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Cringely's Final Predictions: Apple Becomes a Financial Service and Hedge Fund (cringely.com)
For 22 years technology writer Robert X. Cringely has been making predictions for the year to come -- but this year may be his last. So at age 66, he's promising his 2019 predictions will also "take a look out several years...because I sense the tech industry about to enter an unprecedented correction."
And last week he unveiled his first prediction -- that Apple under Tim Cook "emulates GE under Jack Welch.... Jack Welch took GE into financial services in 1981, transforming the company and increasing its market cap by 4000 percent over his 20 years. "
Tim Cook has already started in 2019 along the same path forged by GE's Jack Welch back in 1981. This strategic shift started to show just this week with Apple directly financing iPhone sales in China and announcing an Apple credit card with Goldman Sachs... Look for Apple to start financing lots of things in 2019. Remember your car dealer would rather lend you money than have you pay cash for that ride because financing is its own profit center. So iPhone prices will continue to rise, but iPhone payments will probably decline as Apple cuts out middle men and efficiently sucks-up that aspect of the phone supply chain. This is how Apple will arrest iPhone market share declines -- by assisting sales and making even more money in the process.
I expect Apple to not just make strategic investments, but participate in strategic financing as well.... What Apple is probably closest to becoming is a hedge fund -- a very big hedge fund in fact. Apple's available financial power is approximately equal to that of the world's two largest hedge funds -- Bridgewater Associates and AQM Capital Management -- combined. So when someone tells you Apple is in decline or doesn't have a clue, they are wrong. Apple will continue to compete in its established technology markets as well as new ones. But Apple has also found a $200 billion hobby that will keep it growing for the next decade no matter where the Information Technology market goes.
Cringely notes that services "are more profitable than hardware." But Cringley has always been gracious about entertaining other opinions. In 2000 he answered questions from Slashdot readers, and last week he reminded his readers again that as technology completes its next great transitions, "I'd really like to hear your thoughts, too."
As dramatic changes (including AI) kick off what may be a new 50-year-cycle, "Everything is changing and nothing -- nothing -- will ever be the same again. I hope that's a good thing."
And last week he unveiled his first prediction -- that Apple under Tim Cook "emulates GE under Jack Welch.... Jack Welch took GE into financial services in 1981, transforming the company and increasing its market cap by 4000 percent over his 20 years. "
Tim Cook has already started in 2019 along the same path forged by GE's Jack Welch back in 1981. This strategic shift started to show just this week with Apple directly financing iPhone sales in China and announcing an Apple credit card with Goldman Sachs... Look for Apple to start financing lots of things in 2019. Remember your car dealer would rather lend you money than have you pay cash for that ride because financing is its own profit center. So iPhone prices will continue to rise, but iPhone payments will probably decline as Apple cuts out middle men and efficiently sucks-up that aspect of the phone supply chain. This is how Apple will arrest iPhone market share declines -- by assisting sales and making even more money in the process.
I expect Apple to not just make strategic investments, but participate in strategic financing as well.... What Apple is probably closest to becoming is a hedge fund -- a very big hedge fund in fact. Apple's available financial power is approximately equal to that of the world's two largest hedge funds -- Bridgewater Associates and AQM Capital Management -- combined. So when someone tells you Apple is in decline or doesn't have a clue, they are wrong. Apple will continue to compete in its established technology markets as well as new ones. But Apple has also found a $200 billion hobby that will keep it growing for the next decade no matter where the Information Technology market goes.
Cringely notes that services "are more profitable than hardware." But Cringley has always been gracious about entertaining other opinions. In 2000 he answered questions from Slashdot readers, and last week he reminded his readers again that as technology completes its next great transitions, "I'd really like to hear your thoughts, too."
As dramatic changes (including AI) kick off what may be a new 50-year-cycle, "Everything is changing and nothing -- nothing -- will ever be the same again. I hope that's a good thing."
I have a really fat 50 year old business book (over 3100 pages) and the end part of it basically suggests that once any business has enough financial leverage / savings that it's best to just get into financing/lending/banking, period.
Bob's predictions haven't been right all the time. But never at 50-50. More something like 75-25 or even 80-20.
The good part of Bob's predictions is how acute and sharp he's been so far.
And not just the predictions, but also any other piece he'd added to his blog (or whatever else you define it), one or a kind.
Going far beyond the pure appearance and surface, adding thought value by interconnecting news and facts from different sources and, of course, putting in a good dose of his own sharp intelligence.
I would suggest anyone how likes seeing things under a different light and yet getting most of those right, go heave a deep read to that blog.
It's worth every single information bit.
Sent as ripples into the electromagnetic field. No single photon has been harmed in the process.
Doesn't matter if you're making a popular smartphone or rubber dogshit.
The best part about discussions like this is that it's near conceded that Apple is now 'a smartphone maker.' The Mac is just about dead.
Every single company that decides that "services are more profitable than productivity" eventually fails big and has to correct.
I've worked for GE, Honeywell, and a couple of other fortune 500s, and each time I got to witness the destruction from the inside that comes from the CEO and board deciding that they want to be a services company rather than a company that makes things.
I got to witness the wholesale destruction of jobs as each company outsourced those services to low-cost countries and had only a staff of "front men" in the US to pretend they were the competence behind those services.
It worked great until their customers realized they could just outsource those services themselves and not have a middleman.
What Apple looks like it is trying to do is lock its stupidly hyper-loyal fanbase into a cycle of insurmountable debt, turning them into modern-day digital sharecroppers. "Sure we've raised the price of our phones to $1200, but we'll finance it at high rates and a term longer than the lifetime of the product, and when it dies and you need a new one, we'll conveniently refinance the rest of the loan into the loan on the new phone. And oh by the way, if you don't buy a new phone with this convenient rollover financing, you'll have to pay off the note on your dead phone in full right away because we've lost our security."
Predatory lending at its best.
I'd say the real problem is they shat all over their ecosystem, peed in their chili if you will, by refusing to service their own products and blocking the others like Rossman that were willing to do the work.
I HAD (key word had) several customers that WERE very loyal to Apple but it was because everything "just worked" together, their iPhone into their Macbook Airs into their iPads...then Apple stopped repairing their Macbooks (Steve Jobs gotta be spinning like a top in his grave over that one) and their iPads, the rep on the new Macbooks is so bad even these non tech savvy users didn't want them, and then it came out they were fucking users by gimping performance on older phones when they were updated....well it don't take that much to REALLY piss off a customer when they've spent 5k+ at your store and can't even get their products serviced so...they are now all using Samsung Galaxy into nice HP business class laptops they had me spec for them that honestly gave them better performance at a cheaper price.
Apple is making a serious fuck up that you are 100% correct on, you HAVE to keep them "in the garden" but the way you do that is by not only making products they want to buy but servicing (or making it easy for third parties to service) the older gear. Remember this gear ain't cheap folks and your non tech types? Can get attached to their gear. Apple saying "fuck you we won't fix it" while simultaneously blocking others from fixing it? Well like I said my customers USED to buy all their gear from Apple, and being doctors they had plenty of money to buy the nicest gear, hell one even had her entire office running on iPads...now they are on new Surface units.
ACs don't waste your time replying, your posts are never seen by me.