Five Stages of Apple Critics

Over the years I’ve noticed several themes emerge when Apple critics or competing CEO’s speak of Apple and their upcoming or existing products.

I’ve outlined the five stages below.

First stage - Apple will never enter that market.

Once a rumour surfaces that Apple is about to release something cool, CEO’s and tech pundits usually chime in about how there’s no way Apple will enter that market. However, betting against Apple is becoming an unwise thing to do. Harry McCracken at Technologizer has a list of many analysts predicting that Apple won’t do something. As the post points out, that’s a risky bet. Even listening to Steve Jobs isn’t always a good indicator of what’s to come. Jobs once said that people don’t want to watch video on a small device. Then the video iPod came out.

Stage Two – Apple will fail.

The next stage usually has analysts changing their predictions to fit with the new rumor that product “A” (let’s call it iProduct) is in the pipeline. Now is when they begin saying that Apple will fail in this new product category instead of saying they won’t release at all. The reasons are by now very familiar. It will be too expensive. It will lack features. Releasing iProduct would require Apple to give up too much control. Too much competition, too late or too soon. They usually come up with all sorts of pricing predictions that are highly inflated.

Stage three - Product will fail to gain significant market share.

Now that Apple has released iProduct, and we know the price, the analysts begin saying Apple will fail to gain any significant market share. Because the features are now known, they begin to use that against Apple. It doesn’t do Flash, it doesn’t have a keyboard, it doesn’t have an HDMI port.

Stage four - Once competitors release their version of iProduct, Apple will lose market share.

Now that Apple’s new iProduct is a genuine hit, analysts now turn to Apple competitors. Though they’ve been wrong every step of the way, they now say that Apple’s days at the top are numbered. Once competitor “A” releases their version of the iProduct, Apple’s share will plummet, and its dominance will be over. Backing up their argument is that all the features iProduct lacks will be included in the competitors product and consumers will flock to the anti-Apple device. “It has flash”, it has a keyboard, it’s cheaper,  it’s open!” They say this with a straight face, as if anyone other then geeks and neck beards knows or cares what open source software is. Steve Gillmor is fond of saying that Apple’s lack of support for Flash is a feature. He’s right.

Stage five - Silence.

This occurs four times a year immediately following Apple’s earnings call. iProduct numbers are released showing 8-million units sold, $2.9-billion in revenue. The analysts, wrong about Apple yet again, have gone dark. They completely ignore the amount of money Apple makes. Usually they focus on market share only. For example, Apple has 10% market share of all PC’s, forgetting that they make 35% of the operating profits. Or that Android has more market share (true) while ignoring that Apple makes 57% of the mobile phone profit. In fact half of Apple’s revenue comes from the iPhone.

They also ignore the fact that soon, Apple will be able to buy the entire phone market (excluding Samsung) with cash alone. Daring Fireball’s John Gruber recently linked to a 15 year old blogger who points out that Apple makes more money from the sale of one Mac than HP makes from the sale of seven PC’s. If a 15 year old can see this, how come Microsoft’s Steve Ballmer or Jim Balsillie and Mike Lazaridis of RIM can’t. Or do they see it and don’t want to acknowledge it?

Another thing about the money Apple makes. Among those who recognize that Apple makes a lot of money, which is (almost) everybody by now, there is a myth that people who buy Apple products are somehow being hoodwinked or have fallen under the spell of Steve Jobs. They’ve “smoked the Apple crack”, or are simply, “Apple fanboys” who are foolishly overpaying for products when many other cheaper and better alternatives are available. As if BMW or Porsche owners are overpaying for vehicles that are exactly the same as a KIA, that they’re BMW fanboys who don’t know any better.

It is striking to me how many companies that have been disrupted by Apple and Google, still fail to notice. Maybe they think that if they say everything is fine, it will make it so. Meanwhile, RIM burns and Microsoft’s money still comes from 30 year old products, Windows and Office.

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