SAN FRANCISCO – A panel of journalists who cover Apple said critics of the tech company are just haters who should stop finding things to complain about regarding the company – like a 38 percent drop in its stock price over the last five months – and simply adore Apple like they do.
“I think we’re all Apple fans here,” said Dan Moren, senior editor at Macworld, in a classic case of understatement, as he began to moderate a panel discussion titled “The State of Apple 2013” at the Macworld conference Friday, which included other tech journalists. But to me there’s a difference between being a journalist covering Apple and drinking their Kool-Aid by the gallon.
While the reporters who spoke are all experienced enough to provide important insight into Apple and the markets in which it competes, they were too quick to dismiss criticism of the company as uninformed, driven by jealousy or resentment, and were too quick to dismiss Apple’s competitors as unworthy and also jealous of Apple’s success.
Moren set up the discussion with a blanket statement about the mainstream media’s perception “that Apple is this doomed company that is just, cosmically, never gonna succeed,” one of many examples of the hyperbole coming from the panel.
Apple is unfairly judged by its market share instead of its profitability, argued John Gruber, the founder of the blog site Daring Fireball. Apple may have just a 7 percent share of the mobile handset market, but it made 70 percent of the profit, he said.
But Apple is not the first company with low market share and healthy profits. Ferrari sells far fewer cars than Ford, but I’m sure Ferrari is profitable, too, so that’s kind of a specious argument.
And market share is a legitimate measure of a company’s performance versus its competitors. While Apple iPad sales increased by 48.1 percent in the fourth quarter of 2012, versus the year ago quarter, it’s market share slipped to 43.6 percent from 51.7 percent, according to IDC. Why? Because sales of Samsung and Asus tablets rose by 263 percent and 402.3 percent, respectively. In other words, even though their market share is a fraction of Apple’s, an increasing number of people are buying something other than an iPad.
I agree with the general consensus of the panelists that Apple’s success -- as a very profitable company with a world leading market valuation (though it briefly fell below Exxon Mobil recently) and market-changing products -- makes it a target for critics. But that doesn’t mean those criticisms aren’t valid.
Take the decline of Apple’s stock price from a high of $705 a share last September to $435 on Friday. Among the factors leading to that, according to a number of analysts, are declining selling prices for Apple products, declining gross and profit margins, Apple’s acknowledgement that iPad Mini sales may cannibalize sales of iPads and a general belief that the latest iPhone and iPad upgrades haven’t been earthshaking achievements. Kind of “what have you done for me lately?”
But I think panelist Ryan Block, co-founder of the tech site gdgt, was a bit dismissive of the stock slide when he said, “there is an investor management issue at Apple right now.” And the stock issue was never discussed again.
The fact is that the stock market is a perfect example of crowdsourcing. Millions of investors make decisions good and bad about companies every day. And because Apple is so successful it is going to draw more market scrutiny. Apple has 45 investment analysts who follow the stock. Smaller companies are lucky to have one or two. And when news like Apple’s reported scaling back of orders for iPhone screens emerges, analysts are going to take note, the market will absorb that information and adjust for it. Not all analysts interpret news the same way but the Macworld panel said the screen news was overblown.
“Why doesn’t anybody ask these questions about Samsung?” asked Gruber, referring to Apple product glitch news. Then he added: “When is Samsung going to invent the big new thing that changes everything.”
His complaint reminded me of the Samsung ads for the Galaxy SIII, timed to the launch of iPhone 5, with the tag line. “The next big thing is already here.”
But I agree with Gruber that some coverage of Apple is overblown, particularly the news about “Antenna Gate,” where iPhone 4 users complained in 2011 that calls dropped if they held the phone a certain way. Only a tiny fraction of users reported experiencing the problem, media coverage was excessive and some critics reacted “like this was gonna sink the company,” said Gruber.
But the Apple Maps fiasco was another matter. When the new app premiered last year, images of roads and bridges were distorted, buildings were misidentified, large sections of some maps were blank and a pinpoint of one address was located in the middle of an airport runway.
The negative coverage of Apple Maps was warranted, said Jacqui Cheng, senior editor at Ars Technica, who singled out the application’s dearth of information about mass transit systems.
“For people like me who live in large cities and use public transit, there was not enough information on public transit in Apple Maps,” Cheng said.
And while Christina Bonnington, staff writer for Wired, complained that “people just want to take [Apple] down,” she acknowledged that because Apple wowed the market with the iPod, iPhone and iPad, there is an expectation that Apple will wow every time, but hasn’t lately.
“They have got this phone that looks maybe a little different than it did three or four years ago but the experience is pretty much the same,” Bonnington said, adding that Apple should focus on the user interface, not just a new product design.
To be sure, Apple has brought to the market some amazing products that have bested those of its competitors, wowed customers and made the company hugely profitable and successful. But Apple has made some mistakes and in many cases its competitors have risen to the Apple challenge and achieved their own successes. Samsung, for instance, is far and away the largest seller of smartphones globally and smartphones running Google Android, a competitor to Apple iOS, are leading the market.
The panelists who felt that Apple is being unfairly put upon by haters and who dismissed competitors with snarkiness should understand that Apple is not the center of the tech universe. It’s a company that has to compete with others in the market just like everybody else.
By the way, full disclosure. I had been a Windows PC guy for 20 years until I went completely Apple last year. I replaced a Samsung Galaxy Tab with an iPad, an HTC Android phone with an iPhone and a Windows 7 laptop with a Mac Book Air. They all deliver better performance and reliability than the devices they replaced.
I just don’t think Apple walks on water.
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