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<\/h2>\n<\/h2>\nguest article by Tor W. Andreassen<\/em><\/p>\n On August 1st, 2018, Apple\u2019s share peaked at USD 227 making it the first company ever to reach a market cap of USD1 trillion. By early April 2019 its shares trade at USD195. Something has happened to Apple. Partly as a response to the decline in share value, Apple\u2019s CEO, Tim Cook, 25th\u00a0March took the stage in Steve Jobs Auditorium at Apple\u2019s headquarter in Cupertino, CA, and announced that \u201cToday is going to be a very different kind of event\u201d. It sure was!<\/p>\n Watching the event from Norway via my MacBook Air, my three \u201cnon-ding in the universe\u201d takes from the event were:<\/p>\n<\/div>\n No new devices were mentioned \u2013 only new services: TV+, News+, and Arcade The general impression after the announcements is that the company or its management has run into a dead-end innovation alley. They do not know what to innovate next! Entering is upgraded and repackaged services available for all family members on all platforms.<\/p>\n My question is: Does this change in how Apple create value, excite customers? Most likely not. Second, Apple\u2019s announcement signals a move from pricing per unit to subscription-based pricing. The change in how they capture value, is more than interesting. Finally, they have built higher fences around customers thus making it harder for them to leave the ecosystem of highly integrated Apple products and services. History has proved that locking in customers is not a sustainable business strategy.<\/p>\n Most customers like to be associated with the one firm that is perceived as the most attractive firm in the category. According to the\u00a0American Innovation Index, In 2018 Apple was perceived as the most innovative firm in the USA. My prediction is that Apple is gradually faltering on the relative attractiveness dimension which should predict reduced customer loyalty and a continued drop in the top line.<\/p>\n Apple\u2019s current innovation strategy is far away from Steve Jobs\u2019 sales pitch to Pepsi\u2019s CEO John Scully when he tried to recruit him to Apple: \u201dDo you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?\u201d Scully came and later fired Jobs from his company. Jobs returned to Apple mid 1990s (and Scully left) and made Apple the most innovative firm on the planet by introducing a series of never-seen-before-products like iPod, iPhone, iPad, iTunes, etc. Customers\u2019 response was delight and admiration. With marginal upgrades or innovations, customers did not feel the same urge to upgrade to the latest gadget. Compensating for the impact on revenue from increased time between customers\u2019 upgrades of iPhones and iPads, Apple increased prices significantly – especially for iPhone. Today, customers not only feel numb in their wallet but flat on their emotions. In short: The juice has left the Apple resulting in an increasing tendency to exit from the iOS -garden and enter the Android garden. With falling retention rates, Apple\u2019s revenue is taking a hit.<\/p>\n New York Times journalist\u00a0Fahrad Manjoo\u00a0claimed rhetorically that, Steve Job\u2019s question to John Scully, today could be paraphrased: \u201cDoes Tim Cook want to sell prestige TV for the rest of his life, or does he want to change the world?\u201d<\/p>\n Only Tim knows what Tim wants. Two things are for sure: Customers want Apple to make a ding in the university, not in their wallet. Customers want to be excited, not merely satisfied. Can Tim do that? Can Tim give the audience a \u201cone more thing?\u201d<\/p>\n Tor W. Andreassen\u00a0is professor of innovation at the Norwegian School of Economics and the Director of Center for Service Innovation (CSI).<\/em><\/p>\n<\/div>\n guest article by Tor W. Andreassen On August 1st, 2018, Apple\u2019s share peaked at USD 227 making it the first company ever to reach a market cap of USD1 trillion. By early April 2019 its shares trade at USD195. Something has happened to Apple. Partly as a response to the decline in share value, Apple\u2019s […]<\/p>\n","protected":false},"author":1,"featured_media":8121,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,8],"tags":[],"_links":{"self":[{"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/posts\/8109"}],"collection":[{"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/comments?post=8109"}],"version-history":[{"count":11,"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/posts\/8109\/revisions"}],"predecessor-version":[{"id":8192,"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/posts\/8109\/revisions\/8192"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/media\/8121"}],"wp:attachment":[{"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/media?parent=8109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/categories?post=8109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.servsig.org\/wordpress\/wp-json\/wp\/v2\/tags?post=8109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
\nA transition from per unit pricing to subscription-based pricing
\nBuilding higher fences around Apple\u2019s customers<\/p>\n
\n![\"\"](\"http:\/\/www.servsig.org\/wordpress\/wp-content\/uploads\/2019\/04\/59b948189803c51d008b553c-750-563.jpg\")
\nAfter Jobs death October 5th, 2011, Tim Cook took over. Cook\u2019s legacy is that he trimmed the logistics and removed inefficiencies and negotiated better prices from suppliers. Apple\u2019s shareholders thrived on the carry over effects of innovation energy from Jobs and the operational trimming by Cook. The share peaked August 2018.<\/p>\n\n![\"\"](\"http:\/\/www.servsig.org\/wordpress\/wp-content\/uploads\/2017\/09\/Andreassen-TorW_1-150x150.jpg\")
<\/p>\n<\/div>\n\u00a0<\/span><\/div>\nPhotos:\u00a0www.apple.com
\nhttps:\/\/www.businessinsider.com\/tim-cook-daily-routine-apple-ceo-2017-9<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"