Bad Assumptions

Ben Thompson, Stratechery:

And yet, the perception that Apple is somehow hanging on by the skin of their teeth persists. I was speaking to someone about Apple’s particularly excellent China results this afternoon, and was struck at how their questions were so focused on threats to Apple – “How will Apple respond to Xiaomi” for example. This is in stark contrast to the way most think about a company like Google, where their dominance in whatever field they choose to enter is assumed, just as Microsoft’s was a decade ago. Apple, though, is always a step away from catastrophe.

It’s difficult to overstate just how absurd this is, but here’s my best attempt: last quarter Apple’s revenue was downright decimated by the strengthening U.S. dollar; currency fluctuations reduced Apple’s revenue by 5% – a cool $3.73 billion dollars. That, though, is more than Google made in profit last quarter ($2.83 billion). Apple lost more money to currency fluctuations than Google makes in a quarter. And yet it’s Google that is feared, and Apple that is feared for.

Apple lost more money purely in currency fluctuations than Google made last quarter, period. That's staggering.

It's difficult to explain the continuous, persistent, negativity that surrounds Apple in the form of technology commentators. Certainly I think a lot of it has to do with the fact that first impressions are tough to shake off and a lot of people's first impressions of Apple were formed in the 90s when the company was an ineffectual and wasteful dinosaur, seemingly incapable of forming a cohesive strategy. John Gruber of Daring Fireball has talked about this a few times and it's an astute observation, but I can't help thinking there's more at play here.

In the world of "build 'em up and knock 'em down" journalism, Apple has become a problem, defying the odds and overstaying it's welcome at the top, not playing along to the pre-prepared narrative. By any conceivable, useful metric, Apple is destroying it's competitors with it's focus on high-end devices, relentless iteration, and attention to detail. But that's not what the press wants, they want to see two or three big guys battling it out, that makes for a good journalistic landscape – it always has. Left vs Right, The Beatles vs The Stones, Oasis vs Blur, Christianity vs Islam, it has always been this way. But when it comes to Apple, who can you pit them against? There isn't anyone. Microsoft is reeling, Google only seriously competes with Apple in mobile platforms, there's little overlap with Facebook and Amazon. Dell's gone private, Lenovo are focussed on the enterprise, BlackBerry is a laughing stock... The only real narrative to play out right now is iOS vs Android, which is why it's such an area of intense interest for the press.

I'd like to think there were other companies out there seriously pushing Apple, really fighting with them and holding their own, it would be better for everyone. But I'm not prepared to suspend reality and write nonsense in some vainglorious, egotistical attempt to think that nonsense will really affect Apple in any meaningful way. Journalists are trying to do the job of knocking Apple off their perch, when it should be their competitors doing it – that's the sad reality that we're left with.