For more than two decades, many experts have been describing Apple as doomed to failure because it relied heavily on its most famous product, whether the former Mac or the iPhone later, and that the world will pass one day and its spoiled child will no longer be desired, and this will cause its collapse. And its extinction, like other technology companies such as Yahoo and Nokia, or even losing the lead such as IBM, but the years pass and this does not happen, which makes us wonder; Has Apple become Apple against breakage?
Apple may collapse
This terrible prophecy seemed to come true at the end of the last decade when Apple revised the financial guidance due to the decline in iPhone sales in China and the company witnessed the first decline in revenue in 13 years, specifically in April 2016, then continued decline in iPhone sales in the second quarter of year 2019.
Also was the successive crises of 2020 (the year of Corona) with the closure of retail stores, the closure of company headquarters and the disruption of many supply chains. Many expected that this was the real test for Steve Jobs' successor, "Tim Cook", but he not only survived the company, but was able to break records again, and Mac sales became stronger than ever and recorded records in the past four quarters.
After a stagnation of nearly a decade, iPad sales are higher than they have ever been, apart from their peak in 2012. The iPhone 12 family continues to be a smash hit near the end of its production cycle and continues to Services and wearable devices are growing strongly.
The genius of Tim Cook
Tim Cook has turned Apple into a company against breakage already and that it is able to improve under the most severe adversity, but how did he manage to do so, to answer the question we will delve a little into the philosophy and specifically with the book black Swan Lebanese-American writer Nassim Nicholas notes that bad things happen unexpectedly and suggests that society needs to build systems that can survive or grow stronger after unexpected setbacks.
The systems breeze is divided into three categories:
- Fragile: prone to fracture under stress
- Strong: flexible in dealing with stress
- Anti-fracture: improves under stress
Let's try to determine the category to which Apple belongs, and this brings us back to the era of Steve Jobs, and some time before his death, Tim Cook chose to be his successor in the leadership of Apple, and although he is not a genius when it comes to technology, design and innovation, but he was amazing when it comes to logistics and supply chains.
To take a simple example, have you tried to buy a PlayStation 5 or an Xbox Series X, it's still hard to get one because Sony or Microsoft can't produce enough chips and components they need to make a PlayStation or Xbox, the same goes for the auto industry. Automakers had to choose between making cars with fewer features or not making them at all, but with Apple it was completely different. You can walk into the company's store right now and buy the latest iPhone or Mac with the M1 chip. Of course, this does not mean that Apple was not affected by the crisis, but it was able to make the impact limited.
Perhaps this is due to the wisdom and genius of Tim Cook, as Apple spends billions up front to secure the parts it needs, which is exactly what other companies have not done or even planned. Apple said it plans to spend more than $38 billion in manufacturing purchase commitments this quarter, up 26% from last quarter. That's because Apple is booking the chips it needs, analyst Ben Bajarin said.
Another bold and wise move was Apple's decision to abandon Intel in favor of its ARM-based processors. With the switch to the M1, Apple is no longer at Intel's mercy and doesn't have to compete with other PC manufacturers over CPUs because Apple can take their designs directly to companies like TSMC and manufacture the volumes they want. Intel processors in almost all respects, which led to a record increase in sales of Mac computers.
In addition, Apple dominates its supply chain, so it can draw its own destiny, but the secret weapon that Apple kept for such crises and which they laughed at is its cash (about 200 billion dollars) and that's when it needs 38 billion dollars to secure its product lines Have the money ready for immediate payment.
Apple has a diverse portfolio of powerful products backed by physical and online distribution options that keep revenue balanced even during the toughest times. The retailer Dollar General was devastated by the closure of stores when the Corona outbreak, but for Apple, the crisis was just a nuisance that it was able to mitigate through its online stores, also a service like Netflix, everyone knows it lives or dies through its subscriber numbers, but for Apple TV subscriptions + Even if it shrinks, Apple does not worry about the situation because there are other services that compensate for it, such as music service, credit card, guarantees, and even fitness service, even the iPhone, which is the mainstay of Apple's growth, is no longer its spoiled child whose low sales may destroy the company, because there Other products, including services and wearable devices, bring Apple billions of dollars annually.
Point of view
Apple may have strength and is against breakage and grow with pressures and crises, but from my point of view there are some things that can threaten it strongly, such as the laws of legislators that they want to impose on the App Store, and not forgetting the most important point, which is the successor to Tim Cook, who is currently 60 years old and may step down during 5 to ten years and this makes us do not know the fate of Apple during the coming period.