Apple Inc. (NASDAQ:AAPL) is facing a break in innovation and is in need of another era of “creative leap”, like it has experienced in the past with successful gadgets like the iPhone and iPad, according to the company’s ex-CEO John Sculley.
“We’re in a period now where there’s kind of a lull in innovation so I wouldn’t expect to see a creative leap from Apple Inc. (NASDAQ:AAPL) for maybe a few years,” Sculley, who was at the helm of the company from 1983-1993, told CNBC on Thursday.
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“Now is the fast follower evolution decade – it’s a time where we’re not at a big breakthrough point in time, but where fast followers excel – so Samsung, an excellent fast follower is doing really well,” he added.
Apple should divert its focus more to the emerging markets in order to remain competitive in the technologically charged decade. The company should focus on emerging markets such as China, India and Southeast Asia where it has not been able to match with the rivals in smartphone sales.
For instance, in India, Apple Inc. (NASDAQ:AAPL) holds a mere 5 percent market share, compared to 40 percent of Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), which has been able to outperform Apple iPhone, due to its wide product portfolio in a wide price range. Apple will have to follow the strategy of designing and selling low cost smartphones to woo the emerging market consumers, according to Sculley who is a venture specialist.
“In Indonesia, you can buy smartphones for around $120, Apple sells a smartphone for $800,” he said.
Sculley said investors are “overreacting” by raising concerns over the 30 percent decline in the stock price of Apple over the past six month, and concerns over its product portfolio, supply chain and roaring competition.
Sculley when asked if the death of Apple Inc. (NASDAQ:AAPL)’s founder Steve Jobs has affected the company’s future capabilities to innovate said, “Apple has an outstanding management team – (CEO) Tim Cook is a great leader. [But] Tim Cook is not a product person, he’s a supply chain expert- probably the best in the world – but he has a great product person by his side and that’s Johnny Ives. I think the leadership team at Apple is impressive.” For the long run Sculley seemed confident about Apple and said the company is going to do fine.
In the annual general meeting of Apple Inc. (NASDAQ:AAPL) held on Wednesday, at least a third of Apple Inc. (NASDAQ:AAPL)’s shareholders did not support the company’s executive compensation after Tim Cook received a 51 percent hike in his salary last year, and equity rewards were given to other members of the management. There has been an increase in the percentage of its shareholders casting their vote on the proposed vote over remuneration. Around 83 per cent of votes cast backed Apple Inc. (NASDAQ:AAPL)’s “say-on-pay” proposal.