09 May 2014

Joe Sixpack

The key to those wonderful six-pack abs is a solid core. And light, right eating. How's Apple's core doing? For some time, there's been a continuing argument that either a) Steve died, so did the company or b) Steve took the company out of the world of computing into one of gadgets with the iPod, and this decision is now biting Tim in the butt.

For rather a long time, in these endeavors and elsewhere, I stood alone (so far as my extensive reading shows me) in diagnosing the issue as one of Apple being a toy company, e.g. Mattel rather than some kind of computer company. Alone. So alone. Until Today!!

Well, it was "announced" Thursday that Apple would slurp up Beats for $3.2 billion. And the die was cast. But the slew of journalism got into full song today.

This piece shows up, among a host of others, as one might expect. You can find, if not already, your favorite.
Having broken the ice, Apple now must embrace its newly discovered and more realistic identity as a higher end consumer electronics company and continue to move aggressively to extend complementary offerings.

AKA, it's now Mattel time. The Piketty income concentration evidence is also material to Apple's move, while I really, really doubt that Tim would ever admit it through word or deed. As wealth and income concentration continues apace, the TAM (top 20%, by USofA dollars, of global earners) doesn't grow much, and will eventually shrink. Again, as Dr. McElhone observed, "the world is not linear". Income concentration has a black hole aspect: once it gets its act together, the event horizon expands and accumulation accelerates. The Apples of the world have to move ever more product into, at best, static TAM. Burberry (remember her?) does it by the meme of a coat for every occasion. But only a Burberry is good enough for those with the moolah. Apple doesn't have such a product. No one really needs multiple phones or pads or pods. So, just as Mattel has to keep creating new games to create sales, Apple has to offer yet more devices to soak up the 20% disposable income. The problem for Apple is that Beats phones sound like drek, and on purpose. They're ghetto blasters for your head. If Apple goes through with it, it will end badly.

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