Apple! Charts! Apple charts!
Some remarkable charts on Apple this fine morning. First, via Philip Elmer-DeWitt we learn that the electronics industry in the US sucked wind in 2011.
Except for Apple:
Where would U.S. consumer electronics be without Apple? Down 6% in 2011, that's where, according to the NPD Group.
Sales of PCs, TVs and video game hardware were all down, and sales of mobile phone hardly grew at all. Only tablets experienced robust growth -- accounting for 10.7% of U.S. consumer electronic sales, up from 5.1% in 2010. And because nearly all those tablets were iPads --and a lot of those mobiles phones were iPhones -- Apple (AAPL) single-handedly saved the industry from what would have otherwise been, according to NPD, a humiliating 6% decline.
Quality matters. Quality coupled with a strong, efficient global supply chain matters still more. I believe Macs are superior -- dollar for dollar -- to Windows-based machines.
But I understand others who might dispute this. Fair enough.
However, with the iPod, then the iPhone, then the iPad, Apple created devices that had no link to the past -- there was no attempt to force iPad and Mac to work in concert the way Microsoft has tried to force its mythical tablets work with Windows/Office/PC -- yet which also so utterly revealed their superiority to all that came before them as to make those prior creations obsolete.
When you make everything else obsolete, your product owns the market. And it can take years and years for everyone else to catch up.
Give the makers of Android phones and tablets credit. While their devices may not be the equal of Apple's, they were smart enough to make them look and feel as damn close to Apple as they could, as quickly as they could. Unlike with the iPod, for example, where competitors spent years trying to create an alternate -- which always failed.
Of course, this hasn't helped them much when it comes to income.
Asymco compares Apple with Google and Microsoft. We know how this story ends up, though it's impressive nonetheless to see it once more:
Google and Microsoft have grown but not by adding new sources of revenue. Apple grew its base but, more importantly, added new businesses for spectacularly more growth.
Google’s advertising profits have overtaken Windows as has the iPhone and the iPad may do so quite soon.
I wonder if Steve Jobs, himself, could have possibly predicted that iPhone would overtake Windows -- in profits? Or, iPad!
I can't say, however, that I agree with his conclusion: that Apple is the world's biggest start-up.
My presentation showed, using these graphs, Apple’s growth characterizes it as a “startup”. The growth did not come from a broadening of its core products markets. It came from the creation of new product categories. Google, a much younger company does not exhibit this non-secular growth any more than Microsoft which is about as old as Apple is.
New product categories? Perhaps.
Though, there were MP3 players pre-iPod. Apple just marginalized them with a superior product.
Smartphones and more advanced feature phones were clearly growing in popularity and importance. As more carried a mobile phone, fewer were likely to carry a mobile phone *and* an iPod/MP3 player. Thus, Apple first tried to incorporate iPod into a Motorola ROKR phone. That failed, but from the effort we got iPhone.
Which led to iPad.
These are all mobile computing devices. And product categories that actually existed prior to Apple's entry. It's just that Apple's were so superior as to render the competition obsolete.
And this is the Apple story -- and the Steve Jobs story -- that I believe is almost always overlooked. There's this persistent notion that Jobs used his magic touch and suddenly we had something new and revolutionary and amazing -- and magical.
This diminishes the long, hard work of Jobs, his executive team and Apple staffers.
A good part of why the iPad dominates the tablet market is because the company has done the hard work of optimizing their supply chain.
Apple spent years developing iTunes, its payments platform, recommendations platform, distribution platform. This begat App Store (and Mac Store). All of which took years of hard work.
The company spent years learning how best to integrate hardware and software. They learned first-hand what truly mattered -- seemingly 'minor' issues like battery life -- and what did not, such as "an open platform". Or, Flash.
I view Apple as exactly the opposite of a start-up.
There is almost no rapid market entry. There is extremely little they do that requires multiple product/service iterations -- in public. They rarely pre-announce (or deny). They do not seek to rapidly grow their top-line at the expense of profit. They do not expand or contract staffing based on the latest quarter's numbers.