A couple of days ago a colleague picked my brain with an interesting hypothetical question about Apple Inc. (NASDAQ:AAPL): Will we ever truly get that elusive “Next Apple”?
One answer is “no” — at least not in the sense that another company would use the moniker if the Apple you and I know and love ever gave it up.
The question is a philosophical one, though. Can another company ever capture investors’ hearts and minds with a product line that redefined “must-have” the way AAPL has?
It’s not an easy question to answer. Indeed, it’s a tough question just to process, in that it requires one to pinpoint exactly why Apple developed its mystical persona in the first place.
After sleeping on it for a couple of nights, though, I have an answer.
Why Apple Was a Freak Occurrence
I’ll gladly concede there is no other company like Apple Inc. if the diehard Apple fans will concede that the company didn’t get its wings and halo until early 2007, when it debuted its first-ever iPhone. Mac computers and the iPod were top-notch products by then, but it was the introduction of the consumer-friendly, game-changing smartphone that catapulted the company to greatness.
Giving credit where it’s due, it was the late Steve Jobs who willed the iPhone to greatness. He was pushy, a bit paranoid and an outright genius. His sense of what consumers wanted was uncanny.
On the other hand, Steve Jobs wouldn’t have been able to introduce the iPhone had it not been for the convergence of several technologies right around the same time.
One of them was the development of wireless internet connectivity.
Remember 2G? That was the type of connection the original iPhone used … about 0.06% as fast as the 4G technology currently in use. It stunk, but we didn’t know any better at the time. We thought it was great simply because we could connect to the internet on a handheld device almost as if it were a computer. The only thing that had even come close was the business-oriented BlackBerry.
The other big breakthrough at the time was a functional touchscreen. It wasn’t “new,” per se, but it was uncommon then. Most consumers had never seen one, let alone used one, and it was attached to a full-blown handheld computer.
That said, it would be wrong to chalk Apple’s rise to sainthood to lucky timing.
It was largely Steve Jobs that got the most out of the two hardware advances by making sure the phone utilized the Mac operating system and opening the OS up to third-party app developers even before “app” became a term. The wide array of functionality and customization also made the iPhone a huge cultural hit.
No “Next Apple”
Good news for owners of AAPL stock who for whatever reason depend on Apple being in a class all by itself — there’s no “next Apple” anywhere on the horizon.
That’s a tough assessment for me to voice. I’ve often made a point of explaining the dangers of putting a company on a pedestal, as it invariably leads to disappointment. No company is immune to bad decisions, the wrong conditions, and subsequent failure. What one company has done, another company can do. That’s just business.
Still, even while Apple Inc. is turning into just another consumer technology company, I don’t see any scenario where technologies will converge the way they did a decade ago, setting the stage for a genius-led breakthrough invention.
That’s not to say it will never happen. Clearly at some point in the future, some sort of technological breakthrough will intersect with popular culture to create some sort of opportunity for an outfit that singularly envisions a potential future nobody else sees. But there’s nothing like that on the horizon now, technologically or culturally. The closest thing may be what Tesla Motors Inc (NASDAQ:TSLA) has done for electric vehicles. All the same, Tesla’s impact pales in comparison to Apple’s impact a few years back.
But doesn’t that point of view still put Apple on the very pedestal I just said was dangerous?
In many regards, sure. But let me make one thing clear: Apple Inc. is no longer on that pedestal. It fell off a couple of quarters ago, once the market finally (even if subconsciously) recognized AAPL doesn’t write its own ticket any longer. Competitors have largely caught up, technically and philosophically.
Nevertheless, it was an amazing multiyear run Apple had, creating a brand name that was bigger than life, capable of evoking emotional responses just as easily as it was able to open people’s purse strings.
We won’t see anything quite like it again for a long, long time.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.