In 1984, Apple (US:AAPL) ran an advertisement promising a revolutionary new computer. In the ad, the blue haze of Big Brother – an unsubtle reference to the then-incumbent computer giant IBM (US: IBM) – was blown to oblivion as the Macintosh saved humanity from technological conformity.
Shifting to a higher margin, more reliable services business model
Discontent among app store suppliers
Supply chain disruptions
Valuation overlooks challenges shifting to services
Increased competition in core products business
It heralded a changing of the guard atop the US technology industry. Apple took strides forward as an innovative computing pioneer. IBM – caught up in regulation and held back by its size – failed to keep up with the pace of change. Since the advert ran, IBM’s share price has trailed the growth of the S&P 500 by about 200 per cent while Apple’s share price has risen 1,000-fold.