Watch the iThrone

by Ryan Catalani / Beacon Staff • October 24, 2013

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Soothsayers have always seen Apple’s demise in their tea leaves.

The original Macintosh was panned by critics for being too slow, too hard to learn—it was the first consumer computer to use the graphic mouse-driven interface we’re used to today—and of course, too expensive.

The original iPod was thought to be a sure failure, a sentiment expressed best in a concise review by the still-popular technology website Slashdot: “No wireless. Less space than a Nomad [MP3 player]. Lame.”

The original iPhone was criticized for its extravagant price, lack of a keyboard, and combination of work and play functions.

And the original iPad—well, according to the commentators after its launch, who needs a tablet if you already have a smartphone and laptop?

Listening to the pundits, it might seem like Apple is perpetually skirting the precipice of failure, just one misstep away from making consumers realize that its wares aren’t really that special. So banal is today’s cycle of media reactions to Apple announcements that the commentary is easier to predict than the product itself: a quick dismissal, a grudging realization that the new gadget is not so bad, and an assertion that Apple cannot replicate this success. Wash, rinse, repeat.

The problem with these prophecies is that Apple is still very popular. Apple announced that it sold 9 million iPhone 5c and 5s models in the first three days after their launch, its most successful iPhone launch to date. Samsung, on the other hand, took nearly a month to move that many units of its latest flagship phone, the Galaxy S4. Apple says two-thirds of iPhone, iPad, and iPod owners have updated their devices to iOS 7, which just came out in September. Yet according to Google’s own data, not even half of all Android users have updated to the latest software version, Jelly Bean, which was released over 14 months ago.

Apple’s customers are happy, too. For each survey in the past five years, Apple has topped the smartphone satisfaction rankings compiled by the marketing research firm J.D. Power, while Nokia and Samsung grapple for second place. Perhaps more importantly, teenagers—tomorrow’s trendsetters, and technological gurus for their elders—still love Apple. Of teens with phones, 55 percent own iPhones, according to a study released earlier this month by the investment bank Piper Jaffray, and nearly two-thirds plan for their next phone to be an iPhone.

There are some apparently paradoxical wrinkles. Apple’s products often don’t have the highest market share—worldwide, more people buy phones made by Samsung and Nokia. And seemingly worse, offering low prices is always Apple’s last priority; its tendency to introduce new products with high costs shows that it would rather sacrifice customers than quality. This, the prophesiers say, must spell impending doom.

These critiques, though, show a misunderstanding of Apple’s core mission. It simply does not want to create products for the masses. Sure, no Apple executive would complain if everybody owned an iPhone and Macbook, but universal adoption is not crucial to the company’s definition of success. Deep within Apple’s DNA is a very different ideology, expressed succinctly in a TV ad that played this summer:

“We spend a lot of time on a few great things, until every idea we touch enhances each life it touches.”

It’s no secret: For this handful of premium products, Apple feels justified in charging premium prices, even if not everyone can afford them. This has been its formula for decades. Does this mean Apple is a luxury brand? Probably. No one at Apple seems to dispute it, anyway.

“Apple’s market share is bigger than BMW’s or Mercedes’s or Porsche’s in the automotive market,” Steve Jobs, the company’s late co-founder and former CEO, said in 2004. “What’s wrong with being BMW or Mercedes?”

And just this year, current CEO Tim Cook hired two chief executives of major fashion labels, Paul Deneve of Yves Saint Laurent and Angela Ahrendts of Burberry, to work on so-called special projects and retail, respectively. And like a luxury brand, Apple’s goal is not to have the biggest market share, but the biggest mindshare—to become a company whose products not everyone owns, but everyone wants. This, after all, makes the goods that people do buy seem even more valuable. Like Mad Men and Louis Vuitton, Apple’s products command a cultural influence that far outsizes their physical reach.

But providing a balanced perspective, and adopting the nuanced approach that not all companies have the same threshold for success, doesn’t really drive pageviews. Besides, predicting Apple’s imminent failure provides for more entertaining headlines. Most tech punditry is no better than the horse race journalism that dominates political campaign coverage—it’s a constant, exhausting battle of comparisons and poll numbers.

Apple will be okay, as it has been for over 37 years. And with more cash on hand than the gross domestic product of most countries—$145 billion as of April—the company has plenty of resources to continue releasing more products. You don’t need tea leaves to tell you what this means: Those oracular predictions of Apple’s impending collapse aren’t going away, either.