Trouble for Apple Stock?
Even though Apple Inc. (NASDAQ:AAPL) stock has plunged quite a bit, most investors would agree that the company is far from over. So it’s not every day that you hear someone comparing the Cupertino, California-based company to BlackBerry Ltd (NASDAQ:BBRY). But someone just did and he happens to be a well-known person in the tech community—Marco Arment.
Known as a co-founder of Tumblr, Marco Arment worked as the lead developer and chief technology officer (CTO) for Tumblr from its inception in February 2007 to September 2010. In a recent blog post, Arment did the absolute unthinkable to Apple stock bulls—he compared Apple to BlackBerry. (Source: “If Google’s Right About AI, That’s a Problem for Apple,” Marco Arment’s blog, May 21, 2016.)
Arment is not worried about Apple in its current business. In fact, he said that “Apple is being led properly day-to-day and doing very well overall.” (Source: Ibid.)
Instead, what Arment is concerned about is the possibility of a shift in the industry landscape: “Today, Amazon, Facebook, and Google are placing large bets on advanced AI, ubiquitous assistants, and voice interfaces, hoping that these will become the next thing that our devices are for,” he wrote. “If they’re right—and that’s a big ‘if’—I’m worried for Apple.” (Source: Ibid.)
What Arment is referring to are the massive investments made by tech giants in the big-data Web services and artificial intelligence (AI) fields. While Apple also has a growing services segment with things like “iCloud,” Arment doesn’t believe that the company can match its rivals in terms of big-data services.
“Where Apple suffers is big-data services and AI, such as search, relevance, classification, and complex natural-language queries,” wrote the Tumblr co-founder. “Apple can do rudimentary versions of all of those, but their competitors—again, especially Google—are far ahead of them, and the gap is only widening.” (Source: Ibid.)
And this brings the comparison to BlackBerry. Before Apple released the “iPhone,” BlackBerry devices were the best smartphones on the market. They were great for making calls and sending e-mails and they also boasted great security. But then the iPhone arrived.
The iPhone came with an amazing operating system and the “App Store,” where users could download any app they could think of. It changed the way people use their smartphones. By redefining what smartphones are for, the iPhone killed BlackBerry.
The worst part is that there was nothing BlackBerry could do to prevent this.
“No new initiative, management change, or acquisition in 2007 could’ve saved the BlackBerry. It was too late, and the gulf was too wide,” notes Arment. (Source: Ibid.)
Of course, it’s not clear whether big-data AI services will be the future. Arment admits that “Google launches a lot of weird, geeky, technologically impressive things that go nowhere.” And if Google is wrong, Apple will be just fine with its current ecosystem of apps.
“But if Google’s right, there’s no quick fix. It won’t be enough to buy Siri’s creators again or partner with Yelp for another few years,” he argues. (Source: Ibid.)
Marco Arment’s conclusion: if big-data AI services are the future, “that’s a big problem for Apple.” (Source: Ibid.)