Do “Disruptive” Companies Have a Lifecycle?

At Forbes Stephen McBride makes some thought-provoking observations about Apple. The lowest price for the latest iPhone is $1,149—500% of what you would have paid for an iPhone eight years ago. Each year for the last several years Apple has been selling fewer phones. iPhones are two-thirds of Apple’s overall sales. Cutting prices won’t help them.

A publicly traded company that makes most of its money from selling phones is no longer telling investors how many phones it sells!

And its other business lines can’t pick up the slack for falling iPhone sales.

Twenty percent of Apple’s revenue comes from iPads and computers. Those segments are also stagnant.

Which means 86% of Apple’s business is going nowhere.

Could Apple go the other way and slash iPhone prices?

I ran the numbers.

If Apple cut prices back to 2016 levels, it would have to sell 41 million additional phones just to match 2018’s revenue.

The larger point that he raises is that there may be a lifecycle to these disruptive tech companies. Back in 2007 Nokia was cock of the smartphone walk. Its stock has declined 80% since then. Is it Apple’s turn now?

6 comments… add one
  • Andy Link

    Another question to ask is where would Apple be if it had never invented the iPod, iPad and the iPhone? How many MAC sales would they need for 2018’s earnings?

    Apple has succeeded because it brings innovative/disruptive products to market, so what Apple needs is a new product or game-changing innovation. It remains to be seen if they can do that without Steve Jobs.

  • They certainly can’t do it with a supply chain guy which is what they’ve got now. In fact the very hiring of Tim Cook as Apple’s CEO calls into question the image of Apple as a company that “brings innovative/disruptive products to market”. It suggests that it either is or wants to be a company that has a very effective global supply chain.

  • Guarneri Link

    I’ve said it before, I’ll say it again: “why do people buy?” Its not their supply chain.

    Only when your business model is low cost production does your manufacturing and delivery footprint win the day. This isn’t a steel or fertilizer production company.

  • CuriousOnlooker Link

    The vision thing is hard to hire – if you have the vision to disrupt entire industries; why would you work for X instead of starting your own business?

    That’s not to say it is Apple’s fate to be a Nokia. Microsoft stock crashed 50% in 99 as PC’s hit saturation and Bill Gates started moving on. It stagnated for 13 years but it’s revitalized itself in the last 5 and recently was again the worlds most valuable company.

  • Apple clearly has a personality split between Dr. Jekyll (Steve Jobs) and Mr. Hyde (John Scully, Tim Cook) or vice versa—creativity and an efficient commodity-based company. When John Scully was in charge he nearly ran the company aground.

  • steve Link

    The ROI on the last couple of IPhones was poor. Unless they have some sort of breakthrough I would expect a drop. No company stays on top forever.

    “if you have the vision to disrupt entire industries; why would you work for X instead of starting your own business?”

    I dont think there are that many people who are creative geniuses and also good at business. Some would rather leave the business side to business people.


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