The Eulogizing for Apple has been going for a while now – Where’s the innovation?! They need a bigger screen! It’s too expensive!! And with the announcement of the new iPhone 5s and 5c, it's just gotten louder. The list of articles and blogs lamenting the absence of the visionary Steve Jobs is endless. Larry Ellison and Marc Benioff have recently joined the chorus. But are they right? And is all of this hand-wringing really appropriate?

The iPhone is losing market share because it's too expensive

Dylan Tweney, in this article for Venture Beat, laments the lack of innovation in the new iPhones – citing Android’s dominance in the smartphone market as proof that Apple has lost its edge. But when has Apple ever run a market domination strategy?

Everyone focuses on Steve Jobs the innovator – and conveniently overlooks the fact that he never altered his product strategy to gain market share. Don’t believe me? Look back at their struggle against Microsoft when every pundit argued the only way to be successful was to follow Microsoft’s OEM strategy. Look how that turned out – Apple lost a lot of battles along the way, but Microsoft’s realization that hardware/software integration was key to survival proves that Apple ultimately won the war.

The truth is that Apple’s iPhone strategy is entirely consistent with how Jobs ran the company. Time and again commentators and competitors would bash Apple’s products on price (and features – like a USB port, for example). Remember the steady release of iPod killers over the years? But I ask you – name 1 Apple product EVER  that was cheaper than its corresponding PC counterpart?  You can’t! Why? Because Apple never responded to market competition by making a cheaper product. Agree or disagree, but Apple has never competed on price. What I find entirely confusing is what makes all of these pundits think that Apple would suddenly change that core philosophy now?

The iPhone is proof that Apple is adrift because it lacks innovation

The argument goes like this – without Steve Jobs, the new iPhone is merely an incremental improvement over the existing one and not revolutionary, therefore it must be proof that the company has lost its edge and is doomed.

The problem with this argument is that the lionization of Jobs is getting over-coupled with product strategy. Yes, Jobs did innovate in a number of markets and the (tech) world is a huge beneficiary of his tenacity. But Apple has a long history of developing a product and then turning to incremental improvements to grow revenue. I love my Macbook air, but it is really THAT different than the powerbook I was provided by my employer 12 years ago? It’s just gotten smaller and lighter and faster, no big innovative tech at all. Everyone completely overlooks the fact that Steve Jobs didn't innovate on the laptop by adding a touchscreen the way so many other companies tried. Instead, he opted to create a new product category with the iPad.

And that’s my point about the innovation argument. Apple has never pursued an innovation for innovations-sake product strategy. That simply hasn’t part of the product strategy – ever. They develop a product, they incrementally improve it, they add functionality as they find things that they think work. They are very reticent to make changes to product. And the iPhone is staying true to this strategy. So arguing that the new iPhone needs some radical new innovation - whatever the pundit of the day seems to think it is - is entirely missing the point of how Apple has always been run.

THE IPHONE IS PROOF THAT APPLE HAS LOST TOUCH WITH THE MARKET

Yes, the world has changed. Apple’s competitors are more focused on design than they used to be. Samsung (in particular) is releasing some great Android phones.  And, I believe Nokia still has a chance to become a player again if they can figure out how to explain why they matter to the market. And everyone's doing this on shorter product cycles than ever before. On the software side, Android keeps getting incrementally better and more powerful. Windows Mobile, if they can get their story and functionality worked out, still has a chance...

People look at the incremental decrease in iPhone sales (see this great chart on Quartz) and think – there’s the proof we’ve been waiting for! Apple is the next Blackberry and/or Nokia. Those brands didn't keep up with the market and look what happened. Failure! And they may be right. But that’s missing the problem. Nokia and Blackberry missed major changes in the market (For Nokia, the touchscreen interface was kind of a big miss. For Blackberry, the shift away from Enterprise driving tech decisions) – that’s why they lost their way. Not because they failed to address a segment of the market that wants a bigger / cheaper / customized device. They missed an entire technological shift.

When you look at the "innovations" in the market from the competition - what we’re seeing is a maturing of the market with a focus on hyper-market segmentation. Motorola thinks that personalization is the next big innovation in tech – following an ‘express yourself’ model of thinking. Samsung has taken a successful shotgun strategy – releasing products hyper-focused on every segment of the market. Which seems to be working for them. Microsoft (with Nokia) hasn’t yet figured out where they fit into the puzzle. But these are all, in the end, product marketing strategies. These are about moving units based on what the customer is asking for. Has Apple ever played that game?! No. Because Steve Jobs – rightly or wrongly – famously didn’t believe in asking what the customer needed, he gave them what they didn’t know they wanted.

It's too soon to tell whether Apple is doomed

As uninteresting as it may be for the blog-o-sphere, the truth is that it's simply too soon to say whether Apple is doomed without Steve Jobs. Jobs was clearly a charismatic leader and his passing left a huge vision-void at the company that simply can't be replaced. But all of this hand-wringing seems a bit much. They've had some marketing misses, but they had those under Jobs. They've, apparently, had some product underwhelms... but does anyone remember Next computer and the Lisa?! There is some data to indicate that they’re losing their “cool” – which isn’t terribly surprising given that they’re entire brand identity is based upon being a rebel and it’s hard to be a rebel when you’re the number 1 tech company. The decrease in iPhone unit sales is something to be concerned about – regardless of whether its an indicator of consumer fatigue or just a maturing market. There are lots of things to be looking at and to be concerned about... but looking at the latest iPhone release and declaring that Apple died along with Steve Jobs? Yeah, I think that’s a bit premature.

Agree? Disagree? Drop me a note and tell me your opinion!