There seem to be three viable explanations for what's happening to Apple:
1. The government is about to change the tax laws. This is causing investors to sell now before they get hit with new taxes.
3. We are now in the post-Steve Jobs era, and innovation at Apple is dead.
Of these three, the last one is the one I'd like to tackle here. The other two — iPhone demand and tax laws — will be addressed in January when Apple reports earnings, and the government finally figures out what it's doing.
I think it's insane to say innovation is dead at Apple. And people like our own Nicholas Carlson are embarrassing themselves when they lump Apple in Yahoo and RIM and HP as a company that is "past its prime."
The idea that innovation is dead at Apple now that Steve Jobs is gone is a lazy, but common argument. It's impossible to disprove in the short term. It's also helped by the fact that most people see Steve Jobs as an infallible visionary, while overlooking his flaws and misjudgments that were corrected by other Apple execs.
For instance, according to his biography, Jobs didn't want to make the iPod Windows-compatible. All of his top executives wanted to make a Windows-compatible iPod to increase sales, but Jobs didn't want to do it. He forced them to bring in experts and build business models to prove it would help Apple. After months of fighting, Jobs finally backed down, telling his team, "Screw it, I'm sick of listening to you a**holes. Do do whatever the hell you want."
This was obviously the right decision. It led to a surge in iPod sales, which led to an increase in Mac sales, both of which paved the way for the iPhone and iPad.
This wasn't the only time Jobs' top executives overruled him. When the iPhone was first released Jobs opposed making a third-party app store. Phil Schiller, Apple's SVP of Marketing was in favor of an App Store. After the phone was released, Jobs gradually eased his opposition.
There are other examples of Jobs whiffing. He was more right than wrong, and almost always ended up making the right decision. But, my point is that Jobs, for all of his greatness wasn't perfect. He was greatly aided by Apple's other executives, many of whom are still at the company.
And, going forward, Apple will be great but not perfect. And those flaws will be magnified because critics want to believe innovation is dead at Apple now that Jobs is gone.
But, let's look at the recent history of Apple.
In 2007, it released the iPhone. This changed the world of technology forever, and everyone quickly scrambled to copy its best features.
Three years later, in 2010, it released the iPad, which totally changed the PC-industry. Rivals are once again scrambling to catch up and thus far they've come up short.
And so here we are, coming up on three years since the iPad.
Apple just released the iPad Mini, which by all accounts is selling very well. It updated its desktop and laptop line up. It has a new iPhone.
And that's not enough because those are updates to existing products. People still think innovation at Apple isn't a guaranteed thing anymore.
You could argue that Spotify is killing iTunes. But guess who thought consumers would hate the Spotify model? Steve Jobs. In 2007, he said, " Never say never, but customers don't seem to be interested in it ... The subscription model has failed so far ... People want to own their music ."
You could also argue that Dropbox is doing something that Apple needs to do. But, Apple knows this. That's why Jobs tried to buy Dropbox. When Dropbox refused to sell, Apple introduced iCloud, which while flawed, shows Apple is aware of its shortcomings.
Is Apple really past its prime? If you consider the release of the iPad and the iPhone to be its peak, then yes. I've fallen into that trap, arguing that no company will ever release a run of products like the iPod, iPhone and iPad ever again.
But when Apple releases a television next year, pretty much right in line with its three-year cycle of upending traditional tech businesses, then we will all have to revise our thinking. Apple will not have peaked. It will be in the middle of an unbelievable prime that altered, and hopefully, improved all of the gadgets we spend the most time with.
More From Business Insider