Why Apple's future is under siege



05/17/2017 3:43 PM


Recently, Apple has become the first American company with capitalization exceeded the $ 800 billion mark. This news inspired rumors that release of the alleged "thousand dollar-worth" iPhone 8 will make Apple’s market cap rise to 1 trillion dollars. Since the beginning of the year, the company's share price has been on the rise, and sales of the iPhone were also doing well. It seems that Apple is holding a firm grip on the enviable image of its brand and its strong consumer base.



Angelo DeSantis
However, Apple can be affected by the shadow of failures, which once buried many corporate giants. No matter how strong the company looks now, it still remains and will remain, at least in the coming years, vulnerable.

Just take a look at Fortune 500 companies for the year 1955 and compare it with the current list. It turns out that only 12 percent of those brands that were world's largest in the mid-20th century managed stay afloat by the second decade of the 21st. Then and now, General Motors, Exxon and General Electric are listed among the top twenty of one of the largest and most profitable. The American US Steel lost much of its position. And companies like Armor (which produced meat semi-finished products and delicacies, as well as Dial soap), ceased to exist at all or were absorbed. It's still difficult to say what transformations are waiting for Apple in the coming years. Apple itself is reluctant to talk about it, or rather does not want to share the vision of its effective future.

The world is moving very fast towards a digital future, where gadgets will become an integral part in absolutely every part of our life. Within the next decade, digital devices will begin to become more and more interchangeable, less expensive and more powerful at the same time. They will turn into integral guides to various software and digital services, which will be concentrating the main profit. Analytics are not sure whether this is a sign of awareness from Apple, but now the company’s ecosystem is becoming less closed. A few years ago, transition from Apple’s platforms to Windows or Android became a real torture with lack of support and porting. Yet, having grown bigger, Apple also became a bit more open, just like its customers asked. Now, increasingly more people with different gadgets can work with digital data and store their information in cloud servers, leading a full-fledged digital life.

 It is not clear how Apple will try to stay away from such obviously contradictory tendencies. Experience of American automakers prove that market veterans change so much during their long existence that eventually they become completely different enterprises. What are Apple’s long-term plans regarding the company itself and its position in the world? In the world that is clearly not going to move in the direction that the company would like it to be.

Of course, Apple’s market cap is likely to reach the $ 1 trillion-dollar mark over the next few years. The world is not expecting a next wave of significant changes soon, so Apple still has time to prepare.

There is no doubt that Apple is run by very competent people. Now, however, it does not look like something that one day will be able to become the center of a new, evolving ecosystem. The company spends billions of dollars on R&D, but this fact does not explain how the company sees the world ahead, probably fearing of giving an advantage to the competitors. The company prefers to talk about its future only when presenting new products.

Tim Cook’s management is directing Apple towards openness and AI (artificial intelligence). Yet, every market player from the Silicon Valley is telling the same stories. This is not what you expect to hear from a company that is leading the whole world.

source: stocknews.com


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