Bears

Gruber and the 3 Apple bears

October 10, 2013: 9:12 AM ET

An influential blogger takes on the three leadings arguments for why Apple is doomed.

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Chart from Ben Bajarin's It's Tough Competing With the iPhone

FORTUNE -- Daring Fireball's John Gruber delivered one of his increasingly rare long-form essays Wednesday, and it's a good one.

It's structured around the three leading arguments being made these days in the media and on the Street for why Apple (AAPL) is doomed. He summarizes them as follows:

  • Apple bear argument 1: Superior design doesn't matter in the long run, the mobile market will be commoditized by "good enough" competitors.
  • Apple bear argument 2: Quality matters but iOS devices have already lost their edge, and are no longer superior to competing devices from Samsung, Google, or Amazon. iOS devices just cost more.
  • Apple bear argument 3: Design doesn't matter, app developers and peripheral makers will flock to Android simply because of raw market share, even if that market share is almost entirely at the low end of the market.

Gruber wrestles the three bears one by one, drawing on recent essays by Ben Thompson (What Clayton Christensen Got Wrong), Horace Dediu ("Apple has always been priced as a company that is in a perpetual state of free-fall"), Jean-Louis Gassée (Apple Market Share: Facts and Psychology) and Ben Bajarin (It's Tough Competing With the iPhone).

The dean of Apple bloggers lands, not surprisingly, deep in Apple's corner. Drawing on the oft-cited Mac-vs.-Windows analogy, he concludes:

The irony here is that iOS vs. Android (or, if you prefer, iPhone and iPad vs. commodity smartphones and tablets) is in fact a replay Mac vs. Windows — but not in the way that most who make the comparison would have you believe. Judging by its actions, Apple is keenly aware of the lessons to be learned from 20 years ago. To wit, this has nothing to do with focusing on raw market share, and everything to do with keeping the pedal to the metal on design and quality. If Apple maintains a lead over its rivals in those regards, the Mac suggests that Apple can occupy a dominant, stable, long-term position as the profit leader in the mobile market as well — a market that is already bigger than the PC market ever was, and unlike the PC market, is still growing.

For anyone concerned that Apple might in fact be doomed, it's a must read.

Link: Daring Fireball: Design Quality and Customer Delight as Sustainable Advantages.

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