Business School.