Apple Sailing Into A Perfect Storm? In Transition and Under Fire

5 minute read
Chris Knight avatar

apple ios 7 iphone 5s, samsung, android, power

Apple is all revved up for its a big second half to 2013 with iOS 7, new iPhones and iPads plus its future (not so) mystery gadgets. But are forces starting to conspire against Apple? Facing angry legislators and market rivals, new partners and a pragmatic, more cynical customer, Apple's efforts might not be enough to maintain its lustre.

Underpowered and Under Appreciated?

Whenever Apple talks about its products, as with the recent iOS 7 beta unveil, there's a sense of love and endeavor, a sense of investment and a, now rather irritating, reverence. But the casual user increasingly doesn't give a crap. They want something here, something now and something they can use to do work and have fun, without other elements getting in the way, and to hell with that "beta" tag, the knives are out already, berating iOS 7 in many areas.

With Apple having come bottom of a recent Which? consumer smartphone performance test, beaten even by the modest BlackBerry Z10 and trounced by Samsung's latest Galaxy S4 model, the sheen that often surrounds iOS devices may rapidly be tarnishing. Even if the next A7 processor restores parity, or a lead, it won't before long before others are running ahead, again. And, as Windows 8 shows, mucking around with an OS rarely goes well. 

Both iOS 7 and the new iPhone are some months away, and consumers in a hurry aren't likely to hang around with a raft of awesome new devices on or coming to market, like the new Sony Xperia Z Ultra, unveiled yesterday. Sure, Apple still has many millions of loyal customers, upgrading regularly and paying through iTunes for apps and content, but with talk of a peaking market, as Apple's market share flattens (predicted to reach single digits soon).


image: (C)Which? Magazine Smartphone Performance Test

Change Your Partners

Now, Apple can happily thrive with a flat customer base thanks to its massive margins, multiple-device users and repeat business, market share isn't everything after all. Recent deals like the $30 million iPad contract for Los Angeles schools can't hurt, and when Apple eventually produces a cheaper iPhone or a retina-display iPad mini, its sales could be off to the races again. 

But beyond them, two issues threaten Apple into 2014. Firstly, if it is dumping Samsung for TSMC as its chip making partner (and possibly Intel in the distant future, if you believe the gossip), it is walking into unknown territory. This could potentially present yield and other problems for its future A8 and A9 processors, although TSMC is a pretty big, safe bet. Still, just one blip in this transition and Apple could be faced with late products, low production runs, idle factories and a press having a field day. 

The next issue is that Apple's next big thing. If its the iWatch, a market that already sees Sony into its second generation SmartWatch and indie maker Pebble churning them out, Apple won't be new and moves to a market that is highly questionable in its size. Or, if the much-discussed HDTV set arrives, Apple will be trying sell something that every user already owns.


Pebble watches are attracting geeks, but where's the mass market?

Learning Opportunities

The transition to these products might see Apple's cunning interface design and technology built in, but they could still fail to spark consumer interest. Is Sony crowing over those SmartWatch sales, how about Pebble? What if the market for watches is just dead, or a hobby one at best? How many people dumped watches as mobile phones told them the time and have no plan to go back to a hunk of metal and glass on their wrist?

And for fans of their big-screen TV sets, Microsoft's upcoming Xbox One, Sony's PlayStation 4 could sell tens of millions, and duplicate many functions that Apple's TV hardware could offer. New generation set-top boxes could also see buyers investing small sums to keep their current HDTV set, perhaps until 4K resolution screens finally become common. 

For Love and Money

Needless to say, we're sure Apple's water-cooler-delivery people are way smarter than us, and deep in the company labs, all kinds of genius is being unleashed to work around these bumps and angles. But Apple is now behind the power curve, fighting a rapidly maturing market and seems to be making more enemies than friends, excluding those endless patent lawsuits.

While Android bathes in its own sea of negative press (piracy, malware, etc), yet seemingly shows no sign of weakening for it. Any hardware maker is only just one product failure away from becoming the next wounded RIM or Dell of the tech world. And, for Apple, every product has to be a hit, so perhaps that iPhone 5S, rumored to pack an A7 chip won't be enough even with a shiny new OS. 

The next few months will be critical for Apple as it tries to up the power, performance and the magic on its next products. Whatever they are, there's a sense that tax legislators, the press, stock holders, but most importantly, the consumers are looking to move in for the kill or move on.  

Of course, Apple has $145 billion in cash with which to sweeten any deals that need making, but the days of "wow moments" seem pretty much over to an increasingly ambivalent market that has seen the same rabbit out the same hat too many times.