The past weeks have seen an eruption of speculation about iPhone sales. The furor was sparked by reports from the Wall Street Journal and Nikkei citing unnamed sources who said that Apple had cut orders for iPhone 5 screens, possibly by as much as "half." As a result, Apple detractors have begun their end-zone dancing prematurely (15-yard penalty), while Apple supporters have said, "Seriously with this?"
I'm obviously in the latter camp, but ultimately I think these groups are--to borrow a phrase from Steve Jobs, who borrowed it from Wayne Gretzky, who may have stolen it from a Zamboni driver--arguing over where the puck has been, not where it's going.
While I'm somewhat interested in how many iPhones Apple sold in its first fiscal quarter and how many it expects to sell in its second, I'm more concerned about something else: what Apple's next growth engine will be.
Sure, current sales figures matter. But if you're an investor, you want to know what the company's going to do, not what it has already done. Which makes deciding whether to invest in Apple something of an act of faith. Do you think that Apple's current management doesn't have what it takes to keep innovating?
Well, do you?
The stasis quo
Apple's detractors act as though the company's product lineup will never change. That what you see being produced by Apple is the sum total of Apple's innovation. That nothing the company can come up with will remake another market. That innovation at Apple died with Steve Jobs. It might sound like I'm setting up a straw man to toss on the bonfire, but you don't have to go far to see that these attitudes aren't just real--they're pervasive.
I've said this repeatedly, in print, online, in podcasts, and while haranguing youngsters in front of the Gas-N-Sip: There seems to be a persistent myth that Apple churned out a groundbreaking products every quarter under Jobs. In reality, it was three years between the iMac and the iPod, another six before the iPhone was released, and then three more prior to the iPad. The fact that Tim Cook's Apple has not unveiled a new product category since the original iPad is not a colossal fail of epic proportions. In fact, you could argue that the fact that Apple is not rushing something out the door is a sign that it's operating its business as usual. The company is releasing products on its own schedule, not at the whim of pundits or analysts. If you make that argument, someone will likely roll their eyes at you and call you a laughably biased Apple fanboy. But don't worry about them. They're the ones who can't imagine there's anything over the horizon.
Six years ago I remember hearing the same thing we hear today: All of the value has been sucked out of the markets that Apple currently competes in; competitors are going to take over; and Apple will once again be relegated to its destiny as an a niche player. It had a nice run, but that was a fluke, and order will soon be restored to the universe.
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