Here's Why Apple Will Never Be What It Was Under Steve Jobs
It paints a picture of a company settling into a kind of ideological stasis since the death of its revolutionary leader.
Anything that even slightly hints at Apple fading from glory gets certain people annoyed.
But, what she's saying is not that crazy. Apple under Steve Jobs had an unparalleled run of success. From the iPod to the iPhone to the iPad, Jobs was almost perfect in his product delivery.
But nothing lasts forever. At some point a company runs out of ideas, or the competition improves, or its execution comes up short.
Apple was going to bump up against the law of averages even with Jobs around. With him gone, it's going to be even harder to continue its excellence.
Kane thinks that Apple will most likely never be the king of innovation that it once was and that its current leadership could be steering it to a significantly lower level of cultural importance.
In her book, Kane quotes Harvard Business School professor Gautam Mukunda, author of "Indispensable: When Leaders Really Matter," who explains that not even Apple is immune to what he calls "business physics."
Mukunda's theory is that businesses cannot grow forever, and that at some point they have to plateau.
Referring to factors like internal complacency and pressure from competitors, Mukunda told Kane, "There are just forces in any environment and any market that constantly drag companies to the mean. What Apple did was essentially in violation of business physics for an extremely long time. They created this beautifully optimized machine."
Jobs transformed Apple from a has-been into a giant by introducing the world to brilliantly designed and revolutionary products like the iPhone and iPad, and marketed them on stage with mesmerizing presentations that only he could deliver.
Now, under the leadership of CEO Tim Cook, Mukunda said: "Apple can be an excellent ordinary company or a genuinely extraordinary one. But it can't be both."
Under Cook's watch, Apple reported $58 billion in revenue for the first quarter of 2014, its biggest quarter ever, and it brought in $170 billion in revenue last year. For all of 2010, the company did $65 billion.
But the numbers can be misleading. Look at Microsoft. Sales under CEO Steve Ballmer grew while the company became increasingly irrelevant in the broader tech industry.
Apple is reportedly developing an iWatch, which would be a health and fitness tracking device. If it's a big hit, it would prove Kane, and other naysayers wrong. It would show that Apple, in a post-Steve Jobs era, can still innovate in new technology categories.
If the iWatch is a flop, it's really bad for Apple.
The competition isn't sitting on its hands, waiting for Apple to do something. Facebook is investing in virtual reality headsets, and Amazon is looking into delivery drones. At the TED2014 conference, Google CEO Larry Page talked about self-driving cars and curing disease.
Cook has consistently said Jobs told him to run Apple as he sees fit, not as he thinks Jobs would have run Apple. However, he's done little to change the company's operations.
In an interview with Business Insider, Kane said that most of Apple's executives have been around for 15 years and that "no one can remain cutting edge forever."
Working at Apple no longer stands for what it used to, Kane argues. Silicon Valley's young talent would rather start their own companies or work elsewhere, and competitors have been poaching Apple employees who, she says, would not have considered leaving during the Jobs years.
Apple has made some interesting hires recently, like Burberry CEO Angela Ahrendts to be its retail chief, but Kane thinks that Cook is too comfortable projecting the image that Apple is the same as it's ever been. She wants Apple to publicly recognize that 2014 is very different from 2010, the last year Jobs was leading it.
In the epilogue of "Haunted Empire," Kane writes that under Jobs' brilliant second run at Apple, "with each new triumph, the company rose higher and higher. But," referring back to Mukunda's point, "sooner or later gravity always wins."
So far, the majority of critics and analysts find Kane's assumptions to be much too pessimistic.
But, what if she's right? Apple has been the leader for 15 years. Is there any other instance of a company sustaining excellence for that long?
Of course, Apple is far from doomed. It has $146 billion in cash. It's not going to suddenly have to shut down operations.
But, if it goes sideways like Kane predicts, it will be as good as done. In the technology industry, if you're not making giant moves, you're as good as toast.