28 Jan 2015

Apple iPhone: profit but where’s the vision?

Apple’s stellar financial results speak volumes about how bosses shape companies.

While its former chief executive, the late Steve Jobs was a gadget-obsessed visionary, its current boss Tim Cook was the money man: a hard-edged negotiator who cut astute deals with mobile network operators and media companies.

(If you’re looking to renew your phone contract and wondering why the iPhone option is always more expensive, you’ve got Tim Cook to thank).

Cook’s style is reflected in today’s results: on the one hand, Apple raked in $18bn (£11.8bn) in profit in the three months to Christmas. On the other hand, it’s still struggling to come up with the next big product.

Yes, the Apple Watch is in the pipeline for release, but it’s had a lukewarm reception and doesn’t create any new source of money beyond the purchase price (unlike the iPod, iPhone and iPad, which pulled in iTunes and app revenue by the billion).

What we have under Tim Cook is a company with rock-solid accounts, but a serious case of creative drought.

And that’s a problem when you consider the threat from the likes of Xiaomi, a Chinese manufacturer promising iPhone style and performance at lower prices. Unless Apple can break into new products areas, it’s going to find its margins nibbled away at by such competitors.

That said, its cash stockpile of $178bn (£117bn) buys a lot of thinking time….

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