Report outlines ‘5 biggest problems facing Apple’

Apple Business Analysis

Pundits and bloggers love telling us what Apple (AAPL) “needs” to do. The world’s most successful consumer electronics company could do no wrong just five short months ago, and now there’s doom and gloom around every corner. While Apple’s stock has taken a huge hit over the past few months, the company appears likely to hold its seat atop the industry for some time yet. No company is without flaws, of course, and a recent Forbes piece does a better than average job of using a level head to outline some key areas where Apple has shown weakness.

Forbes contributor Eric Jackson got tired off all the buzz surrounding David Einhorn’s recent “sideshow” and the continued call for Apple to return more cash to investors, and so he decided to focus on five areas where Apple is actually facing what he views as “big problems.” Jackson lays out his list as follows:

  1. Relatively weak cloud services: “Does Apple have enough cloud talent inside the company to continue to grow and develop iCloud? It’s debatable.”
  2. A less than optimal approach to Internet services: “Apple is again taking a go slow and grind it out approach to these. MobileMe didn’t work. We’ll learn from that. Apple Maps didn’t work. We’ll learn from that. The thinking seems to be internally: we don’t need to be first to market with great services, we just need to get to market. Sadly though, consumers seem to be getting more and more impatient in waiting around for Apple.”
  3. A bad track record with social products: “From an internal skill set perspective, it’s not obvious that Apple can understand social and take advantage of its evolution from here, without having a lot of internal talent who live and breathe social.”
  4. Difficulties with big acquisitions: “The Quattro Wireless deal – I would conclude – was unsuccessful. The founders are gone. Did Apple really get everything they could have out of it with iAd? I don’t think so. Siri is also an interesting case study. Apple has of course made it a major focus and selling point for the new iPhones starting last year. And it’s now under the purview of Eddy Cue and an outsider who came in from Amazon search. But the Siri founders are also out of the company now.”
  5. An apparent lack of awareness that Apple has some big problems: “Maybe they do know [they have weaknesses] and are actively working on it. But if that’s true, it’s really not at all obvious. Apple’s culture is tremendously secretive. They also have tremendous talent there. But the DNA of the company is really just working away in silence away from the eyes of others.”

Jackson acknowledges that Apple CEO Tim Cook and his team may in fact be actively working on addressing these matters behind closed doors, but if this is the case, Cook is certainly not communicating anything with investors. The good news, he says, is that cash will play a big role in attacking these issues, and Apple has plenty of cash on hand to get the job done.

“All this could use require a lot of cash,” Jackson wrote. “And that’s exactly why Apple needs to be careful not to be distracted by short-term calls for return of cash from its investors.”

Source:
Forbes
blog comments powered by Disqus