Apple's most recent earnings report was the best in corporate history. Not just Apple's history -- but literally the history of the world. In total, it earned $18 billion profit, primarily from the 74.5 million iPhones and 21.4 million iPads it sold.
It's true that Apple's success has, at times, come at the expense of others. The rise of the iPhone and iPad have taken a toll on the competition. Yet, it wasn't always clear these products would succeed. Shortly following their introductions, both devices had their detractors and naysayers -- many of whom were the CEOs of companies that Apple's products eventually devastated.
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Their shortsightedness proved toxic to shareholders, and in some cases their own careers, and stands as a cautionary tale of what can happen when firms don't recognize the potential of a disruptive new competitor.
"That's overstating it"BlackBerry shares have lost almost 95% of their value since the original iPhone made its sales debut in late June 2007. Apple's handset instantly attracted consumers and eventually business users, which destroyed the market for BlackBerry's products in the process.
In retrospect, Apple's destruction of BlackBerry seems obvious, but it wasn't clear to everyone at the time. Following its introduction, Jim Balsillie -- then one of BlackBerry's co-CEOs -- dismissed the iPhone as just one of many competitors (via Reuters).
Sure, BlackBerry is still selling handsets -- 1.9 million last quarter-- but it has become virtually irrelevant. Its current CEO, John Chen,has done an excellent jobat turning around the company's fortunes, but has recently stooped so low as to argue that app creators should be legally obligated to support its BB10 platform.
"A bigger iPod touch"Like BlackBerry, Nintendo shares have plunged since the introduction of the iPhone. From Nov. 2007 to now, Nintendo's stock is down more than 80%.
To be fair, that wasn't strictly Apple's doing, but the rise of iOS-based mobile games has certainly taken a toll on sales of Nintendo's dedicated handheld gaming consoles. Its Nintendo DS, released in 2004, was one of the best-selling video game consoles of all time, moving more than 150 million units over the course of its life. Its successor, the 3DS -- released in 2011, a year after the iPad's introduction -- has only sold one-third as many units. Meanwhile, mobile gaming is more popular than ever.
Nintendo's CEO, Saturo Iwata, was asked about Apple's iPad following its introduction in 2010. Iwata dismissed the device as simply "a bigger iPod touch" (via Slash Gear). While he wasn't completely wrong, that didn't stop the iPad from stealing a large portion of Nintendo's handheld player base.
The iPhone lacks "appeal"But the most erroneous prediction of Apple's products came fromMicrosoft's Steve Ballmer, who went so far as to laugh at the iPhone.
Like Iwata, Ballmer's criticism wasn't completely off base -- Apple was forced to cut the price of the iPhone rapidly following its introduction, and it didn't sell in record numbers until its subsidized price was under $200 -- but his outright disdain for the concept is notable.
Microsoft's stock has held up since the iPhone's introduction, but the device (and the resulting shift to mobile computing) catalyzed a number of sweeping changes at Microsoft, such as its decision to get into hardware and the design of Windows 8. It broke the long-standing Windows monopoly by popularizing other operating systems, and it may even have prompted Ballmer's departure from the company, as his inability to recognize the iPhone's potential led to Microsoft missing the mobile revolution.
Bonus: "Designed by students"It's too early to say if this last one will fall into the same cateogories as the other three, but already, Apple Watch has solicited a similar response. Jean-Claude Biver, the head of LVMH's watch division, trashed the Apple Watch shortly after its introduction (via The Telegraph).
Biver did not mince words. Ultimately he may be right -- or he may wind up in some unfortunate company. Only time will tell.
A lesson for investorsObviously, entrenched competitors are unlikely to admit that their business models are about to be upended, but these quotes serve as a potent reminder that the competitive potential of a revolutionary new product is rarely recognized or appreciated at the time of its unveiling. Some may see the lesson as a unique attribute of Apple -- no company has been quite as disruptive in recent years -- but investors should be cautious of any firm whose management is outright dismissive of new competition.
The article 3 Quotes About Apple, Inc. That Seem Absurd Today originally appeared on Fool.com.
Sam Mattera has no position in any stocks mentioned, but hasunfortunatelydoubted Apple himself in the past. The Motley Fool recommendsApple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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