My two cents’ worth: Apple needs to grow market share and quit making mistakes. That seems a bit simplistic, but that’s the jist of a recent opinion piece in Fortune, entitled
“Steve Jobs: The Graying Prince of a Shrinking Kingdom”. Writer Brent Schlender said that Apple’s CEO “must run a very tight sandbox” and avoid costly errors.
Well, that seems pretty obvious — and applies to just about any company, not just Apple. Schlender also said that Apple needs to pay more attention to the rules of business. The writer reiterates Apple’s dismal fiscal first quarter, in which the company saw its first net loss in three years. He also talks of the recent quarter, in which the company made a small profit and beat Wall Street’s predictions, “reverting to its Perils of Pauline mode” and saving itself yet again.
Though the company is again in the black, the Fortune article says that “Apple’s solid revenue growth in 1999 and 2000 masked the fact that the company’s share of the PC market had continued to erode — down to less than 4 percent in the U.S. and 3 percent worldwide.”
Those figures vary, depending on which reporting agency you believe.
“The truth about Jobs’ speed bump: Apple, once a genuine power of PCdom, is shrinking again, threatening to become as inconsequential as Liechtenstein,” Schlender said.
The writer said that, though Jobs wants the company to be profitable, “deep down, this inveterate idealist thinks of Apple as a creative kinetic sculpture, not a mundane, conventional business” and that “life is good as long as Apple can provide him with the resources–both the cash and the engineering talent–to indulge his obsession to fashion and market the world’s most stylish and clever computers.”
However, Schlender said that the rules of business still apply, “even to what has become something of a boutique.”
“As a public company, Apple simply must grow again. It needs an appreciating stock price to satisfy investors and to reward options-laden employees,” he added. “And it must at the very least stabilize its market share in order to maintain the critical mass of users necessary to support its maverick computer architecture.”
If Schlender’s points are on target — and I certainly think that Apple needs a long term plan to nab a bigger piece of the computer user pie — it will be interesting to see how Apple plays the business game in the months ahead. Mac OS X holds the potential of increasing market share. And, hopefully, the company’s plans to focus on educational solutions will jump start its educational sales.
As for not making mistakes, well, that’s not going to happen. If you’re going to be an innovator, some ambitious projects (the Cube, for instance) may not work out or sell as planned. Unfortunately, excellent doesn’t always mean profitable.
But Apple can’t quit innovating. That’s what makes it the computing platform of choice, warts and all, for so many of us. Because when Apple quits innovating, that’s when it’s truly dead.