Is Apple outdated?

by Matt Klassen on April 28, 2016

apple-china-720x450It seems Chinese mobile consumers are starting to admit an obvious fact about Apple that their American counterparts have pushed out of mind for years now: iPhones are lagging behind the competition in terms of innovation and advancement, and for years have failed to offer anything in the way of a solid growth driver.

In an interview with CNBC, billionaire CEO of tech conglomerate LeEco, Jia Yueting, said that Apple was “outdated,” and that it has been losing momentum in the Chinese market. The comments come amidst Apple facing increased regulatory pressure in the country.

“One of the most important reasons is that Apple’s innovation has become extremely slow,” Jia said. “For example, a month ago Apple launched the iPhone SE From an industry insider’s perspective, this is a product with a very low level of technology…. We think this is something they just shouldn’t have done.”

Simply put, Jia is stating what I’ve been saying for years, Apple continues to rest on its laurels when it comes to product advancement, choosing instead to offer incremental upgrades to basically the same device. While the American market continues to lap up Apple products like trained dogs, it seems Chinese customers are less willing to put up with such lacklustre innovation, particularly when there are so many better options on the market.

Of course we need to take Jai’s comments with a grain of salt; he is, after all, the CEO of a tech conglomerate that rivals Apple in multiple markets. In fact, while LeEco is best known as the “Netflix of China” for its popular streaming video service, the company’s diversified portfolio covers everything from smartphones, to TVs, to mountain bikes, and, most recently, autonomous electric vehicles. But that’s not to say that Jai is wrong in his assessment.

According to Jia, it’s not just that Apple’s products have fallen behind the rate of innovation and advancement we’re currently seeing the mobile market (at least in China), but that the company’s entire philosophy of mobile tech is antiquated, forever trapped by the company’s meteoric past successes.

“We think the difference between us and Apple is very large. Apple is a mobile phone company focused on hardware and software.” LeEco “is focused on the Internet first, and only then on software and finally on hardware. Apple only has individual apps. This was the right choice during the first generation of mobile net, when CPUs and the mobile network speeds were not fast enough. However now we’re moving into the next era of mobile Internet, these problems no longer exist. Moreover, having separate apps just means great obstacles in the user experience. We hope to break down these obstacles.”

By taking an Internet-first approach, such companies are then better able to expand into non-traditional tech markets, like the automotive industry for instance, where hardware is simply the platform for such Internet-connected technology, regardless of whether that platform is a hand-held device or a connected car. It is in this area of partnerships and hardware related to connected cars that Apple is truly struggling, as we’ve heard many major automobile manufacturers have walked away from the prospect of partnership due to Apple’s demands for control.

In fact, while Apple’s market isolationism, it’s focus on controlling all facets of mobile products in-house, and it’s refusal to embrace partners in a larger ecosystem may have worked for a time to make Apple a leader in mobile technology, by steadfastly maintaining such practices Apple has actually hindered mobile advance.

“We believe the next generation of mobile internet will be more open, more ecosystem oriented instead of being a closed loop…Ironically, Apple’s over-dominance, lack of internet-thinking and the closed off nature of its systems, all hindered innovation in the internet mobile industry,” Jia said.

In the end, Apple continues to exist as an island unto itself; occasionally ringing its bell and watching North American consumers come running like Pavlovian dogs. While such an approach worked wonders during the emergence of the smartphone age, it stands as a relic of a bygone era now, and as Jai insightfully notes, by clinging onto that way of doing things Apple is quickly becoming “outdated” and obsolete.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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