Post-Steve Jobs: Wash, Rinse, Repeat – Apple Hits $1T

Post-Steve Jobs: Wash, Rinse, Repeat – Apple Hits $1T

Apple hit $1 trillion market cap last week – the first publicly traded US company to reach that mark. In case you’ve forgotten or were not yet on the planet at the time, Apple was in trouble in the ‘90s and was ‘bailed out’ by Microsoft in August of 97. There was more to it than that, including patent infringement issues (on MSFT’s part) and the fact that, had Apple disappeared, Microsoft might have been declared a monopoly (this was pre-Google, if you can image such a world).

For the record, Amazon is also approaching the $1 trillion dollar market cap mark, and the reason is simple, as CNBC points out in Apple’s case: “I think it just speaks to just how powerful the Apple ecosystem has become over the last few decades,” (said) GBH Insights analyst Dan Ives… Ives credited the company’s growing software and services revenue with driving the valuation. The catch-all category — which includes the App Store, AppleCare, Apple Pay, iTunes and cloud services.”

And hasn’t Amazon diversified over the years as well?

Some History

While it did take Apple years to get to the valuation, considering that it was founded in 1976 by the Steves Jobs and Wozniak (and Ronald Wayne), Apple always had a vision – and a revenue stream. Also worth recalling: Wozniak left the company on his own, and Jobs was kicked out by the board, only to return when he was older, wiser and capable of running a business based on more than simply his whims and desires.

Not that we’re attempting to draw any parallels between Jobs and another founder who has been in the news quite a bit lately, and in this newsletter as well.

The Bad

Apple is far from being a perfect company and has certain had its share of failures, controversies and missteps , over the years.

As has Amazon. Remember the Fire Phone? Flamed out pretty quickly.

Both companies continue to create and release products for which people are willing to pay.

The Good

Steve Jobs was the Apple visionary who created the products that made it possible for the company to hit this benchmark. With all due respect, Tim Cook has been the very capable steward of the vision. Wash, rinse, spin, repeat.

And as every investor knows and which every entrepreneur has heard ad nauseam, despite the fact that it may be low on their benchmark priority lists: revenue is always a good thing. Since those initial investments – as well as, in Apple’s case, the MSFT ‘bailout’ – neither Apple nor Amazon has been in need of additional cash infusions. They make products people want, no matter your personal feelings about either or both.

Amazon started as a software (ecommerce) company and Apple as a hardware (and software) company. Neither vertical was/is an easy row to hoe, especially in those nascent days of technology.

We were there when ‘startup guy’ Jeff Bezos was the laughingstock of tech and remember when Steve Jobs was persona non grata following his unceremonious ouster from Apple. Resistance came early to both. Neither was held up on a pedestal, nor hailed by the tech press as wunderkinds who could do wrong from time to time but, no worries, all would be forgiven, despite all adversity.

The Ugly

Of course, as Techcrunch points out, Apple did cut corners to get to its current valuation (The greedy ways Apple got to the $1T). Under Steve Jobs, Apple’s focus was on design and attention to detail. That has changed. To refresh your memory:

Does Apple deliberately slow its old models before a new release? Searches for ‘iPhone slow’ show a spike ahead of launches? Guess that if you’re pushing for that $1T market cap, “It Just Works.” The company said no. Research proved otherwise. Then Apple said, Yes, we’re slowing down older phones.

Turns out that Apple’s customers were not the crazy ones after all.

While we’ve long been fed the pabulum that the idea is to move fast and break things, lest we forget, it’s slow and steady that wins the race. Apple persevered, but still, customers don’t appreciate it when you purposely slow down products in order to push them into purchasing newer phones.

As we learned very recently, and tech take note, hubris is a valuation killer.

Apple needs to pay attention to its base again. The company doesn’t always release its products on time. While move fast and break things is obviously not Apple’s mantra, still, Apple, you may well lose customers – and potentially that trillion dollar valuation – if you continue to stop paying attention to the details and things break.

Onward and forward.

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