Now that Apple’s market capitalisation is larger than $500 billion — and more than the GDP of some developed countries — I have been intending to write an iBubble exposition, going even further into the evidence that Apple is spectacularly overvalued.
But today, Apple provided perhaps the strongest evidence that while I do not expect to see Apple’s share price to collapse any time soon, the company is — in terms of innovation — gradually running out of steam.
Yes: it’s called The new iPad. This is an absurd monicker: clumsy, cumbersome, self-righteous, but most of all incredibly boring. When the name was unveiled I wasn’t even sure that it was the thing’s name. I thought that at the end of the ceremony, there would be a grand unveiling: iPad 3, or even the cliched and technically-inaccurate iPad HD. But no; it is (loathsomely) called The new iPad.
The thing itself is fine; it receives a decent spec-bump, a gorgeous retina display, and of course includes access to the iTunes App ecosystem, which is easily the richest in the world. It will be a popular product, probably even more so than the iPad and iPad 2. But from an investment perspective, all of that is largely irrelevant. I am not trying to analyse the shape of the product; I am trying to analyse the shape of the company making the product, and its shape in years to come. Simply, I think Apple is missing Jobs’ talismanic leadership, and I think Apple’s wackier innovators are being crowded out by slick, corporate management. Tim Cook is a thoroughly corporate managerialist; not an acid-tripping bipolar Renaissance tech-evangelist like Jobs. Being the market leader is entirely different than being an innovative outsider, which is the company Apple was for so long; being the market leader means that the bean-counters become paranoid about not wanting to fix something that isn’t broken, and that kills innovation. Apple are going backwards; or worse Apple is turning into a Microsoft — dominant, but static.
Worse still is Apple’s latest OSX update, Mountain Lion. Gizmodo’s Jesus Diaz writes:
[Mountain Lion is] the antithesis of Jon Ive’s minimalistic design, all essence devoid of artifice. In fact, it goes against everything Apple used to defend when it was king of user interface development: that everything should follow the same language in order to make everything intuitive and familiar to the user. With iOS, Apple backtracked, saying that the application should mimic the real-world item it was to replace. It made a little sense on a phone, but almost none on your desktop. And it opens the door to a fragmented design language that could make the future of Apple design very unappealing. It is a slippery slope heading to a future in which every app has their own interface—a garish clusterfuck of onscreen gadgets.
And that is Apple today in a nutshell — it is going back on being the sleek, elegant and intuitive creature that it once was. Apple has lost its capacity to think different. Perhaps that is Jobs’ fault for promoting the wrong people, or perhaps that is simply the inevitable endpoint of bureaucratic-technocratic managerialism (I tend toward the latter).
The biggest issue, though, is this:
The market is already deeply invested — both emotionally and financially — in Apple: the brand, the products, the process, the people, the mythos.
And while Jobs claimed to have left Apple a little innovative dynamite in the iTV, I think after the iPhone 4s, and the new iPad (see how cumbersome that is?) it is safe to conclude that its launch will be safe and successful, but not industry shattering.
Unlike the NASDAQ, Apple is less likely to crash or to drop precipitously. More likely it will simply stagnate as technology’s have-nots — led by braver and younger minds than Cook — innovate more.
azizonomics 
@Aziz “Tim Cook is a thoroughly corporate managerialist; not an acid-tripping bipolar Renaissance tech-evangelist like Jobs”
Bang on! We’ll see where Apple heads. I think down. BiPolar disorder is gods gift of “juicing” intelligence/creativity, but Yin Yang holds true.
I have an Ipad 1. It does the job of being a mobile web browser, diary. If it combines a phone and USB storage device, linking Word, Excel Powerpoint, I think it would be perfect for me ( And may I add a camera, but I personally don’t take a lot of photos of vapid friends at clubs and social outings). I am not sure if Ipad New does this but I will wait when one does. The technology I have works, I don’t waste money for the sake of it.
I have an iPad 1 too. It gets about 5% as much use as my Macbook Air, which is a vastly superior computer. I think I will probably wait out this year and get an iPad 4, hopefully with haptic feedback and Siri, and a less stupid name.
iPad 2013 = The new new iPad.
iPad over 9000.
What? 9000? There’s no way that can be right!
Jeez Louise! What’s with the Apple hating? Because they did not come out with the next biggest, greatest what ever you call it they all of a sudden are no longer innovators? Wow!
Apple hating? I think people who come here are not interested in any kind of love or hate, but rather they want to read about where I think Apple as a company are going. I’ve been an Apple customer and investor for over a decade, I’m typing this on a Macbook Air. They are a phenomenal company, and probably the most widely-written about company on the web today. In ten years time, if Apple’s market cap has continued to grow, if they are still the biggest company in the world, and if their product lines continue to be widely successful I will know that I was wrong. We shall see.
I own an Apple G4 for almost 10 years and love it but don’t own a iPhone or iPad because don’t know what to do with them. Really have no need for any of that. At least not yet. Don’t want to pay AT&T big monthly bill for digital trashy information dumping down. Still using the free old Nokia cellphone which is really enough at this point.
Don’t understand the trendy culture people who are playing with a iPhone or iPad all day long.
Yes the G4 came from a classic era of Apple design and last-ability. Macs today seem to have way too many Logic board failures, fan failures, etc etc.
Looking at your iPhone/iPad while talking to a group of people is so 2011
Talking to people is so 2010
That graph reminds of my old investment analogy: “Investing is like sex; it always ends in regret when you don’t pull out in time!”
I wish investing was not like sex. But that is nature; strong and innovative companies like Apple work hard to increase their share price and become the market leader. When they become the market leader they stop innovating. Strength seems to weaken.
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Apple like Microsoft and Boeing among others are all part of the military industrial complex, if this was not true, they would all probably be failures in consumer markets too. I was not too impressed with the first ipad, more PR hype than real substance…a laptop without a physical keyboard…ok if you do not need to type. Just more consumerist crap being sold to people who lack confidence and self-esteem (due to state schooling) and who need things to feel like they are someone.
Did you know Siri was developed by DARPA?
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