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Perspectives From a Vantage Point

Opinion

Let’s Talk Apple

Much anticipated Apple’s “Let’s talk iPhone” event popped faster than one could poke a cheap balloon with a pin. Expectations were high. Incredible rumors were floating around that had the Apple fanboys in a tizzy – like an all new magical edge-to-edge glass iPhone 5 with wider screen and NFC, a cheaper iPhone 4S for conquering the lower end smartphone market,  a new home button with multi-touch, a new iPod multi-touch,  iOS5, and weirdest of them all – a Facebook App for iPad(I’ll probably blog on this later).

This event was important for a whole another reason – Tim Cook, the new CEO, was taking stage for the first time in place of the legendary Steve Jobs.

I was following the event somewhat live on Engadget.com. The event dragged on as Apple gloated about its recent past, its “magical” new stores in Hong Kong and Shanghai, and a rerun of the WWDC show on iOS5/iCloud. At one point after the new greeting card service announcement, Engadget blogger posted this “That got applause. People seem desperate to clap for something. That was it.” Sad part is, it was an event orchestrated just like any other Apple event, yet it was uninspiring unlike the Apple events that we are accustomed to.

Towards the end of the event came the announcement that there is going to be a new iPhone 4S. It is essentially the same package as iPhone 4 with a faster processor and a better camera – nothing earth shattering in terms of specs – one would normally expect any company to upgrade their hardware a couple of times in 15-16 months. Besides, you could find Android phones with these or better specs and features. My hope for a “one more thing” moment was shattered to more pieces than would a retina display when it drops to a concrete floor. The iPhone 4S, instead of being an all-conquering lower end smartphone is the new premium iPhone. If there was a “one more thing” It was a dud – Siri. It is a feature perfected by Google on its Android devices. Siri is nothing but a catch up act, and if anything a weird way to interact with an inanimate object – voice.

Apple with this new iPhone is not setting the trend, just doing catch up with its competitors. Coming 3-4 months later than usual, this is a big disappointment.  So why did Apple do this in October rather than the usual June schedule? There are two possible reasons (speculations on my part) – First, Apple desperately wanted to do something “magical” again, and they probably tried and could not make it happen. Competition is tightening and it is getting harder to differentiate in the smartphone market. Second, they wanted to launch latest iPhone when iOS5 and iCloud were ready. This second reason is less likely. Given Apple’s penchant for fanfare, they would have prefered the iPhone first in June and iOS5 & iCloud in October. They would have had two opportunities for magical events.

So the question now is – why would anyone  pay premium for an iPhone when he/she can have much of these same features for a lot less money on an Android or a WP7 device? I won’t but I am sure millions will. Apple has the momentum and the brand reputation to continue selling these devices at a premium, at least in the near future. But alarm bells must go off for anyone looking at Apple as a trend setting company and a sure fire investment bet.

The future does not look as rosy as it’s past for Apple even in the tablet arena. It’s only a matter of time before Android tablets catch up to the feature set and sleek industrial design of iPad. Then there is the Windows 8 coming and if early reviews are any indications, it is looking real good. Apple has a tough business model – with Apple pulling much of the weight of innovating on its own platforms vis-à-vis Windows/Android with more open environment with many partners innovating on both hardware and software applications. Apple was able to do the near impossible through excellent execution around a tough business model. All good things must come to an end. Apple is not that nimble medium sized company any more. It is the second largest corporation by valuation.

At the risk of looking like a fool in the not so distant future, I would make a prediction–Apple’s best days are behind them, not ahead of them. It has lost an irreplaceable CEO, done the impossible for more than 10 years, and its competition adapting increasingly quickly to a world defined by Apple. That’s not to say that Apple will shrink soon to a fraction of its current size. One misstep doesn’t make a trend. If anything Apple will continue to be at the leading edge of technology. Apple will sell a gazillion iPhone 4S, and probably millions more of future iterations of that once disruptive technology. It will continue to sell gazillion more of iPods, iPads, Macs and other devices. But will they still manage to charge a premium for their product? I would venture to say, no! Disagree? Well, we shall see! If there is one company that has potential to always suprise on the upside, it is Apple.