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Why Apple is Sinking, and What Small Business Owners Can Learn From It.

Just a few years ago, Apple was rated as one of the top companies in the world. And while it’s still among the most profitable companies in the world, it is losing ground in other areas that will eventually sink the company.

Unless Jonathan Ive is developing some sort of high tech Ouija board; Steve Jobs is not likely going to bail them out this time.

Small Business Owners Can Learn From Apple's Massive MistakesApple’s core customer base was always the creative class. From designers to film makers and the music industry and all points in between, they made the best and most reliable hardware and software for us to work with.

It was that core group of clients that were willing to pay the extra money to have the best gear in our studios.

The creative class kept Apple afloat for a decade when they were barely able to stay in business.

Then the iPod came along, and Apple saw a way to break into the mainstream. A way to get their logo in every home. Good for them. After all, that’s what most business owners dream about.

The indisputable success of the iPhone and iPad sealed it. Apple became a consumer focused business.

Slowly, software (now renamed apps) like Final Cut and Logic which used to be industry leading programs used in film and recording studios began to be tinkered with and made more consumer friendly.

Logic went from a cost of $600 down to $200. Along with that price drop went a lot of high end features with the reasoning that the masses really didn’t need them anyways.

Final Cut went from a $1,500 creative suite to a $200 app with the same problems. More advanced features were stripped out for the same reason.

What Apple forgot was that the average consumer musician and video enthusiast want free or very low cost software solutions. Even with a reduced price, $200 is way more than most are willing to spend.

With the loss of high end features, professionals turned to Adobe’s Premiere and Avid’s ProTools for their creative needs. Both companies have worked hard to improve their products, and earn the trust of professionals.

At the same time that Apple was making these changes to their software, they began making changes to their hardware as well.

The removal of DVD/CD burners from laptop and then desktop devices was not driven by customer demand. It was driven by a desire to increase sales through Apple’s iTunes store.

Again, the creative class took the hit. Years after Apple made this decision, many creative focused businesses are still required to deliver CDs or DVDs to clients.

Screens got smaller. Essential connections changed. Key features were removed.

Things got glitchy. Apps started to crash.

You were forced to do updates that removed features from your software that most people think are essential. The Save As feature was removed from the Pages app to make sure that the menu looked the same on a $600 iPhone as it appeared on a $2,000 laptop.

In September, 2016 Apple removed the headphone jack from the iPhone. I wonder what companies like IK Multimedia and Apogee who both specialize in making hardware that allows musicians to plug into Apple devices to record into mobile devices think of that. Both firms, who were once proud Apple only companies are now expanding products and apps to include Windows users as well.

What about companies like Square who make mobile debit and credit card readers? I wonder how long it will be before they turn to Windows Mobile devices.

After all, Microsoft is targeting the creative and business class that Apple has turned away from.

So what can small business owners learn from this? Three things:

1 - Don’t be arrogant.

It’s easy to get cocky when you’re doing better than you had ever imagined.

Apple fought long and hard to become the best tech company on the planet. They had a lot of competition, did a lot of market research and built their base one customer at a time.

But with success comes a sort of euphoria that makes some people think they are invincible.

They forget all the soldiers on the field that helped them become victorious.

Apple entered this mindset before Steve Jobs passed away, and probably due to the lasting influence of its co-founder and unfortunately has not turned back.

2 - Mr. Rhythm says “That what makes ya, can also break ya.”

Mr Rhythm was a character from an obscure but very funny 80s movie called DC Cab that starred Gary Busey, Mr. T., Max Gail, Bill Maher and many others. That line has stuck with me for over 30 years now.

The creative class, Apple’s core client base, feels betrayed. November’s announcement that new MacBook Pros would not work with external hard drives, and even Apple’s own desktop monitors was the final straw for many people.

They’ve been waiting for a couple of years for Apple to update the MacBook Pro and were sorely disappointed.

The creative class has the eyes and ears of the public through YouTube, media, photography and so on. We’re everywhere, 24/7 around the globe.

Apple should have thought of this before they decided to announce that people will pay the extra price just for the experience of owning one of their products.

3 - Be the best at what you do, and don’t try to be all things to all people.

And that is where Apple is failing now.

They want to have more than one device in everyone’s home. They want to dominate the market. To pound their competitors into submission.

They’re trying to be Microsoft in the 90s, and we all saw how well that turned out.

Be the best you can be. Leave room for competition. Make your existing customers happy before you try to win over more.

Just one more thing.

Communication is key. Apple used to lead here as well.

A few years ago, they had a falling out with Chiat/Day, the advertising agency that had been at the helm of all of Apple’s marketing efforts since the 1984 advertising campaign.

Most of Apple’s advertising is now done in-house with too many generals having input. Imagine that stress. No one is going to tell the boss that they’re wrong. Especially not at that place.

So Apple does whatever it thinks is best without outside input. And that is the number one problem they share with most small businesses.

You should always consult with someone outside your business before making big changes.

It’s hard enough to reverse a decision in a small company. Imagine what that’s like for a $500 billion business.

Remember the Titanic. A few cheap bolts and you have one of the worst nautical disasters in history. 

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We look forward to hearing from you.

Mitch Ross

President | Creative Director

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