The thing about successful innovation is that it becomes assimilated and imitated quickly. The bigger the breakthrough, the bigger the market pressure for follow-up wonders. Without a constant flow of big ideas, customers become complacent, competitors catch up and investors catch on.
On Tuesday, Apple will have to answer critics who have worried the company has lost its entrepreneurial spirit and innovative drive since Steve Jobs died. They point out there has been a void of new, must-have i-devices since Tim Cook took over as CEO more than a year ago.
At the same time, Apple has reversed course on its long-held corporate resistance to stock buybacks and paying dividends.
Sure, Apple hasn’t unleashed a new iPhone that has customers rushing to upgrade. Nor has it unveiled a long awaited TV product. The June announcement of its iRadio streaming music service was greeted as an obvious, if late-to-the-game strategy. Instead, it has concentrated on the foundation of its mobile device business, introducing a new operating system to be out in the fall.
Apple will have a lot to crow about when it releases its quarterly results. iPhone sales likely remained robust even with Samsung getting rave reviews of its Galaxy 4 smartphone, and the iPad remains the tablet of choice eating away business from the traditional PC business.
Apple stock is about two-thirds the price it was nine months ago. Anticipation anxiety over its pace of innovation continues. That’s the future price of past success.
Tom Hudson is a financial journalist based in Miami. He is the former co-anchor and managing editor of Nightly Business Report on public television. Follow him on Twitter @HudsonsView.