Eric S. Raymond looks at the hard road ahead for Apple without Steve Jobs:
I’ve said before that I think Apple looks just like sustaining incumbents often do just before they undergo catastrophic disruption from below and their market share falls off a cliff. Google’s entire game plan has been aimed squarely at producing disruption from below, and with market share at 40% or above and Android’s brand looking extremely strong it is undeniable that they have executed on that plan extremely well. The near-term threat of an Apple market-share collapse to the 10% range or even lower is, in my judgment, quite significant — and comScore’s latest figures whisper that we may have reached a tipping point this month.
For Apple, the history of technology disruptions from below tells us that there is only one recovery path from this situation. Before the Android army cannibalizes Apple’s business, Apple must cannibalize its own business with a low-cost iPhone that can get down in the muck and compete with cheap Android phones on price. Likewise in tablets, though Apple might have six months’ more grace there.
Of course, this choice would mean that Apple has to take a massive hit to its margins. Which is the perennial problem in heading off a disruption from below before it happens; it is brutally difficult to convince your investors and your own executives that the record quarterlies won’t just keep coming, especially when your own marketing has been so persuasive about the specialness of the company and its leading position in the industry. This is a failure mode that, as Clayton Christensen has documented, routinely crashes large and well-run companies at the apparent peak of their success.
Does Tim Cook have the vision and the will to make this difficult transition happen? Nobody knows. But the odds are against it.
