In 1997, Apple was on the verge of bankruptcy. Now, they stand as the most valuable publicly traded company in the world. What a difference 14 years and a $150 Million loan from Microsoft makes.
One thing is certain above all else. Apple’s commitment to hardware was the greatest hedge of all time. They didn’t become enamored with trendy software, and they kept their fundamental business based on hardware. iPod’s, Mac books, iPads, and of course iPhones. Apple clearly had competitors throughout their rise to power, but their brand managed to eclipse everyone else’s. The question is why? My theory is that they were able to enamor Generation Y. They appealed to the consumers vanity, and gave them an aesthetically pleasing device that was unequivocally different from any PC in the marketplace. Secondly, the iPhone.
Not talking about the iPhone in a post like this would be a travesty since it accounts for more than 50% of Apple’s total revenue. I consider myself a cell phone buff, so that’s why I don’t like the iPhone. Strictly speaking from a technological standpoint, it’s good but not great. It revolutionized the app world, and brought forth the generation of people who need access to thousands of apps or they’ll die! If you follow the pattern from 2000 until now, you’ll see that there was a paradigm shift in the mobile industry. Phones that didn’t have an easy pass-through access point were rendered obsolete. Companies that were too late to the draw saw their marginally run businesses dwindle away. Nokia stood as the world’s juggernaut phone maker until technology and consumer demand changed. They had ample time to prepare for this, but simply chose not to. That decision has also led them to the financial woes they’re currently seeing.
The business model itself around the iPhone created consumer demand as well. Once app makers saw an opportunity to make money off of apps, they began tailoring their apps to the consumers needs. They were able to capitalize on the 3G revolution that started captivating Europe a couple of years before it hit the United States.
Now, Apple’s leadership is 100% responsible for their success. People tend to mention Apple’s poster boy, Steve Jobs, but Apple’s real superhero is Tim Cook.
One thing is for certain. Economic swings will naturally happen in the cyclical and non-cyclical sectors, but strong sales of tangible products will always keep you afloat. When Silicon Valley Tech Bubble 2.0 bursts in the next three years, many of the artificially inflated companies will cease to exist. Apple will be standing stronger than ever. Apple is approximately worth $340 Billion, and their stock is still undervalued in my opinion. With that being said, I’m going to go on record as saying the following:
Prediction: The iPhone 5 (4G) and the iPad 3 will break previous records domestically and internationally. Bold prediction, right! Here’s my prediction. Apple will be worth more than $450 Billion by Q2 of 2012.
Signing off,
Miran Maric
No enterprise is more likely to succeed than one concealed from the enemy until it is ripe for execution.
– Niccolo Machiavelli
Horse Boat 