Verble Gherulous


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Is the Apple business model sustainable?

Apple stockis currently over $600 a share, and some analysts say it can't stay that high and others say it's possible to break $1000 a share if it really cracks that China market. But I'm concerned that the business model, not just for this company but others as well, is unsustainable. The model is this constant push to come out with new bells and whistles. You buy one Apple product and it's already obsolete before you walk out the store. Is it possible that eventually the consumer will become tired of the need for constant upgrades and want some tech that does not have this built-in obsolescence?

What do you think?

  • Apr 20 2012: But the obsolescence is a problem with computers and electronics all around. Not just apple's.
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      Apr 20 2012: Sad. But true. I guess the only thing that does not face obsolescence is our desire for newer tech!
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    Apr 19 2012: Hi! As an armchair tech trend watcher, it seems to me that, as Salim S pointed out, the market is asking for reasons to upgrade. Apple is simply meeting a need. Sustainable? I'm not sure Apple cares, as long as as many people as possible become reliant on their devices for acquiring and viewing mass media content, music, cloud based content, etc, etc. ...sold to them by, guess who?
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      Apr 19 2012: Very nicely put, however, several articles I read a few years ago suggested that the real genius of Mr. Jobs was making products that the public didn't even know they wanted. Apple created most of the markets that it dominates. But now that they have mad wpeoe reliant on their devices, just as Microaoft made people via business reliant on their OS, I wonder if even Apple will be able to keep up with the pace that it has set for itself.
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    Apr 18 2012: Sustainability of organisation as a whole is more important than that of it's business model.

    Sustainable organisation successfully changes it's busniess model according changing market/customer/consumer need /demand/,motive/desire....

    After some lag period apple itself did that in past

    The other point mentioned about.....short life cycle of apple products......with current trend of consumers' demand who don't seem care much about sustainability of a product they buy ... sothat's the right startegy for time being....moreover innovantion is not able to immediately capture the whole first it only captures 2-3% innovative customers only , while rest still sticks to the past product/s......
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    Apr 18 2012: as long as we have the moore's law going, we do want regular updates.

    (even if i use a 11 years old nokia 3310)
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    Apr 18 2012: The business model is sustainable, if the world doesn't change. Their shares can half within the course of a week if China/Taiwan stops turning a blind eye to how they treat their employers. If they do break through in China this will undoubtedly happen, or apple has to a way to cooperate in China's Big Brother campaign without the rest of the western world knowing. Like it tried to do with Google.

    Or they will have to start production in Africa, but last time I checked the continent was overwhelmed by human rights reporters.
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    Apr 24 2012: I don't think appealing to the short attention span, and moneywasting millenials is really an issue for them... I think that's sustainable marketing... but, I do think the model is insolvent, because it's not creating jobs with the necessary consumer demand to keep itself alive. Until everyone making tv's and computers, can afford to buy them, their model is impossible to sustain. So are almost all consumer electronics models at the moment though, so they are a bit unfairly attacked simply because they are the biggest.
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    Apr 20 2012: The thing is is to look around at what is offered when you are shopping for new replacement tech and that means getting down to the nitty gritty of the design,once you realize that the tech that is sold to you is all third party and that other vendors are selling the same design with the same tech in it you sit back and start laughing.

    That Ipad2 will last you ten years.My desktop will last me 5 if i'm lucky but it's power requirements is starting to make me rethink whether it's worth holding onto to the old buick.
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    Apr 20 2012: Apple is not a business model - is a profit model.

    If you brought the first Apple phone, the Iphone1 you noticed how crap the camera is. At that time, a 5mp camera was common on some cheap phones.

    You also noticed that only after updating your phone 4 times you got a decent camera on the Apple Iphone4 - after paying aprox. 1600 dollars to Apple.

    This is slow realising of technology and for now Apple was successful using it. Slowly realising technology and making your customers to pay for any small update like memory (witch becomes more and more cheaper) it shows the way Apple (or people behind Apple) are using they current customers to grow they business using vicious marketing and business tactics.

    There are new times now and this ''schema'' will no longer work in the future.
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      Apr 20 2012: Actually, I had not considered that when I wrote the question, but you are right. Apps. I despise the whole "app" thing, simply because I hate shelling out $1.00 for everything I want to download. Sure, all you young'uns think, "what the heck it's only a buck" but frankly, those bucks add up.

      Plus, over the years I've realized that it's the small ticket items that really cost the most in the long run.

      Apples knows this and does it very well.

      But please, can you tell me what are the "new times" and how will this profit model no longer work?
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        Apr 21 2012: The new times... actually are not so new.
        Apple business holds the same ''secret'' as any other business in this days - create something unique, buy as many resources at a low price, buy the cheapest work force you can find, automate the process, advertise - advertise - advertise, sell it at the highest prices and usually on the highest markets.
        I don't believe that most of the workers of Apple are affording the new IPad - maybe with one year payment - but this is irrelevant to Apple.

        What time has to do it? Well i read an article that in the moment the lunched the mission to the Moon, the data calculation power used is now available in a smart phone. And another article that said that the Military uses technology that for us it will be available 50 years from now.

        Slow release of technology is a business model that is based in an economical concept 'one pice for every human' - this is not Economy, is waste.

        Technology should be rented - how many times do you need your drill, let's say? Well maybe a couple of times in the year but for that you need to buy a drill right? What about getting one for a small fee - having a place where you can pay a small annual fee and rent the things you need for your DIY projects.

        This may be applied to all things that usually get stocked in your garage or in attic - things that you buy but use rarely.

        The current economic system is a waste system that has nothing to do with economy.
  • Apr 18 2012: They have a correct model because if they will not innovate then someone else will. If you look at Microsoft you see a company that failed to innovate for some time and it is becoming irrelevant.

    Technology does not have built-in obsolescence. Rather, one piece of technology depends on many other pieces of technology (software and hardware) to work. Both hardware and software stops being supported by their makers at some point so it is harder for someone to continue to use that technology esp. if something goes wrong.

    As a consumer you have the choice of not purchasing certain technology at all (like smartphone) or stay with each device as long as you can. Some people buy a new device as soon as one is available but I think that is a personal choice.

    In terms of consumers getting tired, this is similar to fashion where some never get tired to get something new and exciting esp. the younger generations that want to be different.
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      Apr 19 2012: When i mentioned built-in obsolescence I was mainly thinking of the iPad 2 that I use to type this message,which I just got 3 months ago, and now we have the iPad 3, and bless my soul are we even up to the 4 now?

      I mean, this thing is slick as can be, do I need slicker? What I'm really asking for perhaps is just to give me a piece of tech that can really grow with each new OS advancement, say, keep this 2 and update for the speed of the newer models.

      But as that relates to Apples business model, On the same article about Apple's stock price it mentioned that Aaple is now in a position where it HAS to come out with something new and exciting every few months or it will suffer. I can ony imagine the pressure. Can it really continue to WOW the public with new shiny toys every other week?
      • Apr 19 2012: Again you do not need to get the latest iPad. You can keep using iPad 2 for a few years at least. Why are you concern about iPad 3/4 ?
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          Apr 19 2012: Call me an old fogey. Don't get me wrong, I like tech, I like it mucho mucho. But it is true that everyone under 50 does not know of a time when anything you bought you had to make last for awhile. I' m just saying that to buy this magical tablet only to have the parent company consider it a castoff in a few short months seems somewhat ridiculous, especially when the ony real upgrade is to make it faster (and I suppose I'm secretly peeved that the pictures are supposed to be much clearer).

          Beyond my secret desire to get all new bells and whistles myself without having the disposable cash to keep up with it all, I'm also concerned about a business model in which a major company HAS to come up with something - anything - so long as it is new. Otherwise, it is considered irrelelevant (as someone else stated about Microsoft in this conversation)

          In short, this business model just has all the feel of how Jack Kerouac lived his life. He would stay up on bennies for an entire week, no sleep, crank out a new novel, only crash and sleep for days from sheer exhaustion. Some day these companies,and the public, are going to crash from sheer stuff-overload.

          At least that's the way it seems.
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    Apr 18 2012: How would that work?
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      Apr 19 2012: Sorry, I don't understand the question.
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        Apr 19 2012: Your question is:

        "Is it possible that eventually the consumer will become tired of the need for constant upgrades and want some tech that does not have this built-in obsolescence?"

        I don't understand how that will help. What you suggest is to not have innovation which is what gives us our standard of living. In other words your question is non sequitar.

        By the way one share in Berkshire Hathaway is $120,000.00
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          Apr 19 2012: Only $120k ? I'll take 5, please . . . Do they accept personal checks?