The world’s biggest and most loved tech company Apple is under existential threat.
Sales are slowing. Innovation is lagging. Siri’s in a coma. AI’s a pipedream. Tariffs are biting. And its reliance on China has the MAGA White House seeing red.
It’s also under massive regulatory scrutiny, and about to follow Google and Meta into America’s unforgiving antitrust courts, as well as being sued by half the world.
The result is that one of the most famous innovators in human history is losing its shine, shape, reputation, leadership position, and value, at an alarming rate.
Investors are spooked. Warren Buffett sold more than half his Apple stock worth almost $80 billion last year. He’s always ahead of the curve.
Apple’s value has since collapsed by US$700 billion.
That’s the GDP of Argentina, or
US$44k a second, or
3x the value of Samsung.
Vaporised in just six months.
So why is this happening? And why now?
Is it the price of bad strategy? Geopolitical shifts? Bad luck. Or are we just seeing a big company reach the end of a golden run?
Before we get to it, join me in welcoming new subs over the past week from BBC News in London, The American Journalism Project focused on rebuilding local US newsrooms, data scientists Melt Collective in the UK who work with Netflix and others on AI-generated forecasting (which sound very cool), fellow Substackers and podcasters Rethinking Tech, the office of Australia’s esafety commissioner (who’s been having some fun with Mr Musk), global comms giants We Communications, and Abu Dhabi-based crypto venture fund Varys, among others.
Welcome all.
Joining
and I on the podcast today is , one of the legal eagles called in during the aftermath of Microsoft’s antitrust break-up 25 years ago.He’s one of only a few in the world to have had a front row seat to the dethroning of a tech goliath, giving him a unique perspective.
And he blames Apple’s arrogance and belligerence for its downfall.
With the law:
“It tried to give the middle finger to a judge, but she caught on that execs had lied, and that pissed her off.”
With consumers:
“Apple’s darker side has been hidden to most people. My job is not to tarnish its reputation but expose it to the light. Its conduct would have made Microsoft blush with embarrassment.”
And with politicians:
“When Donald Trump was kicked off of Twitter, there was an alternative app called Parler. Apple said no to it in their app stores, and Republicans woke up. Apple had the power to stop them, and it did, and it still does.”
It’s a fascinating chat that tells a very different story from the one the marketers sell us and predicts a difficult time ahead for the falling star of the US stock market.
Yes, that’s -17.41 per cent YTD!
Update:
Since this interview, rumours have been emerging that Apple may buy Perplexity AI to close its gap on OpenAI, Microsoft Copilot, Meta AI, and Google Gemini.
I can’t see that getting past regulators, who are already probing Meta’s $14.8 billion bid for Scale AI, and Google’s US$32 billion bid for cloud security start-up Wiz.
Politicians and regulators won’t allow Apple to dip into its $64 billion coffers to roll up Perplexity into the family now they have it in their crosshairs.
They’ll need some serious convincing given how clear the Department of Justice has been that it wants Apple to compete for its dominance not pay for it.
The DoJ has been less than subtle…
Also, Google has had a shocking history on acquisitions. Bloomberg reports:
The Beats transaction led to a culture clash. Still, the acquisition ultimately paid off by laying the groundwork for Apple Music and bolstering hardware sales.
The $1 billion purchase of Intel’s modem business brought in patents and engineers to fuel Apple’s chip ambitions. But Intel’s talent didn’t mesh well, and large portions were abandoned.
In 2016, Apple invested $1 billion in DiDi, the Uber of China hoping to strengthen ties and support its secretive car project. The bet imploded after Chinese regulators cracked down on DiDi, leaving the investment virtually worthless.
Finally, Apple’s woes extend well beyond regulators, politicians and courts.
It is exposed geopolitically.
It is falling behind on product.
And on public perception.
For the record, I am not an Apple downer. I use its products every day and have owned every iPhone and Mac. I am as disappointed as anyone…
See you next time…
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