John Gruber on Apple’s enterprise value

by jscariati

John Gruber on the fact that Google’s enterprise value is now higher than Apple’s:

I don’t know that anyone’s business is ever “safe” in technology. And Google isn’t making nearly as much from mobile advertising as they do from desktop browsers. I think the market has this wrong.

It seems like the longer Apple is successful, the more the market expects it to fail. Each new product release is viewed not as further evidence of Apple’s sustainability, but rather as temporarily staving off an inevitable decline – hence, the endless stream of predictions that Apple is perpetually “about to” collapse.

But why does the market view Apple this way? I think the issue is that their products are seen in isolation – as one-off “lucky” hits that have no relation to each other – rather than as an incremental series that build on each previous success.

In hindsight, it’s very easy to see the lineage between Apple’s products:

  • The iPhone built on the success of the iPod by turning it into just one of its built-in apps, while reusing the same 30-pin dock connector and integrating with iTunes in the exact same way – an approach that made it a very easy “drop in” upgrade
  • The App Store built on the success of the iTunes Store by integrating with customers’ existing accounts to make buying apps as easy as buying songs, which customers were already familiar with
  • The iPad built on the success of both the iPhone and the App Store by using the same operating system, thereby eliminating any learning curve while also maintaining compatibility with apps that customers had already purchased

So why does the market treat each of these successes as separate events? Because in real time, there are multi-year gaps between each of these product releases as Apple works on the next one internally, which creates the impression that it “isn’t doing anything” in between major product launches.

When a new product does come along, then, it’s not seen as a continuation of previous efforts – and thus any success it achieves is interpreted as a stroke of luck, reinforcing the initial misperception.