Apple is like the goose that laid five golden eggs; naysayers claim a sixth is impossible

“In the fable, the cottagers are too impatient to wait for the goose to lay its golden eggs one at a time. So they open it up, thinking that way they’ll get all the gold at once,” Philip Elmer-DeWitt reports for Fortune.

“Apple is a little like that goose, says Asymco‘s Horace Dediu,” P.E.D. reports. “‘Here’s the problem,’ he wrote last summer in The Innovator’s Curse. ‘If a company produces a string of successes, the conventional wisdom is that the chances of another success are precisely zero. A company is valued based on its cash flows and foreseeable improvements to them. What it’s not valued on is its innovation flows (and foreseeable improvements to them).'”

P.E.D. reports, “The goose analogy came up again last week in an episode of the Cubed Podcast that brought together three of my favorite mobile industry analysts: Dediu, Benedict Evans and Ben Bajarin. The problem with Apple’s valuation, Bajarin said in ‘Cubed Episode 010: The Process of Innovation,’ is that the Street thinks Steve Jobs was the goose that laid the Apple II, Mac, iPod, iPhone and iPad. And now he’s dead. Not so fast, said Evans. Like golden-egg laying, making innovative products is a process, one that Apple worked out three decades ago.”

Read more in the full article here.

MacDailyNews Take: What about iTunes? The iTunes Store? The App Store? Apple Retail Stores? There are many more golden eggs in Apple’s nest than are being counted.

22 Comments

  1. There was no goose. There was no golden egg. There were no stupid villagers. They didn’t cut a goose open. If they had, they would not have found nothing. Because the only thing you get for nothing is old.

    1. Was that a slam against Apple? If so I think you could have done a lot better than that. That was just worthless man. Really? You wasted all that precious time to come up with that?

  2. Apple is not like other companies. One key difference is the willingness to cannibalize existing products. Just look at the iPod/iPhone or iPad/Mac. On the other end is Blackberry who saw the world change in front of them but in denial anyone could knock them down. Now look at them.

  3. So basically they’re saying if there is a sixth golden egg, then Apple be no longer dependent upon Steve Jobs for future products and the valuation should change for the better. Apple will then be its own company. We’ll see about that. I’m sure the Street will find other ways to disappoint Apple shareholders.

    It just doesn’t make any sense why Apple couldn’t be valued like any other company. The more sales, revenue and profits there are then it should make the company be worth that much more. Apple makes quite a bit of revenue for a tech company. I don’t see how anyone can plot future growth in tech because things change so quickly that one company is a leader one year and another could be the leader the next year. Just like how Google became worth far more than Apple to Wall Street when just last year Apple was going to be the first trillion dollar market cap company. Apple lost practically all its value in a flash and I still don’t know why because it doesn’t look like very much changed except the perception of Apple’s future owing to Android.

    I’m pretty much lost when it comes to trying to figure out how to arrive at a company’s share price. I don’t have a clue no matter how hard it try. Every time I look at Priceline and see an $1100 share price it just drives me nuts thinking why can’t Apple get even a little bit of that magic with all the wealth Apple has in its hip pocket.

    1. Think of it this way: Apple’s value is based on its real worth and the other valuations are based on hype, manipulation and profiteering — with the willing (and often unwilling) compliance of the involved company under pressure from Wall Street. If you doubt this, buy that $1,100 stock and watch how quickly it drops. Too good to be true always is.

    2. Not exactly. They’re saying there cannot be a sixth — but if it does happen, there cannot be a seventh. But if a seventh does happen, there can be no eighth; etc.

      Horace suggests that’s why Apple is always “doomed.” Whatever hit product Apple comes up with, the industry will end up commoditizing it. Since Apple isn’t built to compete at the low end, their continued success depends on coming up with yet another hit. But no one believes they can.

    3. I think you answered your own question.

      “I don’t see how anyone can plot future growth in tech because things change so quickly that one company is a leader one year and another could be the leader the next year.”

      The street is cautious about Apple’s potential for growth because Apple doesn’t disclose product strategy leaving speculation the future is bleak. The street doesn’t care about a company’s current P&L statement, Amazon proves that. It’s about what you will be selling tomorrow.

      1. While Apple doesn’t disclose its product strategy for competitive reasons there are lots of clues around from patent filings, acquisitions and general trends in technology. Pulling all those together into a meaningful product forecast is hugely challenging however.

  4. Just to name a few more, what about… iMac, Macbook Air, Macbook evolution, The Track Ball, The Trackpad, Move keyboard on laptop forward for palmrest, Retina Displays, AirPort (No one was really doing WiFi before Apple), Standardizing on USB in iMac, Macbook Power Adapters with MagSafe, iOS, Magic Mouse, Genius Bar, Apple Care, Apple Store EasyPay, Apple LaserWriter, FaceTime, iMessage, iWork, iPhone Camera (How many people lug around a point & shoot or DSLR anymore), Safari, Visual Voicemail, iTunes U & Podcasts, iBooks, Windows Compatible iPod & iTunes, iPod with Video, dropping the floppy and DVD drive first. Early converter to Flat Panel LCDs, Battery & Processor technology, Mac OSX, Ability to run Windows on a Mac (BootCamp), & Multi-touch (“just name a few”)

  5. 10 years from now the short-sighted, small-minded will look back at their lack of vision and bemoan that all that time, it was they that were among the really, really ordinary as they stand before the grander vision that had in the meantime become apparent to all. people of great vision have no time for idiots because life is too short. so sayeth solomé

  6. There is no Steve Jobs and Apple is merely coasting from Jobs’ inertia. Once Apple fulfills all the plans Jobs had specified there will be blank looks around the table and people muttering, “Well, what do we do now?”

  7. I’ve been using Apple products since 1988 and with the exception of the Apple II, I’ve used every product on the list. And good as those products are, as innovative, as iconic, they are not the reason I use Apple products.
    As one who has been using Apple since their beige desktops and black laptops were indistinguishable from everyone else’s (with of course the exception of the original Macintosh), I can tell you the most innovative, the most important “product” that ever came out of Apple, is the MacOS, and latterly the development of iOS.
    Of course it is the iMac, iPad, iPhone etc that has turned Apple into the giant it is today, but the bedrock on which every product has been built, is the OS,
    This was the case in 1988, and when I see colleagues “faffing” around with their Android tablets trying to get everything set up, in 2013 , it’s still the case.

    1. I agree and that is why it is sad to watch apple squander its momentum. So why not push into enterprise? Education more. And have the killer app for every purpose. They don’t. Why not own adobe or avid and every best of breed application? What happened to the I wallet. ? Why isn’t Siri a search engine online. ? In direct competition with google? Selling advertising? Apple doesn’t want it. Sucks. If Microsoft or google nail a file based mobile OS then iOS will be back to 10%. Damn. Android is already doing that. I have a lot of aapl and I’m pissed. No new products since jobs died. Not one person at apple has an idea?

  8. Well it seems to me that the whole gadget and watch industry are floundering around in the dark trying to guess the likely Apple design whilst turning out crap efforts at a smart watch.

    So, my guess would be that the sixth egg is going to ‘tick’ – and then everyone, having seen what good design looks like will rush to imitate.

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