Apple Isn't a One-Hit Wonder

Of course Apple (Nasdaq: AAPL  ) isn't forever. But is it really the next Iomega? That's what my Foolish friend Rick Munarriz thinks. I think he's already had too much eggnog.

That's what we in the biz call a "one-hit wonder"
Comparing Apple to the no-longer-independent Iomega is like comparing The Beatles to A Flock of Seagulls, or Men Without Hats. Sure, both bands had chart-toppers like "I Ran (So Far Away)" and "Safety Dance," but do you really care about anything else either of them did? Not likely.

The Beatles by contrast, have sold more than 500 million records and are the best-selling band of all time. Yeah, I know, John Lennon actually did do that "Two Virgins" audio experiment with Yoko Ono; it wasn't a nightmare. And, yes, the Magical Mystery Tour movie wasn't exactly a smash. But doesn't that pale against the rest of the band's pure platinum body of work? Of course it does.

Behind the music: Iomega
Which brings us back to Iomega, the classic one-hit wonder of the business world. Rick says it perfectly:

Iomega's stylish cobalt blue Zips were elegant and functional. With superior storage capacity to floppy diskettes, it became an essential PC accessory. Tape storage rival SyQuest tried to make its mark in the niche, but it was too late. Iomega was gobbling up market share and all of the style points. We all know how it ended. Zip ultimately handed the baton to CD-Rs, flash memory cards, and USB drives.

Exactly. Iomega had other products -- still does -- but none of them ever took off the way the Zip Drive did.

Now, shall we run through Apple's string of chart-toppers? Allow me:

  • The Apple II, which helped to define the personal computer.
  • The Macintosh, which ... Well, you don't need me to say anything more here, right?
  • The Apple LaserWriter, which, when combined with Aldus PageMaker software, birthed the desktop publishing industry.
  • The iPod, which, when combined with iTunes, transformed Sony's once-iconic Walkman into a distant memory.
  • Mac OS X, which was born out of elements of the NeXT operating system built by the company CEO Steve Jobs left Apple to found in 1985.
  • The iPhone, which was the world's second-best-selling smartphone during the third quarter. (Brrrrrrrring! Profits calling!)

Of course, Apple has had its blunders too. Take the Mac Cube. A cult hit in later years, it proved to be a weak seller at launch and was canceled after just a year on the market. The Pippin gaming system had already lost out to platforms from Nintendo and Sony (NYSE: SNE  ) by the time of its U.S. launch in 1996. And while it's future is debatable, there's no doubting that Apple TV has done little, if anything, to diminish enthusiasm for TiVo and Netflix (Nasdaq: NFLX  ) .

The barbarians named Gates and Ballmer
What about Microsoft (Nasdaq: MSFT  ) , you say? Yes, the original Mac OS never took off the way it was supposed to during the '90s. However, Microsoft's OS victory likely had more to do with partnerships than technical superiority.

Certainly Bill Gates, Steve Ballmer and team did a brilliant job of wooing developers to Windows. And partnering with Intel (Nasdaq: INTC  ) made it easy to propagate its "Wintel" platform via IBM (NYSE: IBM  ) , Dell (Nasdaq: DELL  ) , Compaq, and other PC makers. Apple might have done better had it chosen to open the Mac OS to outsiders sooner.

Or not. Today, Windows is decades old and, as a consequence of its popularity, maintains aged code so that old software -- some old software, anyway -- can run on the newest versions of the OS. Apple doesn't have that problem and thus has been able to rebuild the Mac OS time and again, emphasizing innovation over aging bits. Market share gains have followed. (Though, to be fair, Apple's Rosetta Stone utility has played a part by assisting older Mac software in operating on today's binary code systems.)

Mr. Epstein, meet Mr. Jobs
Aside from the dark years when Jobs was away, Apple has been a consistent chart-topper. The next Iomega? Only if you think of Jobs as David Bailey or David Norton, Iomega's successful but mostly anonymous co-founders. His record, however, is much more like legendary Beatles manager Brian Epstein.

You're welcome to bet that he doesn't have another hit in him. Just don't ask me to.

Microsoft, Intel, and Dell are Motley Fool Inside Value selections. Nintendo, Netflix, and Apple are Motley Fool Stock Advisor selections. The Fool owns shares of Intel. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Tim Beyers had wavy hair and thick glasses during the 80s. Today, he has stock and options positions in Apple and a stock position in IBM. He's also a member of the Rule Breakers team. Find Tim's portfolio here and all of his Foolish writings here.

The Motley Fool's disclosure policy can dance if it wants to. It can leave Wall Street behind. Because brokers don't dance and if they don't dance, well, they're no friends of mine.


Read/Post Comments (4) | Recommend This Article (13)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 04, 2008, at 1:01 PM, BMWTwisty wrote:

    Wow! Splendid job of rebutting an idiotic premise. Nice work!

  • Report this Comment On December 04, 2008, at 3:12 PM, Shagghie wrote:

    Wait, which 'one hit' was that guy even referencing in the first place? The iPhone? The MacBook Pro? The Mac Pro? The X-server? The iPod Touch? iTunes?

    Oh, wait....my bad. That's already more than one 'one hit' wonder.

    And that's just right now at THIS slice of time... if you only just follow the patent filings they've made these last 4 years, and if only 5% of those filings come to fruition, Apple will be making 'one-hit' wonders well into the 21st century. The best designers, on planet earth, quite *literally* now work for Apple...there's more design talent there than at Ferrari, Sony, and Mercedes combined...

  • Report this Comment On December 05, 2008, at 5:33 PM, l3iodeez wrote:

    "The best designers, on planet earth, quite *literally* now work for Apple."

    This is an unsupportable statement and is worthless for any kind of real analysis.

    The one hit that he is talking about it the iPod, which brought Apple back from the brink of the abyss.

    Apple is not a one-hit-wonder however, they have used the iPod to catapult an extensive marketing campaign for all of their products, and have used it to build an image of hip, new, youngness with white plastic. Will this novelty really last once they have a decent market share and Macs are under the constant attacks faced by Windows computers? Especially the iPhone, lax user habits and widespread use make it a prime target for hackers. Even with the tight controls on what applications can be installed, I think we will see more and more security problems for all of Apple's products as they become viable targets for hackers.

  • Report this Comment On December 07, 2008, at 5:08 PM, hanlen wrote:

    As popular as this is going to be with all of apple's frothing hissing denial zombies, I have to say something to at least try to prevent Mr. Byers, one of my role models, from making a small f fool of himself. Nothing like dropping some water on empty oil heating by itself.

    The Beatles? Only the beatles? They only revolutionized culture, and brought the entire world into the modern zeitgheist. Don't you want to go a bit broader in your comparison? Why not compare Apple to the French Revolution? Or Classical Greece? Perhaps the invention of Fire?

    Here's a quick recap of Apple's "achievements".

    The Apple II, which helped to define the personal computer.

    Uh, I was there. I remember buying something called Pineapple because I couldn't afford an Apple. I remember the stance:

    "Here are your purchase options: You will pay the premium because we're beautiful and elegant or you can just go and sulk in loserville."

    Oh, and that was a different Steve, he's not with Apple anymore.

    The Macintosh, which ... Well, you don't need me to say anything more here, right?

    Yes I do Tim. They stole that from PARK Zerox, then sued Microsoft for stealing it from them, and lost. But in the interim, they taught me why windows was worth sacrificing my soul and dignity. At least windows had enough buttons on the mouse to do SOMETHING!! (And by the way, in case you're curious, microcrap didn't steal anything, they don't have the intelligence or finess to aspire to theft, they simply bumbled and stumbled into the space after Apple said to the manufacturers: "Here are your purchase options: You will pay the premium because we're beautiful and elegant or you can just go and sulk in loserville.")

    The Apple LaserWriter, which, when combined with Aldus PageMaker software, birthed the desktop publishing industry.

    What!!!

    The iPod, which, when combined with iTunes, transformed Sony's once-iconic Walkman into a distant memory.

    Granted. Apple developed the iPod. Wonderful! That's one hit. Somebody hold the count for me. One so far.

    Mac OS X, which was born out of elements of the NeXT operating system built by the company CEO Steve Jobs left Apple to found in 1985.

    Mac "OS" X is a layer of fingerpaint over BSD UNIX, the real Beatles of technology. Apple has never developed anything more sophisticated than a color theme. An operating system? Give me a second to catch my breath. I think I had an accident, warn me when you're about to do that.

    The iPhone, which was the world's second-best-selling smartphone during the third quarter

    Well, Apple took a phone and made it expensive. I still don't see what they invented here. Hey by the way what else happened during the third quarter? I know this one I know this one! The world ended. Yeah, people are stocking up on canned food. And here's all these smart phones (thanks for finding the new consumer weakness Steve, you're a king among ferrets) that cost about as much as a smart phone should, and Apple is facing

    down the starving throngs with, what else? "Here are your purchase options: You will pay the premium because we're beautiful and elegant or you can just go and sulk in loserville."

    And some of those cheap phones still found a way to have buttons, by the way.

    But my favorite iPhone observations is that Google is launching a phone based on open standards. Just like microcrap did all those years ago when Apple first found a way to seduce the first victims with the fist pc. Some things change, and some things stay the same.

    Nice mention of Apple's failures, let's just not bother counting them all or keeping score, just don't forget to mention Newton, Apple worked hard for that one.

    The Beatles Tim? Really?

    If you are determined to credit Apple with any intentional repeat success, may I make an alternate suggestion? There's a pop icon who had a lot of hits, made a lot of money, and made subsequent generations of consumers weaker, stupider, and poorer.

    Yeah I'm talking about Madonna. Every time the latest generation of pre-teens faces the inevitable moment of agonizing realization that their idol and lifestyle guru has led them to beliefs that are sickening, weakening, and no longer fun, she reinvents herself to become the parasite of a "new generation of pop". Woman has an IQ of 200. Used to be a high profile vegetarian. Hmm. In fact, now that I think of it, I have never seen Madonna and Steve Jobs in the same place at the same time, have you?

    But the analogy only goes so far. Madonna's fans do eventually mature to a realization that she is not a victimless waste of their money.

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