Apple is getting slowly smaller. And Jony Ive’s departure, who after designing at Apple for 23 years will leave to form LoveFrom, a design firm- helps explain why.
Over six years ago, there were arguments made that promoting him to CEO was the last best hope for restoring Apple’s innovation mojo. But an article from the Wall Street Journal reveals why that never would have worked.
While Jony Ive is immensely talented with design skills, he sorely lacks the ability to envision and capture large new business opportunities that the late Steve Jobs repeatedly demonstrated after he returned as CEO back in 1997. And it is obvious that Job’s appointed successor, Tim Cook, is sorely lacking in that skill as well.
Before getting into the depths of slow-motion death of Apple’s Innovation Mojo, let’s look at how much its growth has slowed down. According to Morningstar, for the last five years, Apple has grown at an average annual rate of 9.2% to about $266 billion in 2018 revenue with a whopping 23% net profit margin.
So, the reason behind Apple’s shares trading 14% below their all-time high could be due to it falling off its growth pace. After all, in its financial report for the quarter ending March 2019, revenues fell 5% to $58 billion, while net income slid 16% to around $11.6 billion and its net margin declined to 20%.
Cook said in a statement, “Our March quarter results show the continued strength of our installed base of over 1.4 billion active devices, as we set an all-time record for Services, and the strong momentum of our Wearables, Home and Accessories category, which set a new March quarter record. We delivered our strongest iPad growth in six years, and we are as excited as ever about our pipeline of innovative hardware, software, and services.”
While it is been said many times before, it remains relevant that Apple used to lead the world in innovation. A journal also wrote, “Mr. Ive and Mr. Jobs often ate together, feeding off each other’s ideas. Mr. Ive could translate futuristic concepts into physical objects with simplicity and sophistication. Mr. Jobs was the inspiration and the editor needed to bring these ideas to life.”
In short, it seems like the combination of skills that Steve Jobs and Jony Ive bought to the giant company’s innovation engine will no longer exist.