Apple's inability to innovate beyond its current products and strategies, combined with its stagnant iPhone revenue, makes it unlikely for the company to succeed in new markets and adapt to changing trends, potentially leading to a decline
Questions to inspire discussion
Investment Strategy
🔍 Q: How are investors positioning themselves for the next five years?
A: Investors are focusing on big open-ended growth opportunities in AI and crypto, moving away from legacy companies and towards those with potential to become all-winners in the coming market dispersion.
💼 Q: What's the risk of investing in average S&P 493 companies?
A: With an average profit margin of 12% and single-digit growth, these companies face the risk of being decapitated by AI and crypto innovations, making them potentially risky investments.
Apple's Challenges
📱 Q: What's driving Apple's current revenue growth?
A: Apple's revenue growth is primarily driven by incremental sales of cables and accessories, not a long-term strategy, as iPhone sales have stalled.
🎧 Q: How does Apple's AirPods business compare to OpenAI?
A: Apple's AirPods business is two to three times larger than OpenAI, yet OpenAI is internally derided as small in strategy meetings, highlighting Apple's struggle to adapt to AI.
Industry Disruption
🚀 Q: Which companies are benefiting from AI and crypto disruption?
A: Companies leveraged to AI and crypto are experiencing significant growth and market success, while legacy companies are being left behind by forward-looking investors.
🔄 Q: How has Apple's management team adapted over the past decade?
A: Apple's management has transitioned from hardware sales to a recurring gross profit base, but this easier pivot may not adequately prepare them for the disruption of AI and crypto.
Key Insights
Apple's Strategic Challenges
🍎 Apple's revenue growth strategy relies on incremental sales of accessories like AirPods and cables, indicating a lack of long-term vision and innovation.
🎧 The AirPods business is 2-3 times larger than OpenAI, yet Apple's culture of derision towards smaller companies hinders innovation and strategic thinking.
Market Trends and AI Impact
🤖 The market is positioning for the next 5 years by investing in AI and crypto, recognizing that these technologies may create all-winners or winners-and-losers scenarios.
📉 With an average profit margin of 12% and single-digit growth, companies in the S&P 493 face significant risk from AI-powered startups like OpenAI or Grock.
Future-Oriented Companies vs. Legacy Firms
🚀 Extreme dispersion exists between companies leveraged to AI and crypto (e.g., Circle, CoreWeave) and legacy firms, with the former experiencing rapid growth post-IPO.
🔄 Apple's management successfully pivoted from hardware sales to a recurring gross profit base once, but faces a more challenging transition in the future.
#AllInPodcast
XMentions: @theallinpod @HabitatsDigital @chamath @friedberg @Jason @DavidSacks
Clips
-
00:00 💻 Apple's stagnant iPhone revenue and lack of innovative strategy beyond it means they have no chance of success in new markets.
-
00:38 💻 Apple's focus on short-term revenue growth through accessories and iterative product changes stifles innovation and makes it unlikely for the company to create something exceptionally groundbreaking.
-
01:48 💻 Apple's current wearable devices, such as the Apple Watch and iPhone, may already be sufficient for personal AI experiences, making new form factors like glasses or AI-powered devices uncertain.
-
02:48 💻 Apple's 17-year success makes it difficult for the company to retool and adapt to changes, making creative destruction a possible outcome.
-
04:00 🤔 Apple's Siri is severely limited in its capabilities, especially compared to Google's voice assistant, which can perform complex tasks with ease on devices like the Pixel 9.
-
04:55 📉 Apple's management team faces a big challenge as they shift from iPhone-driven sales, with performance dispersion among products like Mac.
- Apple's management team successfully transitioned their gross profit base from 90% iPhone sales to 40%, but faces an even bigger challenge ahead.
- The charts of Apple's performance are almost identical in terms of dollar basis and share price, indicating a dispersion in performance among its products, such as the Mac.
-
06:26 💡 The market is shifting focus from past performers to future-oriented companies leveraging AI and crypto, as investors seek to hedge against potential losses in S&P 493 companies with low profit margins and single-digit growth.
- 07:57 💸 Companies not adapting to trends risk being left behind as disruptors reap significant gains.
-------------------------------------
Duration: 0:8:22
Publication Date: 2025-06-25T11:40:20Z
WatchUrl: https://www.youtube.com/watch?v=2JOhIoTsy0c
-------------------------------------