Adrian Weckler: Apple's multi-billion dollar 'flops'
There's a weird tradition that occurs every time Apple holds a major event: its shares fall. It happened again last week. Even before Tim Cook took to the stage at the company's annual Worldwide Developer Conference (WWDC) to unveil the new HomePod smart speaker, the new iPad Pro and the new iMac Pro, Apple shares had fallen by over 1pc (almost €8bn).
As they do every single time, the shares then regained their pre-WWDC level within 48 hours. As I sit writing this column in San Jose, they're now ahead of where they were.
But why do they fall in the first place?
Because the big new product or service Apple announces is deemed for a few minutes not to be the next iPhone.
Thus, Apple is deemed to have 'lost it', or that 'it can't innovate anymore'. Some even opine that Apple is "doomed".
It's a bizarre rationale. The critics and share-dealers are benchmarking every new Apple service against the single most successful product the world has seen in the last 10 years.
A classic example is Apple's Watch. If you listen to some pundits, this is something of a disappointment because it hasn't had the same meteoric rise as the iPhone.
But a quick look at the figures show that the Watch now outsells any other watch or smartwatch, including the (much cheaper) Fitbit.
Indeed, within three years of launch, it has become the highest-grossing timepiece in the world with an estimated 3.6m units sold last year. In itself, it is now a €3bn business - bigger than Twitter. (But unlike Twitter, it's highly profitable.)
And it is still growing. Apple ceo Tim Cook said that Watch sales grew threefold last year. How many other companies reach a €3bn business for any of their product lines, let alone within three years of launch?
It's a similar story with the iPad. Sales of the tablet have been gradually declining over the last three years, probably because people are keeping their units for longer than anticipated.
As a result, you'll hear some talk about the iPad as a busted flush, yesterday's gadget. But the iPad sold 42 million units last year, resulting in over €20bn in revenue and a big profit.
€20bn! If the iPad were a standalone company, it would be over half the size of Facebook. If the iPad didn't grow sales for the next five years, it would still be one of the biggest, most profitable businesses in the world.
As it happens, the most recent industry figures suggest that iPad sales may now be stabilising. Apple is pushing hard with new iPads and new software for the machine, believing that it still has the potential to replace laptops for a great many people. I happen to believe this is correct, for (mostly generational) reasons I've written about in this column before.
But even if it isn't, the iPad's success deserves a little more perspective than to say it's a fad or has little right to be considered part of future computing.
But that seems to be the way of things. So, it's not really a surprise that we're seeing tinges of Apple ennui creep into coverage of its newly-announced HomePod speaker.
In case you missed it last week, Apple unveiled a 'smart' music speaker that can be used to control lighting systems, security alarms and home appliances.
It can also be used to get information from the web using Apple's Siri voice-control system - and it's a decent speaker that can compete with Sonos and other established hi-fi units.
But already, people are grumbling about Apple being "too late" to the smart speaker market, or that Siri isn't quite as good as the voice-recognition technology developed by Amazon (Alexa) or Google.
In other words, they're saying that the HomePod may be a nice side business for Apple, but it won't dominate its segment in the same way the iPhone dominates the phone business.
The reality is that 24 months from now, it's a solid bet that the HomePod will race into being a €1bn business in its own right.
If nothing else, Apple has shown that it has a greater propensity to hit than to miss, even if it's 'merely' a €1bn business instead of a €50bn one.
One last point: as Apple rolls out these products and services, other companies feel the pressure.
For instance, Apple's new HomePod speaker outguns the Amazon Echo or the Google Home speakers in music quality, but also beats Sonos for smart, voice-controlled functionality.
Because it's designed to work with the phone or tablet system that almost one billion people already have, it's a major threat to all of those companies' established markets.
Irish-based companies are hardly immune. One of the less-publicised announcements at WWDC was that Apple is introducing person-to-person payments in the iPhone's Messages app. It is doing this using Apple Pay, the payments system introduced earlier this year in Ireland.
At a stroke, this makes life more challenging for companies such as Circle, the large blockchain-powered peer-to-peer payments company with a headquarters in Dublin.
It also comes as an unpleasant welcoming gift for the Irish startup Plynk, which has just raised €25m from investors to roll out person-to-person payments in Europe.
If people can already transfer money easily using built-in Apple features on the iPhone they already have, competing startups might have a steeper hill to climb to achieve the scale they need.
It's always tempting to reduce new Apple products and services to a 'hot take' about whether the company has come up with an unparalleled product that will affect everyone in the world.
But just as investors lose money by selling off Apple shares after a big product launch, it's surely a bit smarter to look at the long view.
Sunday Indo Business