Is Apple Already Losing Its Way Without Steve Jobs?
Apr 16th 2012 8:07PM
Updated Apr 16th 2012 8:08PM
With his death, Apple no longer has the iconic leader to turn to as the absolute authority on just about anything. When Jobs was adamantly against something, it was promptly shot down and never spoken of again. If he needed something done, it would jump to the top of the priority list. Including the words "Steve request" in the subject of an internal email was a surefire way to get something accomplished.
In the six months since his passing, there are already numerous ways in which Apple has or may be about to go against Jobs' wishes. Is Apple already losing its way?
iPad mini = dead on arrival?
Rumors have persisted for ages on the possibility that Apple will release an "iPad mini," with speculation steadily increasing in recent times. Analysts have chimed in, thinking it would be a smart move to counter the rise of Amazon.com's (NAS: AMZN) 7-inch Kindle Fire as the best-selling Google (NAS: GOOG) Android tablet at the moment.
There's every reason to believe that Apple has a smaller-version iPad in its labs for testing purposes, but the most recent round of reports suggests one may actually see the light of day. Reports from the Far East are claiming that Apple is planning on building 6 million iPad minis for release later this year, targeting a price point between $249 and $299.
Such a device would be a major threat to the Kindle Fire and also represent a pre-emptive strike against tablets running Microsoft (NAS: MSFT) Windows 8 later this year.
The device will allegedly carry a 7.85-inch display, smaller than the current 9.7-inch offering, and sport a 1024 x 768 resolution. This is the same resolution of the first two iPads, which would make it easier for app compatibility.
Here's how Steve Jobs felt about 7-inch tablets:
These are among the reasons we think the current crop of 7-inch tablets are going to be DOA, dead on arrival. Their manufacturers will learn the painful lesson that their tablets are too small and increase the size next year, thereby abandoning both customers and developers who jumped on the 7-inch bandwagon with an orphan product. Sounds like lots of fun ahead.
Source: Apple fiscal Q4 2010 earnings conference call.
If Apple ends up releasing a 7.85-inch iPad, it would be in direct opposition to Jobs' embargo on such devices.
Settle with Cook
Apple's global patent war against Android has yielded little to no tangible benefits for Cupertino. Jobs hated Android so much that he vowed to go "thermonuclear" on the rival OS and was "willing to spend every penny of Apple's $40 billion in the bank" at the time to do so. Jobs had told Big G execs: "You can't pay me off. I'm here to destroy you."
Over the past few years, all of the involved companies have spent an estimated $400 million in legal fees duking it out, with little to show for it. Motorola Mobility (NYS: MMI) even beat Apple in court recently, which is why Google wants it in the first place.
Jobs' blind emotional rage against Android could have ended up detrimental to shareholders. While Jobs was presumably being hyperbolic, spending billions on a fruitless battle would have been undeniably wasteful for shareholders.
Jobs' official biographer, Walter Isaacson, recently said he believes that new CEO Tim Cook will end up settling the Android disputes, as Cook is "less emotional" than Jobs was. Bloomberg Businessweek even reported that Apple and Samsung have had discussions recently over potential settlements.
If Cook opts to settle, it would be another marked contrast to Jobs' approach.
New Apple TV
A more minor example involves the new Apple TV's interface that employs iOS-esque icons. A former Apple TV engineer said Jobs had hated the grid-like interface when it was considered five years ago and vetoed the design.
This all happened as the iPhone was taking off and before the original iPad was launched, but implementing the grid-based interface is a design element that Jobs previously shot down.
Is Apple losing its way?
Those are three examples of a potential or actual pursuit of things at Apple that Steve Jobs was specifically against. There's no doubt that Apple will see different strategic directions in various aspects of its business without him, from minor aesthetic design choices to major product and legal strategy. Here's the important part, though: Steve Jobs wasn't right about everything. He had his fair share of mistakes, including hiring John Sculley to run Apple in the '80s, leading to his ouster. He was originally against third-party apps on the iPhone, and opening it up was one of the smartest moves Apple has ever made.
A settlement with Android could even be beneficial for shareholders if it resulted in a licensing agreement that turned legal expenses into royalty income. The Kindle Fire is showing that there's a market for 7-inch tablets, and a smaller iPad would undoubtedly tap it with a vengeance.
There are plenty of ways in which the loss of Steve Jobs is an irreplaceable hole at Apple, but there are also a few in which it might actually clear the way for some contrary moves that could just pay off in the long run.
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At the time this article was published Fool contributor Evan Niu owns shares of Apple and Amazon.com, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Amazon.com, Microsoft, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Amazon.com, Apple, Google, and Microsoft and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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