Michael Wolff: The Age of Apple may be over

• Apple's once near-monopoly over smartphones and tablets is now under attack from strong competitors
• Its share of the tablet market is declining.
• For the company and investors the bet is now on CEO Tim Cook

How long do you get to stay on top?

General Motors had three generations; IBM two; Microsoft one.

Apple?

The Age of Apple began in 2005. Its price was $35 a share then. It kept going to $700, becoming the most valuable and influential company in the country, until September, when it began to fall. It's down about 20% now.

Its phone market, tablet market and content-selling business — iTunes — until recently practical monopolies, have become, as if overnight, hugely competitive fields. Management, in this strictly top-down company, is suddenly in dramatic flux. And, with its great map app debacle, Apple's customers are starting to rise up against its famous closed-system policies.

Apple's circumstance affects much more than just Apple shareholders. The technology business is all about dominance. It's a geopolitical sphere-of- influence game in which, at any given time, there are one or two superpowers, bullish, overbearing, imperial, demanding, dictating the shape of the industry and the possibilities for innovation in it.

The trick, on which fortunes are built, is knowing that a dominant position is cracking well before the edifice falls.

That's the existential question before the tech business: Is Apple looking at generational hegemony or a vastly more limited run?

Apple has always been a company whose brand can be at dramatic odds with its fortunes — a superb illusion. In its darkest days in the 1990s, its true-believer loyalists — even before Steve Jobs returned to rescue the company — fanatically maintained the myth of the company as the alternative tech brand. This was true even though its market share had shrunk the company to irrelevance.

The deification of Jobs as American hero moved Apple-ism from the tech community to Main Street.

When Jobs died, his mythic status rose and buoyed Apple's value, instead of highlighting the unique vulnerability of a one-man show without its star. Its iconic brand (possibly the world's most iconic brand), pervasive product suite, stratospheric value and vast cash hoard ought to be larger than one man, no?

Everybody believes in Apple.

And yet, befitting a company whose real genius is design (i.e. illusion), there is something ephemeral about its position. It has not so much created monopolies — the secret of generational success — as opened new markets for everyone. These markets — smartphones, tablets, digital content distribution — have become the dominant ones in the technology business. There's no place else for a big player to go. And in the case of phones and tablets, all you have, in the end, are fairly basic machines. It's a game of price and features and shrinking margin.

The smartphone market — until recently split between an ever-growing iPhone dominance, a stalwart BlackBerry and a divided Android field — is now, increasingly, an iPhone vs. Samsung world. The difference between one dominant player and a collection of would-be players and two clear alternatives is a vast one. Samsung's consumer electronics marketing clout — and its breathtaking advertising budget — is even large enough to go toe-to-toe with Apple's brand mythology and ubiquity.

Apple's absolute dominance of the tablet business is dramatically eroding, too. Its almost 60% share of the market at this time last year is now 50%. Samsung, with 6.5% hardly a player before Christmas last year, now has almost tripled its position to 18.4% of the tablet market.

ITunes, an always-kludgy system and hoary (and hated) monopoly, now struggles in a streaming world.

And now a struggle at HQ. The Kool-Aid effect among Apple stalwarts and the technology press has meant that the signs of internal turmoil at Apple, of an order that would put any other company under the media microscope, are seen as a natural transition.

But absent smoke and denial, this is a bloody battle: Scott Forstall, who has shepherded the iPhone business — that is, the business most central to the company — and who has been gunning for CEO Tim Cook's job, was ousted from his job running iOS software last week by Cook and replaced by Jony Ive, a Jobs and Cook loyalist. John Browett, who runs Apple's massive retail business, was also given the boot — Cook says he'll now be running that group. For the company and its investors, the bet more and more is on Cook. That's a vastly different proposition than a bet on Jobs. (Cook's peculiar aping of Job's black shirt and jeans ought to give everybody pause.)

And now a backlash against the products. It is an extraordinary part of the Apple marketing dynamic that a great number of consumers buy Apple while resenting it, too. Apple is a peer-pressure buy, often at the expense of functionality and, even, common sense. The underlying fury at Apple's authoritarian product control and disregard of its consumers finally broke into the open with its decision to abandon Google Maps.

Apple does what it does well, and then sloughs off everything else — like getting e-mail and actually making a call on the iPhone. Succeeding with that sort of hauteur and dismissiveness is awfully dependent on charisma and sex appeal, an expensive proposition in a commodified market.

The age of Apple should, reasonably, be a fleeting one. And this, in its way, is good news. Innovation happens in the technology business and new markets open when the mighty fall — often not until the mighty fall.

A short run on top is long enough.

Michael Wolff can be reached at michael@burnrate.com and on Twitter @MichaelWolffNYC.