At the core of Apple is to have the trust of its customers, but may they be at risk of losing their way?
Numbers don’t always add up
The last set of financial results posted by Apple, were the first results in an age, that hasn’t seen exponential, year-on-year, growth.
That continued growth, has not come by chance. Tough, but fair leadership, continuing to innovate, and reacting to consumer needs, have all, doubtless, played their part in their success.
Sometimes, though, it’s easy to get caught in the heat of battle, and lose your way. Another large player in the companies runaway success, is that its customers trust them.
Losing their way
A couple of short years ago, Apple, along with numerous other large tech companies, signed up to a statement, that in essence said, there was more to running a company, than purely it’s bottom-line profit margin.
Apple were among those that believed that protecting the environment, providing for employees, combatting economic inequality, and providing value to customers, also mattered. Since signing up, the Californian company has gone on to become the most valuable company in the world. As such, they now find themselves leading from the front. Others will look to them, to take their lead.
I just wonder if they are at a pivotal point, where the need for the next shareholder’s dollar, may be about to eclipse, what they have always aspired to be.
I am not trying to throw all the blame their way, either. Apple, is a company with responsibilities to their board, shareholders, and employees. I wrote recently how they have found a way to avoid mass layoffs, and offer their employees job security. This is the good side of the company.
The economic world, the analysts, accountants, and even Wall Street scrutinise every move that the company makes. There is an assumption, an expectation even, that they will forever return growth, quarter upon quarter, year upon year.
But, everything, even roaring success, has a ‘stop’ point. Apple has more money than they can spend – an enviable problem, I know, but a slowdown is almost a given at some point. If your petrol tank is full, you can’t physically pump more gas in to it. A coarse analogy, I know, but you get my point!
Let me give you some context of the numbers we are bandying around here.
Apple’s profits, are just shy of $1 billion. That means that they are generating more profit than over half the countries in the world’s GDP (gross domestic profit). Again, this is profit we are talking about – the spare change down the back of the sofa, as it were. Their revenue was a staggering $316 billion. That figure, alone, puts them among the top forty countries in the world if measured by GDP.
A change of fortune
Of course, this ocean of surplus cash, has not always been the way. There have been hard times, that are easily forgotten. There was an era when the name plaque on the CEO’s desk would change more frequently than the UK’s Prime Minister! The company was once on the verge of bankruptcy.
The timing of Apple buying out NeXT, and welcoming back their co-founder Steve Jobs, was picture-perfect. Jobs may have had his faults, don’t we all, but he had ingenuity coursing through his veins. Strange to think had it not been for him, the world may never have seen the iMac, iPod, and of course, the iPhone.
That period in the doldrums, left a scar within Apple – a fear that one day, those bad days could return, and rob them of their glory. For the longest time, Apple sat on those profits, hoarding, and keeping a pessimistic eye out for the companies grim-reaper. Recently, their stance has eased, as they now strive to become ‘cash-neutral’ – and given the sheer amount of cash, that is not easily achievable!
I’m left to wonder if those deep-rooted wounds are what is behind their current perspective, that they have to earn their cut on every transaction. With ever more advertising creeping in to their native apps, and the transaction fees on their App Store, and raising prices for the services, it just all feels a little one way. It would be more than understandably if we saw these actions coming from a company panicking, and fearing their demise – but from Apple? Is this kind of behaviour truly palatable, or sustainable?
The Jobs mantra
Aside from his genius, Jobs was also a businessman too. From the earliest time, he held the firm-rooted belief that Apple should always get it’s cut. His take was that anyone making money out of Apple, should pay theirs dues back to the company. And so, the culture of accessory makers, and developers being expected to share their profits with Apple took root. It was from this culture that the Made For iPod, and now iPhone, licensing program came to be. And, pre-dating the App Store tax, iTunes Music Store had its own 30% cut in place.
I run my own business, so I totally get the need to mark-up services. It’s the way I add my value back in to whatever I am up to. It’s no different to a sports agent taking a cut of their client’s spoils for securing them great brand associations.
And it has had some benefits for developers too. Being a Mac developer, used to cost almost five-times as much as it does today. And the reason behind that reduction, was the soaring success that the App Store proved to be. Due to its success, Apple, in turn made the barrier to entry, substantially lower.
Time for change?
Apple, if anything, has become even more intent on sticking to their guns, and believing that taking a cut is something that is rightfully theirs. Every transaction on the App store, still earns them 30%. I know, they built the store and all that, but some softening of their ways could surely be allowed for – remember cash-neutral…
But they have become more militant, and dogged, making themselves less and less helpful to those developers wanting to take an alternative route. Any attempts to find legal loopholes, have been crushed to the point of antitrust regulators around the world now looking in to them. Is it me, or does this all feel a little cheap, as if Apple are at risk of sullying their reputation?
Growth, and profit, regardless of the damage caused, doesn’t come without its own price – trust.
The current CEO, Tim Cook, loves to remind us of the customer satisfaction scores. He effuses over them with a glowing pride, as if they are his go-to metric, his Rosetta Stone. But, recall I mentioned those fears, that all the billions could once again vanish, well, if he is not careful, it could be Apple’s customer’s trust that disappears first.
It’s super easy to take your eyes off the game, certainly with the invisible, yet tangible assets of a company. In the blink of an eye, it can vanish – Twitter – need I say more?
Lesson need to be learned, and in double time.
I love what Apple offers, and in general, what they stand for. I am not expecting an entire change of direction, protocols, or systems. But, just like they have changed their image, and products, Apple is more than able to effect a change in this area of greed, if they wanted to, badly enough.
They are now in the privileged position of being one of the most successful companies – ever! It’s time for them to lead, ethically, from the front.
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