Apple matters on multiple levels: it is still (barely) the world's
largest company by market cap; it has been cited as a beacon of American
innovation, led by a rare visionary, Steve Jobs, who resurrected the
company he'd founded in the decade before his death; its products have
been more than just hardware devices - consumers view them as a
talisman, defining identities and allowing people to manifest their
personal and professional lives as they chose. In the past few years,
its stock price has been a proxy for that enthusiasm.
So what happened? What's most stunning about Apple's stunning and
sudden fall is that it is unfolding in the context of still stunning
actual results. Not only has the company not ceased growing, it is
expanding at an astonishing clip. Its revenue in the fourth quarter of
2012 was $54.5 billion compared to $46.33 billion a year ago - which is a
rise of 18 percent. Eighteen percent in a world economy that is barely
growing 3 percent. It sold 47 million iPhones in the quarter compared to
37 million a year ago, and 23 million iPads compared to 15 million a
Yes, Apple earnings were flat, and stock market mavens point
ominously to declining margins and shrinking earnings as telltale signs
of trouble. But that isn't a sign of shrinking market share - which has
been nearly fatal for former leaders such as Blackberry and Nokia. No,
Apple increased its global share of smartphone sales in a market that is
hardly robust - as Samsung, Apple's main competitor revealed as well.
And issues of tight margins and spending more money to produce and
market the same products are hardly Apple-specific and often given a
pass by investors for companies such as Amazon or LinkedIn.
Still, Apple is not just another story of the bizarre way that Wall
Street can value a company. It is that, but it's more as well. It seems
like only yesterday that Apple was being hailed as the great company of
our age, with its dying founder lionized in a best-selling biography as a
genius not just of our time but of any time. It seems like only
yesterday because it basically was only yesterday.
And before its recent image travails, Apple's sharp ascent was
equally stunning - written off as dead by the late 1990s, it emerged as
the tech innovator par excellence by the mid-2000s, invested with every
virtue. Now, it is regarded as a has-been, hocking commoditized phones
that any Chinese manufacturer can produce and tablets that every company
in the world seems to be making, led by a CEO whose expertise is
rationalizing the supply-chain. Hardly the stuff of dreams.
It's fair to say that Apple was never as transformative a social and
technological force as myth would have it. And the slaying of heroes is
hardly unique to our era. But the speed of lionizing and then
annihilating is enough to take your breath away. It's the cultural
equivalent of creative destruction. But unlike the economic version,
it's hard to see where the creative element creeps in.