The stock market is shaky right now, has Apple peaked?

Apple computer has been on a mostly upward trajectory since its IPO in 1980. Now, five years after the death of Steve Jobs, observers are wondering whether this trajectory can continue over the long term and has Apple peaked. Unfortunately, the market-moving product releases that Apple saw under Steve Jobs have not continued under his successor, Tim Cook. While Apple is is still a tremendously valuable company, it appears that Apple’s stock might have finally peaked.

Brash beginnings

In 1976, Apple burst onto the computer scene with the first personal computer created by Steve Wozniak and Steve Jobs. Soon, Apple II’s were widely available in schools and homes. The technology was not was like nothing anyone had seen before, and was quickly copied by competitors.

Then came 1984. I remember as a seven-year-old, visiting my local mall with my parents, and seeing a demonstration of the new Macintosh computer. I was amazed by it, as was everyone else. You could move the cursor around on the screen with a mouse, and that was a revolutionary new capability. Once again, competitors imitated the technology quickly, but many consumers were already sold on Macintosh. I, for one, remained a devoted fan for many years.

Jobs was never one to rest on his laurels. He famously commented that, “I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what’s next.”

Apple’s Dark Ages

In 1985, though, the tension among Apple’s senior leadership became too much for Steve Jobs. He resigned from Apple, and the company’s Dark Ages began.

Although observers would later praise Jobs for his work at Next and Pixar, the Apple company struggled in his absence. There were no more innovative products – just a standard computer company plodding along.

During the late 1980’s and early 1990’s, Microsoft gained a lot of ground vis-à-vis Apple, and the Windows operating system began an international success. In 1991, Apple made a misguided attempt to compete with Microsoft by building an IBM-based operating system – a mistake Jobs would never have made.

When Jobs returned to Apple in 1997, the company’s stock was trading for less than two dollars a share – about the same price as when he departed. Bringing him back might have been an act of desperation, but it was just what the languishing company needed.

The Return of Steve Jobs

The 1997 return of Steve Jobs to Apple signaled a revitalization of the company. Once again, it was a company with brash new products. Jobs oversaw the introduction of:

* the iMac in 1998

* the iPod in 2001

* Apple TV in 2006

* the iPhone in 2007

* the iPad in 2010

Each one of these products was revolutionary. I remember the 2001 release of the iPod. At that time, I already own an MP3 player – an Archos Jukebox. There were other MP3 players on the market, too, but they were all soon forgotten. The iPod became dominant, with its simple, innovative interface and its compelling iTunes music store. It was classic Steve Jobs.

Many other Apple innovations became dominant, as well. For example, the iPad essentially created the tablet market, providing a device that no one knew they needed. Looking back on Apple’s history, one cannot help but wonder what new devices we would all be using today, if only Steve Jobs had lived a few years longer.

In addition to creating great products, Jobs created tremendous goodwill around the company. The name Apple began to invoke ideas of simplicity and elegant design. Even the Apple stores adopted an iconic look that matched the design-based philosophy and approach of Steve Jobs.

During the second tenure of Steve Jobs at Apple, the company’s stock price rose from less than $2 to $60, despite a stock split. The company seemed poised for many more years of steady growth under Jobs’ leadership. Unfortunately, though, Jobs was terminally ill.

The Final Departure

Jobs so thoroughly changed the company’s trajectory that observers began to wonder whether the success of Apple could continue once he was gone. After his tragic passing in 2011, some predicted doom for the company.

But Apple stock continued its upward march, rising from $49 a share to over $132 at the Apple stock peak in May 2015. Four years after the death of Steve Jobs, observers could legitimately question whether the company might continue its unparalleled success even without Jobs.

Since mid-2015, though, Apple stock has steadily declined. It seems to many that Apple was running on fumes after the death of Jobs. The company seems to be burning through the amazing goodwill that Jobs created. With every passing day, there is less reason to believe that Apple is the innovative company Steve Jobs intended for it to be.

CEO Tim Cook is a talented businessman, but cannot measure up to the legendary status of Steve Jobs. He is careful and measured in his business movies, but lacks the originality and vision of Jobs. In 2013, Trip Chowdrhy of Global Equities Research opined that, “[Apple] cannot be complacent, if they become complacent they will become the next Microsoft.”

Three years later, it appears that Apple has, in fact, become complacent. Since the death of Steve Jobs, the company has stopped creating new product categories. Apple stocks newer versions of the same products it was selling five years ago. It has retreated into incremental improvements of the type that any major electronics company makes.

Conclusions

Both Apple’s stock price and its product line provide clear evidence that the company has peaked. Unfortunately, there will never be another Steve Jobs, and there is no Apple stock split on the horizon. The loss of Jobs was tragic for Apple and its shareholders because the company was too tightly connected to the Jobs persona.

It would be naïve to predict financial ruin for the company, and Tim Cook is too savvy a manager to let Apple fail. But going forward we can expect Apple to behave a lot like other tech companies. Compared to the outlandish achievements of Steve Jobs, that sort of mundane performance feels like failure.