I am assuming (most) analysts are not stupid
A lot has been said about the markets' reaction to Apple's financial statements for the past quarter. It's quite interesting and even a bit baffling if you take in account that this is one of the most successful companies ever, if not the most successful. And yet, analysts are not really getting excited about the stock. Rather the contrary.
Is this because analysts are stupid? I doubt it. It's too easy an explanation an explanation, and an emotional one to boot. All too easy to open oneself up to being accused of Apple Fanboyism. Some of the analysts can be very pretentious, for sure, but most likely the traditional 20-80 rule applies, as it applies to most of us. 80% of analysts are trying to do the best they can with the information given to them. The other 20% think they are better than they actually are. But then again, what else is new ... and this attitude is not limited to just analysts. There are quite a few journalists that are sick in the same bed.
So let us assume that the analysts are not stupid nor intentionally trying to sink a company. What is then going on? Why don't they understand Apple?
Developing a commodity within a walled garden
This is my 2 cents worth. I may be wrong, but I believe we are seeing an entire industry sector commoditized before our very eyes. And it appears to be happening within a very well defined walled garden.
I have a couple of friends that have Android phones. Most of them have Samsungs. I have a low budget Samsung as well, for my work. I can tell you there is a significant difference between one Samsung phone and another. There is some interoperability, but it is not ubiquitous, and it is not imperceptible either. The Samsung Galaxy S4 can do plenty things, but they are fundamentally and in terms of experience quite different from the Galaxy Note, or the generic Samsung Android phone.
Ubiquitous and imperceptible interoperability
Not so with Apple. I write on the train on my iPad, I continue while walking to work on my iPhone. I open an application, often the same, on my Mac, and continue where I left off. I switch machines, and iCloud or Dropbox allow me to continue.
Now, none of this is different with Android. There are Dropbox clients for Android as well. But the experience really is different.
Using iOS and OSX, there is no fundamental user end difference in environment, I do not need to relearn anything. And with the exception of the hosting services, be it Dropbox, or Amazon Cloud, or whatever, it happens within the walled garden Apple tends to. And tending to it they do, if you look at the malware comparison between for example Android and iOS.
But it is not just about that. Samsung cannot provide me with a fully integrated system. Neither can Google. And it's not that especially that last one has not tried. Let's not forget about those Chromebooks, hyped to the hilt. Sadly, they were very expensive and really went nowhere. Pretty much like Google Glass, right?
Let's be clear, to date, the only company that can actually provide this type of full integration across devices is Apple. But that level of interoperability comes at a cost.
Any compatible tool will do
If it no longer matters which exact tool I use, any (compatible) tool will do, as long as the tool fits within the context I am currently in. The actual tool switching effort is as minimal as possible. Even specs don't really matter that much any more.
An iPhone 4S or an Iphone 5 really does not matter. One may be a bit faster than the other, but both can do the work. For most 90% of the applications I use on a regular basis, it does not matter whether I use my Macbook Air or my iMac, or for that matter my iPad. As long as the specs allow my to use a system that has most if not all of the functionality of the latest release, I can work with those tools. I have no urgent need to upgrade to the latest and greatest, because it does not really matter.
And that business model is significantly different from Google and from Samsung, who do not appear to be interested in the longer term support for their tools. Rather, they want you to buy a new tool every time you are due for an upgrade. Quite interesting, really, and in line with the Android operating system update cycle (or lack thereof) for existing phones and tablets.
Emphasizing the identity of solutions
And where Samsung is looking to promote the identity of its products, Apple focuses more on emphasizing the identity of its solutions. This is who you will be (Samsung) versus this is what you can do with our tools (Apple.) While Apple offers tools for each occasion, often it does not matter which specific tool you use, as long as you consider it to be the right tool for your specific context. Apple tools are compatible with one another, and therefore the tool does not matter, but the overarching infrastructure does.
Personally, I am heavily invested in tools for my trade, tools that serve a purpose, but these tools exist for more than 90% only within Apple's walled garden. I have no need to go beyond that wall.
Safe and protected in that walled garden
And while the tool may not be the most exciting when compared to the technical specs of the latest Samsung, the solutions and their cross tool utilization most certainly are. Samsung to date has nothing like it to make my tool switch imperceptible across phones, tablets, laptops and desktops where I spend most of my waking hours. Rather, I currently feel safe and protected in Apple's walled garden that has built its reputation on understanding and serving the needs of its customers, even if those customers where not really aware of those needs.
At the end of the day, Apple is turning phones into pencils, pens, crayons and paper. And they are currently the only ones to offer an integrated set of tools to meet all of my needs. Even Microsoft never got there.
There are no distinct markets
Apple appears to be close to achieving that ubiquitous and imperceptible interoperability. No matter how successful they are in the smartphone and tablet markets, to us users these are not distinct markets. There is just us, looking for an integrated experience or at least an experience as well tuned as possible to our context. And that context may be a train, a plane, an operating theater. It may be a small village in the middle of Africa. And Apple currently is the only organization capable of delivering it.
This is why the this quote by Bill Campbell who serves on Apple's Board is so interesting and perhaps even irrelevant at the same time. Apple may bring its interface to intimate objects ... but to me and millions of other users, they already have.