Apple and Facebook's Inevitable Failure

[Guest fountainhall]

Remember AOL? The one-time internet darling actually had the audacity to takeover one of the oldest, most established and far larger media companies back in 2000, Time-Warner. Perhaps it’s more accurate to say Time-Warner willed all that to happen. Whatever, that little escapade was hailed at the time as a vision of the future. It died pretty quickly when shares in the merged company tanked. More than tanked, in fact. As the New York Times pointed out, it “essentially vaporized $200 billion of shareholder money.”

At the time of the merger, its architect, Gerry Levin of Time-Warner, was arguably the most powerful media executive in the world. Levin seemed to love power.
 

 

“I had the arrogance of power. The ability to do things, to fly anywhere, and whether I was being written about positively or negatively, it didn’t matter because I was always written about. That suffuses into your identity.”

Ten years after the disaster, Levin called it “the worst deal of the century”, adding, “and it’s my fault. I’m sorry.”
 

 

“No one has ever left a company more disliked than he was,” (the head of HBO) tells me. “He didn’t have one friend in the company. Or one friend outside the company. Nor has anyone left such a powerful company in worse shape. He killed everyone in the way of keeping or getting his job. We called him Caligula.”

 

Levin now has a new wife and a new life as the presiding director of a holistic healing institute.

http://nymag.com/news/features/34454/

These thoughts surfaced when reading The Observer this morning. An article headed -

Why the Facebook and Apple empires are bound to fail

- predicts that Apple and Facebook will ultimately fail, that they have no place to go but down. He draws comparisons with the arguments laid out in economist Paul Kennedy’s book “The Rise and Fall of the Great Powers” – an excellent and perceptive read about the correlation between overextended military might overseas and the inability of an overburdened tax system at home to maintain the economic power necessary to sustain it.

Just as the Empires of old inevitably failed, so too will Apple and Facebook. Look at Microsoft, the author suggests. The once dominant tech company is now an ailing giant, “profitable but no longer innovative, trying (and so far failing) to get a foothold in the post-PVC mobile, cloud-based world.”

Apple and Facebook are different creatures and so the timing and causes of their decline will differ.
 

 

Apple's current strength is that it actually makes things that people are desperate to buy and on which the company makes huge margins. The inexorable logic of the hardware business is that those margins will decline as the competition increases, so Apple will become less profitable over the longer term. What will determine its future is whether it can come up with new, market-creating products such as the iPod, iPhone and iPad.

 

Facebook, on the other hand, makes nothing. It just provides an online service that, for the moment, people seem to value. But in order to make money out of those users and satisfy the denizens of Wall Street, it has to become ever more intrusive and manipulative. It's condemned, in other words, to intrusive overstretch. Which is why, in the end, it will become a footnote in the history of the internet.

http://www.guardian.co.uk/technology/2013/jan/27/facebook-apple-only-way-is-down

[Guest]

No company has ever sustained a long term position at the top of the consumer electronics market.

 

Right now, despite having fine products, Sony and Panasonic are losing billions. They have well and truly lost out in the mobile phones market. Even in Japan, all the young professionals are now mainly using Apple & Samsung phones.

Last time I looked, Apple was worth more than Sony, Panasonic, NEC plus a couple of other major Japanese brands put together. At that time, Apple could have bought Sony and Panasonic with the net cash on their books.

Will Apple still be in the same position in 20 years time? Very unlikely. Samsung already have a very fine range of phones, including high end products and they offer the consumer more options regarding product size etc.

 

As for Microsoft, well some of the netbook and lower end PC sales are probably being lost to tablets, which run Android or Apple software. I figure there's a limit to how far that trend can go, as writing long documents can be a real pain on a tablet. So there will always be a market for PCs.

Right now, Microsoft have a virtual monopoly on PC operating systems. A few percent buy Apple products and a very small percentage run Linux.

For Microsoft to collapse, it would probably need Google or Apple to attack the volume PC operating system & Office software market. No signs of that just yet, but maybe Google might try it sometime.

Of course, Microsoft are weakening their position by launching less reliable and less friendly operating systems. I've had numerous problems with Windows 7 not installing updates, then not installing new software. XP used to just work. Maybe Mr Gates needs to do a Steve Jobs and return to sort out the company.

[Guest anonone]

I do not follow the electronics or software industry.  Anecdotally, I am hearing many complaints about Apple lately, especially about the iPhone 5 and the new version of iTunes.  Maybe a slight slump from which they will recover, but who knows.

 

I also believe Google has started a pretty heavy play for business customers with their applications to replace the MS Office suite.

(Google apps for business). 

[Guest timmberty]

20 years ago these companies where hardly heard of, or born. there where other far bigger fish in the sea, the companies grow and grow and grow ... everyone gets greedy whats more and more.

but things can only get to big, greed can only eat so much..

all these companies will grow until they burst, their greed will overwelm them.

life is a circle and everything has a span, we all get born, live, then die.

computer and phone companies are the same.

[Guest fountainhall]

Perhaps the title of the thread should read “Will Apple and Facebook End Up like the Blackberry?”

From a peak ownership of 22 million in the US in September 2010, the numbers are only 9 million now, this despite a near doubling of the overall market. It has lost its position as the smart phone of choice amongst high-end business people and corporations. Its servers have been down for several lengthy periods, poor battery life and camera quality have added to its woes, and very few companies are now producing apps for Blackberries. Worse still, it lost US$643 in just one quarter last year.

Research in Motion has a mountain to climb if it is to retain brand loyalty and perhaps bring back at least some of the millions of deserters to the iPhone and Android products, suggests an article in The Guardian. On Wednesday it announces two new mobiles - one with keyboard, the other touchscreen – and the new BB10 software.

The company’s chief claims -
 

 

"We have taken the time to build a platform that is future-proof for the next 10 years"

http://www.guardian.co.uk/technology/2013/jan/27/blackberry-new-smartphones-lure-lost-customers

 

Future-proof? Or one last desperate roll of the dice?

 

Photo: The Guardian