Apple just released the iPhone 7. Guess what, just like everyone was predicting, they removed the headphone jack.
And because of removing that jack, they’ve taken quite a beating from the popular press. I could pick on any of them, but I was just reading Newsweek, so we’ll start there. The article suggest that Apple has a problem because their strategy of ‘less is more’ for product development isn’t working anymore.
We could discuss the merits of this argument, but almost all of the arguments in the popular press are talking about how Apple will fade because of the poor decisions they’re making, and how they need to innovate in new product areas to keep growing. Fine.
Why does Apple need to keep growing?
That’s a question almost no one seems to be asking. They’re currently the most valuable company in the world, measured by market capitalization. Why does the most valuable company in the world need to keep expanding? Is it really a big deal if Apple becomes the 2nd most valuable company, or 10th, or whatever?
I certainly hope the management team at Apple isn’t worried about losing their cool. Market saturation, or losing their ‘hip’ status, isn’t the end of the world – it’s the end of this part of the business life cycle. Apple is at a maturation point in their life. They’re not going to be releasing new products in new industries all of the time, or at least they’re hitting some limits in that area. And that’s ok. They can’t grow forever. They can take the innovations they’ve created and slowly improve them in a mature market – this strategy still allows for big profits and stable earnings and a long-term prosperous Apple.
Of course, Apple will do something with all of their cash, and some of it will go to new products in new industries, to grow new market segments to further grow the Apple empire. And that’s good. But to suggest that Apple’s demise will come through market saturation or loss of ‘coolness’, or their product development strategy that removes a headphone jack – that’s just silly.