Ask Paul: May 23 (Premium)

Well, that was quite the week. But we have a three-day weekend to recover. And I don't know about you, but I need it But first, another great set of reader questions. You're all wondering about the same things I am, and that makes sense. But we do live in interesting times.
? Mr. Mojo Risin'
David-Fake asks:

Has Apple kind of lost its mojo? Don’t get me wrong, the iPhone is an undeniable juggernaut and they are the only company that makes a tablet worth buying…but, they have had a lot of failures and abandonware/vaporware recently. I am not an Apple hater but I have to think back to 2013 and the “can’t innovate my ass” quote. Kind of…

P.S. Apple remains the, or one of the , most valuable companies in the world. So there is that.

I just finished a book called Apple and China: The Capture of the World's Greatest Company that I'll be writing about soon. It's the best business book in maybe a decade and the first to dive deep into Apple as a company in the modern era. It's incredible. Like the recent book Careless People: A Cautionary Tale of Power, Greed, and Lost Idealism, which is about Facebook/Meta, it explains how this company not only bowed down to the totalitarian regime in China but in fact gave the country the tools it needs to defeat and then obsolete U.S. technologies. In this case, enabling companies like Huawei and OPPO to make technically superior smartphones. Apple is so central to this, I feel that it's literally treasonous. But I'll get to that when I write about that book.

For now, I'll just say that Apple had a historically unique run of success from the iPod to the iPhone and, to a lesser degree, to the iPad, and that it was inevitable that future hardware products would experience diminishing returns. Apple Watch is successful but has a lower ceiling than iPad and Mac, which have a much lower ceiling than iPhone (units/revenues, however you care to measure these things). Same with AirPods, Apple TV, Vision Pro, and whatever other devices. To keep growth going, it has expanded into services, which are higher margin and dependent on the iPhone as a halo product. And it has demanded ever more efficiency/higher margins from the human rights-abusing factories and supply chains in China, while looking the other way. It cannot make the iPhone or anything else anywhere but China. Everything in the iPhone comes from China. You can assemble the thing in India, I guess. But that phone and all its components are not coming from India, ever. Or the US. That is laughable.

But in some ways, looking to Apple to make another iPhone-level success is unreasonable and unfair, this is a once in a lifetime-type halo product, like Windows was for Microsoft. But that's what we do. The key to Apple's reputation is its routine way of delighting customers, whether it's through adding unique value to existing products or cross-device experiences, or whatever. You open a box and it's amazing. They're really good at this.

The failure...