Over the past decade, Apple's success has hinged on introducing new, innovative products that take the world by surprise. Iterating naturally follows, once whatever product they've launched takes off, but Apple has been able to keep up its great performance by bringing something new to the table as soon as competitors start catching up to them.
At this point, it's been a few years since Apple has done anything Earth-shattering. In the meantime, competitors like Samsung's Galaxy series and smartphones based on Android have not only caught up to Google in terms of competitiveness, they've also surpassed Cupertino in some dramatic ways. Galaxy phones outsell iPhones around the world, and the vast majority of the globe's smart devices run on Android, not iOS.
Meanwhile, Apple has found itself playing defense in ways it's not used to. Making bigger screens because Samsung did? Making cheaper phones to maintain or grow market share? Caring about market share??
That's not the Apple we know, and according to UBS analyst Steve Milunovich, it's not a good look for the company. In fact, he claims Apple is having an "identity crisis."
"Apple historically has played the role of underdog, beginning with its niche Mac status after losing out to Windows," Milunovich says, according to ZDNet. "The iPhone and iPad are the first times Apple has had a leadership position drawing significant and competent competition."
As competition heats up, Apple is facing a lot of pressure to expand its range of devices, but Milunovich isn't convinced the company knows how to play like a typical electronics corporation.
"It doesn't appear to be in Apple's DNA to cover market spaces just to get revenue," he said. "Yet now that the company is so large due to iPhone success, investors are clamoring for product expansion with larger as well as lower-priced phones with Android gaining favor."
Apple's typical play would be to invest its resources into the next big thing, but that requires investors to keep calm and let events play out patiently, something they haven't been doing for the last few months. The company's stock has tumbled from record highs, and the business world is skeptical.
"The only way out might be innovation in new categories, which will require investor patience," said Milunovich. Most companies would rush out a 5- to 6-inch phone; Apple probably won't."
