Is Apple Doomed? Yes - But Only as Doomed as Everything Else

Yes, in a finite universe it is basically inevitable Apple will run into trouble. But it is a mistake to see in Apple's enormous recent success, or even in Steve Jobs' death, a set-up for its eventual total failure.

Apple is doomed. So writes Paul Turner, author of a new book, Insanely Doomed: Why Apple Will Crash Without Steve Jobs, and a recent article for The Huffington Post UK.

Doomed? Well, yes. Probably. But so is the United Kingdom, the English language and the species Homo Sapiens.

Eventually all winning streaks end. All empires crumble. All balloons pop. Except the ones that slowly leak air and get all wrinkly.

Anyway, the point is that I could predict the sun will stop shining one day and eventually I'll be correct. But that doesn't make me a genius, it makes me a patient troll with a stopwatch.

Making these kind of predictions is a clever strategy, though - if you're right you're a genius. If you're wrong, you're just not right yet.

Economists use this trick very often. Tech writers even more so.

Because yes, in a finite universe it is basically inevitable Apple will run into trouble. But it is a mistake to see in Apple's enormous recent success, or even in Steve Jobs' death, a set-up for its eventual total failure.

Turner's argument is that Apple depended on Steve Jobs - his innovation, insight and sales ability - and that without him it fell apart once, and will fall apart again.

His larger idea is that there are "two types of entrepreneur". On one side of the divide - the good side - is automobile innovator Henry Ford, who created "an entirely new system for making things" and thus enduring success. (Tell that to the US car industry.)

On the other side he puts Dr An Wang, founder of Wang Labs, who made some nice products including calculators and later word processors and computers, but whose company spontaneously evaporated-ish without his leadership. Into this category, Turner places Jobs. "Jobs was brilliant, no one questions that," says Turner. "But, unlike Ford, he didn't create a new system."

Now whether or not Steve Jobs fulfils Turner's criteria for, you know, whatever, I'm not sure. But that's not really the issue - the issue is whether Apple as a company is still set up for success without him there.

What that basically comes down to is can it (a) withstand setbacks and (b) come up with new ideas that will sell.

On both counts, it's hard to argue it can't.

First let's take resilience. In terms of share price Apple may well be nearing a peak. Companies that cross the $500bn market cap threshold don't generally stay there for long, and as the New York Times pointed out recently, at some point Apple will confront the law of large numbers.

But Apple isn't dependent on its share price. It's dependent on revenue and profit. And by that measure, Apple is about as far from collapse as the new iPad is from a Wang calculator. Apple made $13bn in profit last quarter - on revenues of around $45bn. 45 Billion. In a quarter.

That's lots. And lots. And with a war chest of $100bn in cash, which should grow even after the company announced $45bn of buybacks and dividends, Apple is well set to absorb a few setbacks that would sink other companies - just as Microsoft has done over the last decade or so with Zune, Vista, and other middling-successes and middling-failures. Now with Windows 8, Microsoft is innovating again. Groovy.

So even if Apple starts to falter, it's got time to figure it out. Unlike last time Jobs left Apple, in 1985, and the company dwindled to the point of bankruptcy while Jobs made cool stuff nobody used, Apple is larger, stronger and smarter, with a corporate structure in place that - while it can't replace Steve Jobs' individual talent - can certainly capitalise on the culture he instilled and the money he made.

Turner is right on one thing, though. What will determine Apple's long-term future is its ability to make products that people want.

But it is a mistake to assume, as Turner seems to, that this ability depends on the perception of its products being "cool".

It doesn't. Apple is critically dependent on only one thing - it's products being good.

Apple sold 3m new iPads over three days recently - again, lots - not because people were tricked into thinking they wanted them, or even because they were the most radically innovative product on the market, but because people like them, enjoy using them, and want to own them.

Delight your consumers. That lesson is Jobs' true legacy. It's hard to see that changing anytime soon.

But what about the long game? If not in 10 years, what about 20 or 50?

Let's imagine the Must-Have Device of 2057. For the sake of argument it's like a phone, but it floats, is transparent, and makes you sandwiches.

Which company around today would you expect to come up with it first? Or, rather, to come up with the first one that makes the first really tasty sandwiches?

Well, let's be honest. Who really knows? As I explained at the start of the post, anyone making long-term predictions is usually just trying to make themselves sound clever, get lucky, or annoy people enough to force them to publish a long-form response on The Huffington Post UK. (Damn.)

But at a guess? I'd say Apple's recent transition to being a mobile-first company, its clear integration strategy for iOS and OS X, its continuing hardware innovation and its huge investment in R&D all suggest it will continue to innovate for some time to come - and will be able to tear up its old business models when it needs to adapt and figure out the FloatPhone conundrum once and for all.

So while Turner is probably right - at some point in the next 30, 50 or 100 years Apple will probably face tough times, it's perhaps a little premature to put the administrators on standby.

Apple isn't doomed.

Trust me about the sun, though. That thing is screwed.


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