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Post-Jobs: Apple Will ‘Coast, Then Decelerate’

George Colony isn't very popular with diehard fans of {complink 379|Apple Inc.} right now. Many in the electronics industry refuse to agree with Colony's long-term prognosis for the company, but you have to give the {complink 7329|Forrester Research Inc.} CEO credit for taking an unpopular stance on the world's most successful technology company.

In a blog posted on Forrester's home page on April 25, Colony laid out the business and sociological reasons why he believes Apple will “coast, and then decelerate” over the next “24 to 48 months.” This rather negative opinion, published only one day after Apple announced record profits and sales, has sparked a lot of debate on the Web. On Tuesday, Apple reported a 94 percent increase in March-quarter net profit (to $11.6 billion from $6 billion) and revenue of $39.2 billion, compared with $24.7 billion in the year-ago quarter.

Just to be clear, I agree with Colony's conclusion. In fact, if there are any areas where I don't exactly see eye-to-eye with the Forrester boss, it would be that Jobs's death isn't the only trigger that I believe would result in slower growth for Apple eventually. Neither of us is saying Apple will decline or stop growing, but the current pace of expansion is not sustainable.

Apple's revenue more than doubled to $108 billion at the end of fiscal 2011 from $37.5 billion in fiscal 2008. The company's current growth rate, if maintained, will push Apple's annual revenue pass the $200 billion mark by fiscal 2013 or even earlier. Where will it go from here? I know many people in the industry believe Apple is infallible, but even if Jobs was alive, the company was bound to hit a wall eventually.

Forrester's Colony focused in his blog on how the departure of a charismatic leader often results in the slow decline of the organization. Jobs, the Forester analyst said, was at the core of almost everything that Apple had done in the last 10 years. Without him and the passion he ignited both within and outside the company, the enterprise was bound to slowly begin to lose momentum.

“In charismatic organizations, the magical leader must be succeeded by another charismatic — the emotional connection of all employees and (in the case of Apple) customers demand it,” Colony said.

He expanded further:

    When Steve Jobs departed, he took three things with him: 1) singular charismatic leadership that bound the company together and elicited extraordinary performance from its people; 2) the ability to take big risks, and 3) an unparalleled ability to envision and design products. Apple's momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation.

Do you agree with Colony? If you take a look at the comments on Colony's post, there are some thoughtful, high-level, and interesting viewpoints. Joe Wilcox of Betanews also makes a compelling argument. I encourage you to share your own opinions on the message board below.

50 comments on “Post-Jobs: Apple Will ‘Coast, Then Decelerate’

  1. Nemos
    April 26, 2012

    Very nice and interesting blog post. “I know many people in the industry believe Apple is infallible, but even if jobs was alive, the company was bound to hit a wall eventually.” If we accept that  aren't exist infallible people, then how it is possible to have infallible companies?

  2. elctrnx_lyf
    April 27, 2012

    I do believe Apple will decelerate and become a normal company in few years if not in few months. COnsidering the great enrgy and creativity of steve jobs is no more available to apple we would see that APple might find it difficult to grow or bring out innovative products at the same rate.

  3. jbond
    April 27, 2012

    I agree that Apple will decelerate. I think the 2-4 year range is about right. The company will continue to stay profitable, but this fast paced growth cannot continue. Apple needs a new leader to take them into the future. A leader that can help Apple innovate, instead of building off of existing products.

  4. bolaji ojo
    April 27, 2012

    The contrary argument, though, is that Apple is just beginning to expand its offerings internationally and there are many consumers globally who want the iPhone, iPad and the iPod series. Plus, Apple keeps hinting at other products it will roll out over the next years. It's possible we are the ones that don't see the “magic” of Apple!

  5. Himanshugupta
    April 27, 2012

    i am of the same opinion that such a growth pace is hard to maintain but 2-4 years is a short time. A lot will depend on the next innovative product that Apple will launch (iTV?). Apple's product have huge demand, no doubt about it and the premium prices will make sure that the company differential its product. And Bolaji, you are right that developing countries is still an uncharted territory for Apple. Apple's magic is bound to work here.

  6. prabhakar_deosthali
    April 27, 2012

    Any company which grows by virtue of the enigma of its charismatic leader has to trasnform itself into a professionally managed company someday to survive on long term basis.

    With Steve Jobs departing , the time has come sooner for Apple to do that transformation  and I am sure the second rung leadership which worked for so many years in the shadow of that big personality will find that it is capable of converting Apple from an autocratically ruled one to a mature and professional company while keeping that spirit of innovation inculcated by Steve Jobs , intact..

  7. Susan Fourtané
    April 27, 2012

    Hi, Bolaji 

    After reading your blog I went on reading Colony's post, as you suggested. He certainly presents a good argument from a valid point of view. I tend to agree with the concept of charismatic leader and charismatic company to define both Steve Jobs and Apple. There is no doubt that Apple became the company it is today thanks to the creative and innovative mind of Steve Jobs and the products resulting from that creativity and innovation, and not for any great business formula. 

    I have my doubts if Apple will continue to be the Apple we know today, or if it will evolve into a just another company. However, it is still way too soon to come to any conclusions after less than a year of Jobs' death and only two new products presented  to the market after that.  

    I agree, however, that Apple needs another charismatic leader, preferably with the same creative and innovative mind. If Apple can find that magical person, it will be remain the same company. 

    Once I told, commenting on one of your previous blogs about Apple and Jobs, that Apple would do magic if it teaches Apple's employees and executives all about Jobs' life, work and thinking. I believe if Apple would ask Steve Jobs for advice now he could say: “Study my life. My life is my message”, just as Gandhi also did, if I can make this comparison of two great minds that I admire. 

    -Susan 

  8. Barbara Jorgensen
    April 27, 2012

    I shook my head in amazement when I saw Apple's earnings. I also read the Forrester commentray, and it is a well-reasoned argument.  As much as Jobs had achieved guru status, though, the company is still about products. The momentum has to abate at some point, but you still have to give the compnay credit for execution in the post-Jobs era.

  9. Himanshugupta
    April 27, 2012

    Susan, i like your last paragraph. We can learn a lot by studying the life and struggle of great personality and how they become who they were. It is easy to follow what others did but difficut to achieve the same charisma and charm. Probably, tha's why we have no other Jobs or Gandhi.

  10. Himanshugupta
    April 27, 2012

    Susan, i like your last paragraph. We can learn a lot by studying the life and struggle of great personality and how they become who they were. It is easy to follow what others did but difficut to achieve the same charisma and charm. Probably, tha's why we have no other Jobs or Gandhi.

  11. Houngbo_Hospice
    April 27, 2012

    I also agree that Apple's growth will not be forever. But my question is whether this will be because of the lack of a charismatic leadership or just because of the market shift that will be inevitable (we all expect that another company will come up with better products to counter Apple's hegemony)? Either way, the company had better listen to the warning and take a paliative action.

  12. Houngbo_Hospice
    April 27, 2012

    @SF,

    There is a truth in what you said about Jobs' life. He was certainly a good business leader, visionary and innovator. But the company should move forward and use the talent it has rather than waiting for another Jobs who may never come. I think that there are out there many people who can continue Jobs works. 

  13. Houngbo_Hospice
    April 27, 2012

    @Barb:

    “As much as Jobs had achieved guru status, though, the company is still about products.”

    You are right, the company's viability will depend on new and innovative products, and I am sure Apple's management understands that well. Analysts are doing their job by pointing out factors that could weaken the company, but Apple new and future leaders don't need to achieve a guru status to run the company.

  14. ITempire
    April 28, 2012

    @ Prabharkar

    To extend your point of view, I find both possibilities present. One being the one talked about over here i.e. the slow downfall of Apple Inc in post-Jobs era. The other not being thought is that may be Apple might perform better after Jobs. May be there are factors which Jobs was missing in order to lead a corporation. I am not talking about innovation and product development; Jobs was best at it. I am talking about investor relations etc in which analysts used to criticize Jobs. With Tim Cook running the show and making improvements on that part, may be Apple Inc is up in the running for longer term leadership.

  15. ITempire
    April 28, 2012

    @ Susan 

    The essential characteristic of a successful 'organization' is that it doesnt depend on individuals. Then why is CEO important. I look at CEO's as an outer image of the organization and its spokesperson. When there are too many minds who think effectively about product improvement and R&D in an organization besides CEO, the organization is bound to succeed even if there was no CEO at all. Its a team effort. Not to undermine the charisma of founder though.

  16. Susan Fourtané
    April 28, 2012

    Thanks, Himanshugupta.

    That's right; studying the life of a great personality, and by this I mean someone who accomplished more than what is normaly accomplished by means than are not common, we can not only learn a lot about how and why they became who they were, but also we can get inspired and motivated to follow the example of the ones we believe did something good and we admire for what they did, and most importantly, for how they did it.   

    Given that there are seven basic leadership styles, I believe Steve Jobs was a mix of charismatic and transformational leader, and Gandhi a mix of transformational and servant leader.

    The transformational leader inspires his followers, creating a comfortable and friendly atmosphere, whereas being a good listener making others feel they have a voice is a characteristic of the charismatic leader; and a servant leader feels he needs to serve and guide by example rather than forcing his followers to do what he wants taking care of the needs of the followers first, rather than his own. 

    One of the principles I most admire from Gandhi is Satyagraha, or firmness in Truth, as it is translated from the Sanskrit. When I look at a leader, I try to find this principle that I consider fundamental.

    -Susan  

  17. Susan Fourtané
    April 28, 2012

    Thanks, HH. 

    Yes, the company should move forward, but what if the talent of the company meant Steve Jobs? I didn't mean to say that Apple has to wait for another Steve Jobs, on the contrary, the company needs to work fast in finding the way to keep Jobs' talent working for Apple.

    I am pretty sure there are at least a few people at Apple who were Jobs' disciples and could continue his work, just like in the old days when there was a great master and his disciples followed his teachings and examples. 

    Apple needs to deliver the same quality of innovative products without having Jobs guiding its moves. If the company manages to do this Apple will keep its position, and will not decelerate. 

    -Susan 

  18. _hm
    April 28, 2012

    It is like fashion trend to predict fallacy and eagerly await that it will happen so. But Murphy's law make it other way. No one predicted 2008 crash!

    Apple may keep mum, busy in developing new product (Apple TV?). With this, Apple may have few more prime years. But it is nascent to make one's chimerical dreams as fallacy.

    I do not agree.

  19. bolaji ojo
    April 28, 2012

    None of us should underestimate the guru factor. Products are important but take another look at the smartphones, tablet PCs and digital music players in the market and tell me why Apple outshines them all. The Apple mystique is one explanation and that mystique was wrapped around Steve Jobs. We shouldn't ignore this fact.

  20. bolaji ojo
    April 28, 2012

    Yes, Apple is keeping mum about the products it is developing but I wonder what groundbreaking product the company has in reality rolled out in the last 10 years. The digital music player already existed and so did smartphones and tablet PCs long before Apple broke into the sector. It won for various reasons, including the fact rivals were not innovative in product design and ease of use. Please let me know what new markets it plans to go into.

  21. Houngbo_Hospice
    April 28, 2012

    @WaqasAltaf:

    “The other not being thought is that may be Apple might perform better after Jobs.”

    The new management team knows well that they are bound to succeed. That is the least the market can expect from them. It will not be simple as we can all notice (Jobs' shadow hanging over the company), but not impossible.

  22. Houngbo_Hospice
    April 28, 2012

    @Bolaji

    The guru factor does count, you are right. But I still believe that the success of a company like Apple does not depend on just one man. I bought my Apple devices because they are good products, and am certain that is the same thing with many other users.

  23. Houngbo_Hospice
    April 28, 2012

    Hi SF:

    I am pretty sure there are at least a few people at Apple who were Jobs' disciples and could continue his work.

    That is what I think as well. But supposed that Apple`s revenues dropped in a few years (This will likely happen because competitiors are working hard to dethrone Apple), are we going to relate that to the guru factor?  

  24. bolaji ojo
    April 28, 2012

    It can't all be because of the guru factor. I just think it shouldn't be underestimated. And, don't for an instance think Apple is not vulnerable. It was vulnerable while Jobs was alive and it is now. But it is also a company with a lot yet to offer and its rivals will keep chasing it for a while longer but you can be sure they'll catch up.

  25. bolaji ojo
    April 28, 2012

    Susan, Looking back five years that was when some folks started reviewing Nokia's position and began raising some doubts about its operations. At the time, though, Nokia's management assumed the company was still on top of the world and didn't listen. Soon it was too late. I don't think Apple is unaware of the criticisms against the company. I just hope they are listening better, sifting through and taking steps to avoid hubris. It would be a shame for another one to bite the dust so quickly.

  26. _hm
    April 28, 2012

    @Bolaji: I agree Apple is not that innovative. But they know customer need and provides very suitable solution. For most successful person or organization, you do not have to be most innovative. Many other aspect of carry equaly high importance.

     

  27. Taimoor Zubar
    April 29, 2012

    I agree. Despite how good your products may be, you need a charismatic leader like Steve Jobs to execute the plan and deliver them to people. In Apple's case Jobs played an indispensable role in bringing Apple to where it is right now. I think Apple needs another charismatic leader like him. I don't the current CEO (Tim Cook) is gaining that much popularity amongst Apple's fans.

  28. Taimoor Zubar
    April 29, 2012

    I bought my Apple devices because they are good products, and am certain that is the same thing with many other users.”

    @Hospice: I am not sure if I agree with this. Yes, product quality is one factor, but for a large number of users this isn't the only factor. In the case of Apple, it's the “cool” factor that makes many users buy Apple's products just because it has become a status symbol to own an iPhone or iPad. I am not denying the quality factor but not everyone makes rational and informed buying decisions.

  29. ITempire
    April 29, 2012

    @ taimoor

      I don't the current CEO (Tim Cook) is gaining that much popularity amongst Apple's fans.”

    If you compare popularity of Tim Cook with that of Jobs  among fans who are common users, then there is no comparison nor its fair to compare a newly appointed man with the founder. But from investor relations perspective, the investor community has been fairly satisfied with Tim Cook while they werent with Jobs.

     

  30. Susan Fourtané
    April 29, 2012

    WaqasAltaf,

    Unfortunately, I belive you are wrong. 🙁 Do have a successful case study to prove that an organization that has no CEO is completely successful?

    As a comparison, I imagine a body with no brain, in which case the body can survive for a relatively short period of time, but has no long-term future other than dying. (There is a medical case about this; a baby who was born with no brain and survived for a year or two)  

    As Stever Robbins says, “It takes more than attitude to lead a stellar organization“. However, he refers to a CEO, and the importance of the role of the CEO. 

    -Susan


  31. prabhakar_deosthali
    April 29, 2012

     
    WaqasAltaf

    I agree.

    I believe a lot of people working under Steve Jobs did not like his way of running the organization , his autocratic style of running the organization and sometimes his whimsical attitude.  But Steve was so passionate about his work that the opinions of such disgruntled people were far outweighed by the people supporting his style of working.

    May be after the departure of Steve, there will be more professionalism and more democracy in decision making in the Apple management and that will work in a psotive way for Apple to sustain on a long term basis as the top company in consumer electronics.

  32. Susan Fourtané
    April 29, 2012

    Ahh, HH, great minds think alike! 🙂 

    “But supposed that Apple`s revenues dropped in a few years (This will likely happen because competitiors are working hard to dethrone Apple), are we going to relate that to the guru factor?”  

    That's a very good question. However, the competitors are not close enough to producing products that could seriously compete with Apple's products. Or, do you have one in mind close enough that could represent a threat in the near future? I just can't think of any, not even a Nokia Windows 8 future tablet at the moment.

    The only reason why Apple's revenues might drop would be if its products lack the same quality and innovation that we are accustom to having. 

    -Susan 

  33. ITempire
    April 29, 2012

    @ Prabharkar 

    Thanks for agreeing.

    However, no matter what we discuss on forums, Mr. Jobs did enough to proof that he had enough of what it takes to take an organization to the pole position. He proved it and Apple and Tim Cook have to prove it. Within 2-3 years, we will be able to have a clear picture as to whether Apple was great with Steve Jobs or is also great without Steve Jobs.

  34. Susan Fourtané
    April 29, 2012

    Hi, Bolaji 

    That's a good point. Again, it seems like the leadership style of the CEO or the change of the CEO is crucial for the performance of the company, either Nokia or Apple. 

    -Susan 

  35. FLYINGSCOT
    April 30, 2012

    I don't believe it takes a great visionary to realise Apple cannot sustain its performance.  If it did it would own the whole world in a few years.  What's after that …… the universe?

  36. Anna Young
    April 30, 2012

    Great post Bolaji and interesting  comments from EBN readers.

    George Colony's analysis of the business and sociological position of Apple in my view is correct. It is true that Apple's succession requires “likes for likes” after Steve Jobs departure (being a charismatic leader). Unfortunately this wasn't so. Far from implying that Tim Cook  is not a great man with great vision for Apple, at least after Steve's death the company has gone on to and still raking millions in revenue. It is generally the norm when a charismatic leader steps down to replace with similar personality traits. In addition to this, like any other successful organisation, there'll come a time when growth eases, due to a number of reasons. I believe Apple is heading towards this direction too. Apple is not breaking new grounds in terms of innovation. Undoubtedly the company has achieved a great deal by producing products based on its customer's needs and demands. Combined with Steve Jobs outstanding charisma, it's brought Apple success and the company is basking in that glory today. Hence, I support the view that the company “will coast and decelerate “. I equally agree with you Bolaji that “the current pace of expansion is not sustainable” With time, Apple will decelerate.

  37. bolaji ojo
    April 30, 2012

    WaqasAltaf, Thanks for refocusing the argument. Steve Jobs did a fantastic job reigniting growth at Apple. Now that he is gone it's up to the Timothy Cook management to take the company to another level. Jobs wasn't given a great company to manage. He created it. They have a great company and now it's up to them to take it to another level.

  38. bolaji ojo
    April 30, 2012

    FlyingScot, The valuation notes on the company from the investment professionals seem to imply the stock is headed for the moon!

  39. Anna Young
    April 30, 2012

    @WaqasAltaf, You're absolutely right. It's not right to compare Tim Cook's popularity with that of Steve Jobs' These are two different people with different views and business outlook. Yes investors are likely to lean more towards Tim Cook's as he's brought the company more profits well after Steve jobs' depature.

     

  40. ITempire
    April 30, 2012

    @ Anna

    Investors are also happy from Tim Cook because he interacts with them frequently. He sees them as people important to Apple Inc. In case of Steve Jobs, he was a guy from focused on innovation and internal organization affairs and saw investors as people not so desirable and interacting to them was a burden to him.

  41. Anna Young
    April 30, 2012

    You're right; I understand Tim Cook has a strong operational leadership quality which sets him apart. He needed to bring something different anyway otherwise his time may have been short lived had he not.. I am equally aware of the restructuring he has tirelessly implemented after  his ascension almost making it clear that Apple should not be about one man alone etc. All of his changes matters obviously which was not of interest to Steve Jobs during his term.  I support Tim Cook's method, it is important to acknowledge and appreciate your staff by boosting their morale. Having said that I think Steve has done his job, built the company to the current level. Apple may not have that edge it once had under Steve – fine, its not the end of the world. It does not mean it can't still successfully remain strong with proper leadership and management style for the future…

  42. bolaji ojo
    April 30, 2012

    WaqasAltaf, I don't believe Steve Jobs' lesser interraction with investors hurt the company's stock price. It's more a question of differences in the individual's characters. I agree with your point about Timothy Cook, though, and think it refreshing that he has tried to be himself rather than cast himself in Steve Jobs' mold.

  43. bolaji ojo
    April 30, 2012

    Anna, The point of the Forrester article was that of the differences in the characteristics of the two CEOs. One — Jobs — is seen as a highly charismatic individual while the other — Cook — is seen as a pragmatic manager. I don't believe it is unfair to compare them. I think it's fine as long as we understand that the differences benefit Apple.

  44. ITempire
    April 30, 2012

    @ Bolaji

    'I don't believe Steve Jobs' lesser interraction with investors hurt the company's stock price'

    Your point has forced me to ponder over my statement. Investors might be dissatisfied with Jobs' interaction policy but when it comes to buying shares, they may behave rationally. However, one fact is that this year Apple announced the largest dividend payout in its history and also that the price of its stocks have soared 80% up since last year. This shows a lot of confidence in its new leadership.

  45. Anna Young
    April 30, 2012

    Absolutely and I understand that. I'm only emphasising that each CEO's  style yielded unique results ….

  46. bolaji ojo
    April 30, 2012

    WaqasAltaf, You noted one of the differences between the Cook-led Apple management and the Steve Jobs-led team. Jobs didn't believe in dividends payment while Cook (it seems) believes shareholders should have the profits made by the company. This may be a single difference but it also points to a set of wider differences.

    Yes, Apple's stock price has increased markedly since Cook took over but it has also begun sliding over the last few weeks. Today, it fell more than 3 percent. This may not be related at all to management strategy or character differences or if Jobs had charisma that overwhelmed the market but it is in line with the hypothesis of Forrester that Apple will not grow in future as it had in the past.

  47. ITempire
    April 30, 2012

    True Bolaji. Last year performance may not necessarily reflect the long term viability of the company. This remains to be seen and within 2-3 years, a clearer picture will be out for us. With Android doing best it can and Windows trying to make a comeback, Apple will need to ensure that it has all its weaknesses covered in the short run.

  48. t.alex
    May 1, 2012

    Apple's innovations did not all purely come from Jobs, but from the engineers behind it. A leader is important in this case to bring out the best from his people. 

  49. bolaji ojo
    May 1, 2012

    Jobs did more than lead. He motivated and often put down employees who didn't rise to the level he sets for them. Whether these actions helped propel Apple higher cannot be determined but they have become a part of the company's history. Can a new leader ever reproduce the effects Jobs had on his staff and consumers? Probably not. But Cook is having his own effects.

  50. t.alex
    May 2, 2012

    The one thing that is often mentioned most about Jobs is his drive and passion for great product, and not for profit (money will come along in the long run). This is one factor that really motivate his people. Hardly do we find any boss that do not focus much on profit/cost.

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