» Apple: falling from grace or rising to greatness?

Boy Genius Report has taken an interesting two-sided stance following the announcement of Apple’s iPhone 4S. One side contends that Apple is falling out of favor with both consumers and investors while the other believes that Apple has truly hit another home run.

Generally, I agree with the “rise to greatness” sentiment. In fact, one particular point that sticks out being that Macs do not receive an annual design refresh and there is no reason to expect the iPhone will be any different. I hadn’t really taken this into consideration and being that the iPhone 3GS did not include a design refresh, it makes sense that the fifth generation iPhone  would also not include a design refresh.

However, the “fall from grace” opinion is where I start to take issue. For example, Zach Epstein for BGR writes:

Apple was a company that could do no wrong. Phones that dropped every other call…

Any issue with calls dropping has more to do with the carrier that you are forced to use than with the actual phone itself. I’ve heard no complaints of such issues with Verizon users where call quality is far above what AT&T is able to deliver.

Location tracking scandals… Antennagate… A week or even a day later, all was forgiven and Apple would continue on its path.

Both of these scandals were only forgiven once Apple collected all of the facts concerning the issue that was reported after which Apple issued a statement that instilled confidence in consumers and investors. Both of these scandals were, in this writer’s opinion, blown out of proportion and were only so explosive due to Apple’s media attraction. Apple is likely the most scrutinized company in consumer electronics and if there was still a problem, you can be certain that the internet would be ablaze with page view-driving link bait.

The piece has several other points that are just as senseless, read on for my take…

[On Tuesday] the company’s iconic co-founder was nowhere to be found.

Apparently Zach did not receive the memo that Steve Jobs is no longer the CEO  at Apple. It makes complete sense that Tim Cook was in the spotlight because any other scenario would have painted a picture of Apple’s board lacking confidence in the new CEO. I’d wager all my shares of AAPL that Steve Jobs was not very far away from the event, but it would have been a mistake to put him on the stage.

Yes, investors were seemingly disappointed by Tuesday’s announcements…

If investors were disappointed by Tuesday’s announcements, then that would signal a sell-off of AAPL shares. Or so you’d think…

That Apple only closed down half a percent on Tuesday exhibits confidence in the company’s management, strategy and portfolio more than it does disappointment in the iPhone 4S.

In other words, investor’s are confident in Tim Cook’s leadership (sans Steve Jobs) and the company’s overall strategy (of which the iPhone makes up a staggering portion) and this outweighs the steaming pile of crap that Apple announced yesterday. Did I get that right?

Zach continues to quote several other analysts with admittedly tepid reactions but none go as far to say that Apple is another minute closer to midnight. He goes on to point out that several analysts are unfaltering in their belief in Apple’s strategy and agree with Apple’s plan to continue to sell the 3GS at a carrier-subsidized price of $0.00.

But an interesting takeaway from yesterday’s announcement may simply be that Apple has fallen from grace in some respects. Apple is fallible, even if the 4S ends up being a success.

John Gruber’s response exactly mirrors my own reaction: “So even if it’s a success, it’s a fall from grace?” In what world does that even make sense? I guess that’s one way to guarantee you’re right, by ignoring all evidence to the contrary.

There were skeptics after Apple unveiled the iPhone in 2007, and after the iPhones 3G, 3GS and 4 as well.

And they were all wrong. The iPhone 4 has become the most popular phone in the world. Not only that, but the 3GS (which like the 4S did not include a design refresh) is currently sitting at the #2 spot. That’s right, the iPhone 3GS is not only two and a quarter years old, it features a hardware design that is three and a quarter years old. Somehow, that hasn’t stopped it from nearly dominating the market.

Naysayers said Apple couldn’t cut it selling just one or two smartphone models, and now Apple owns two-thirds of global smartphone industry profits. Led by Apple’s gray-haired iPhone 4, which launched in June 2010, Apple sold more smartphones last quarter than any other vendor on the planet.

If the leader-of-the-pack iPhone 4 is “gray-haired,” I’d be curious to know what Zach thinks of the iPhone 3GS. Tell me, what other phones came out in 2008 that still look as good today as the 3GS. Further, what else was released in 2009 that is still for sale and comes even close to competing with the success of the 3GS? I’m pretty sure there was some sort of HTC Galaxy Slider One or something that was released, but I can’t remember what it was called and I certainly don’t see them being used by anyone.

The numbers will do the talking over the next few quarters, and I expect Apple’s iPhone sales to continue on the same skyward path right up to next year’s iPhone 5 launch and beyond.

Apple, who has fallen from grace and has investors questioning whether they have lost it is still going to dominate the rest of the industry? It seems like Zach changed his mind half-way through writing this piece of garbage. Either that or he simply never believed what he was writing in the first place, which I have a hard time accepting given the strong language used throughout the piece.

Zach ends the piece thusly:

Apple may have fallen from grace in a way, but until competitors can even come close to approaching the allure surrounding Apple devices and the user experiences they afford, don’t expect the company’s grip on the industry to loosen at all.

Again, Apple has fallen from grace, yet for some reason it doesn’t matter because their competitors are still lagging and we can expect Apple to maintain dominance in the industry.

Was I disappointed that Tuesday’s announcement didn’t include a design refresh? Absolutely. Do I think it matters even slightly? Not even a little bit.

 

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