Is Apple making the same mistakes made by Nokia?
Slowing sales, controversies, and a lack of innovation might push Apple towards a decline
American multinational company Apple, founded by Steve Jobs, Steve Wozniak, and Ronald Wayne, is the world's second most valuable company after Microsoft.
But the tech giant is making the same mistakes committed by Finnish telecommunications and information technology company Nokia.
Slowing sales, controversies, and a lack of innovation might push Apple towards a decline.
From garage start-up to megalith worth $2 trillion
The company has impacted hundreds of millions of lives since its 1976 founding in a garage.
Apple raced to success in the late 1970s and early 1980s, but foundered after the departure of Jobs and Wozniak.
The company was reinvigorated in the late 1990s, and Jobs was brought back into the fold as the chief executive.
With his passion for minimalist design and marketing genius, Jobs changed the course of personal computing during two stints at Apple and then brought a revolution to the mobile market.
He oversaw the launch of the iPod, and later the world-changing iPhone, that put the internet in people's pockets. It was dubbed the “Jesus phone” for its quasi-religious following.
However, after his death in 2011 due to a rare form of pancreatic cancer, it lost a visionary leader.
Jobs’ death came just one day after Cook presented a new iPhone at the kind of gala event that became Jobs’ trademark.
Perhaps coincidentally, the new device got lukewarm reviews, with many saying it wasn’t a big enough improvement over the existing version of one of the most successful consumer products in history.
Apple still faces challenges in the absence of the man who was its chief product designer, marketing guru and salesman nonpareil.
Phones running Google’s Android software are gaining share in the smartphone market, and there are questions over what the next big thing is in Apple’s product line.
While the company's greatest challenge is to reposition the company’s fabled marketing apparatus to safeguard the brand, experts believe Cook is likely sticking to established battle plans at this critical juncture.
Blast from the past
Finnish telecoms network equipment maker Nokia failed to keep pace with changing customer needs and adaptation to market dynamics.
In the popular narrative of Nokia’s eclipse, it is Apple’s iPhone that steals the light, but the company also lost its shine in the basic phone market, which had been a reliable generator of profits and carried the promise of years of strong growth in emerging markets.
The company abandoned its own Symbian smartphone operating system in 2011 in favor of the largely untried Windows Phone alternative after Stephen Elop joined as chief executive from Windows maker Microsoft.
Nokia’s decline was partly down to a lack of entrepreneurial leadership and the failure to face up to bad news, according to the book by Risto Siilasmaa, Nokia’s chairman, who joined the company’s board in 2008.
Microsoft Corp bought Nokia’s phone business and license its patents for 5.44 billion euros ($7.2 billion) in 2013 and sold them for $350 million to Foxconn three years later.
Traded magic for profit?
The fall of Nokia and the rise of Apple as a smartphone giant are deeply intertwined.
Apple, which throughout the global recession near-unfailingly smashed Wall Street forecasts, is beginning to lose its aura of invincibility.
Apple took a $6 billion hit to its sales during the fiscal fourth quarter due to persistent global supply chain problems. The company has missed Wall Street targets twice in under a year.
CEO Tim Cook may now have to worry more about economic and product launch cycles, and the whims of fickle consumers.
The blockbuster smartphone that adds a special gloss to the Apple brand is a highly cyclical product. Buyers emerge in droves every time a new version is launched, lining up at stores overnight, and snarling supply for the device.
Its popularity has heightened speculation around the device every year as over 100 million yearly customers decide when to switch to a new model, whether to buy now or hold out for a better but same-priced phone.
The now-more predictable line-up also means consumers are more attuned to product life cycles and launch timelines, something that Apple goes to great lengths to keep secret.
Apple dodged a bullet in 2021 when a US federal court said Fortnite maker Epic Games failed to show the iPhone giant held an illegal monopoly, but the firm was still ordered to loosen control over its App Store that serves as a sole gateway onto its coveted mobile devices and takes commissions of purchases.
It is unlikely to meet production goals for its new iPhone before the holidays because of a global electronic chip shortage, according to a recent report.
Apple is facing criticism and lawsuits over the tight control of its "ecosystem" from iPhone hardware to the apps allowed on handsets.
It has become reliant on customer upgrades in the face of a saturated market more than a decade ago.
Customers have delayed replacing their phones and are instead fixing their old gadgets amid the coronavirus pandemic.
The company has started a 'Self Service Repair' programme in the United States offering to sell tools and parts to people who want to work on damaged iPhone 12 or 13 model handsets.
It will initially focus on parts more prone to damage, such as screens, batteries, and cameras.
The programme will be rolled out in other countries during the course of next year, and be expanded to include some Mac computers, said the Silicon Valley-based company.