Apple is now making 20-year bets. It has to.

Modified on by Andrew Cohen

Apple logo, 20 year bets

Over the past few years, Apple haters have delighted in the fact that the company has not released a major new product line since the iPad.  “Apple can’t innovate without Steve Jobs,” the mantra goes.  “They’re dying.”

Yet recall that when Steve Jobs first returned to Apple as CEO in 1997, the company barely had 3 months of cash in the bank (and had to be temporarily bailed out by Microsoft).  Jobs was practically forced to release a new product line — the iMac — within fewer than 2 years of re-taking the helm, lest the company go bankrupt.  Apple’s short development cycles were a result of necessity and were made possible by setting more “modest” short-term goals.  And people got spoiled.

Things are a lot different now.  Growing hordes of cash reserves from the iMac (and soon after the MacBook and iPod) have allowed Apple to extend its R&D cycle many more years.  Indeed, Apple didn’t release the iPad until a full nine years after it first began working on it in 2001.  The recently released iPad Air represents a full fourteen years’ worth of iPad R&D.

Money in the Bank

With Financial Security, Apple is Thinking Long Term

Now that it’s 2014 and Apple has about $150 billion in the bank (8x the size of NASA’s budget), do you honestly think that their A-Team is rushing to release a cute new little revenue-earning product within a matter of months?  Do you think Tim Cook is fighting Carl Icahn’s dividend demands because he needs that $150 billion in cash to spend developing next year’s products?

Helllllz nah.

With such a fast-growing mound of cash, Apple literally has a responsibility to plan much more ambitious innovations for the long haul.  They need to be forecasting what the world will want in the year 2025 or 2035, and their Board of Directors knows it.  I have no doubt that Steve Jobs and Jony Ive spent many hundreds of hours formulating this multi-decade strategy during his final years.

So whatever groundbreaking new products Apple releases in 2014 or 2015, I plan to ignore both the fanboys and the haters.  I will rest assured knowing that Apple’s best years are way, way ahead of it.

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Elizabeth O'Driscoll 1 year ago

Apple just bought Beats for $3 billion- the best years are definitely still to come

Steven 2 years ago

This can also be said about other companies, planning for the future, but there is no doubt about Apple's stockpile of cash. Yes, I agree, Apple is long from dying. Great article! Google and others make the competition nice as well!

Mel Bradley 1 year ago

Apple designs devices that revolutionize the way we work and play; devices that other companies strive to match... but never quite do (e.g. iPod, iPad). The success of these products is likely a result of the extensive time and effort put into designing them, and this process is not rushed or restricted to a yearly timetable. I respect Apple for not putting out products before they are ready, and for spending an extensive amount of time researching and designing features and devices for the future. Apple is right to be making these 20-year bets!

Katharine Wilkinson 1 year ago

As an Apple fanatic, I find it refreshing that Apple has not been producing as many new models as before. What seems to be the issue is that the company is constantly trying to put out new concepts that have few changes added to them. The last iPhone added a somewhat faster chip and a fingerprint scanner, but neither of these concepts are truly ground breaking. However, as mentioned, Apple has billions of dollars under its belt, leaving room for new and exciting concepts. In fact, before Apple settled on designing the iPod, they considered building cars. I could only imagine what an Apple car would look like. It could be up to them to help spearhead the hands free car movement.

Romane Robinson 1 year ago

I think all companies are pressured to "innovate or perish", perhaps more so in Apple's case because the company's products have become standard at some institutions. These days, they say, "if you're a graphic designer/creative individual, you need a Mac". Additionally, when someone has an MP3 player, we tend to just call it an iPod without knowing if it actually is. Sort of a Xerox effect going on with their brand. That said, Apple once barely had their foot in the market, but their products have made a large splash in recent years with many students brandishing Macbooks (I'm in a room of other people and I'm the only one with a Windows laptop!). Apple has always been creative and stray from cookie-cutter models. Do they NEED to consider products into the future? Yes and no: I feel that, if Apple really needs the revenue, they can license their operating system to other platforms, but that's unlikely. They'll continue to raise the bar because it's in the company reputation, I'm sure.

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