Forbes Article –
As someone who joined the chorus of people who thought that Apple (AAPL) would never be the same after Steve Jobs left, it brings me little joy to point out that two worms are already eating away at its core: an Apple innovation drought and the rise of price-sensitive buyers.
So don’t be surprised to see Apple’s stock begin a steady decline — interrupted by abrupt plunges when it misses earnings expectations or guides lower.
The deepest problem facing Apple is that it has yet to demonstrate that it can introduce a new category killing product — such as the iPod, iPhone, and iPad – since Jobs departed. Sure, Apple defenders believe that Jony Ive, its senior vice president of industrial design, will be able to continue that trend. But he has yet to prove that he can.
In the past, Apple targeted big markets always figuring out how to get in at the right time and do so with a product that took the lead and usually kept it. To be fair, tackling new categories is not something that Apple did every year. But if it has such a next big thing up its sleeve, investors would certainly like to see it soon.
So what’s eating Apple? Here are two of the hungriest worms eating away at its core.
Lack of Social Leadership: Duller Innovation Edge
Sure Apple has had a tradition of acquiring small companies that helped fill in a missing product or technology gap. But during Jobs’s last stand, it never thought of acquiring another company to get thought leadership in a critical technology area.
However, rumors that Apple was seeking a stake in Twitter suggest to me that it is giving up on its ability to craft a social network that takes away industry leadership. Even though reports are that Apple and Twitter did not come to terms — the fact of those negotiations suggests that Apple may be running out of innovation steam.
CEO Tim Cook said that Apple has to get social and discussions of outsourcing that capability make me wonder whether the company has abandoned an in-house approach. After all, Apple’s Ping social music sharing network did not take off after Facebook (FB) pulled out of the deal, reports GottaBeMobile.
In the last decade or so, Apple’s business strategy has depended on building an ecosystem of providers that created low-priced Apps and content that, in turn, drove consumers to buy its high-margin hardware.
