Why America Needs Apple

  • Share
  • Read Later
Mike Segar / Reuters

Apple's iPads and iPhones are displayed inside an Apple store in New York City on Dec. 7, 2011

I was having a discussion with a few executives at a technology summit I was attending, and an interesting question was asked to me concerning what America would look like without Apple.

They asked me about this since I do quite a bit of Apple analysis as a part of my overall industry analysis for our clients, so I gave the question my best on-the-fly answer. But the more I thought about it, the more interesting the question became.

Now of course we can point out all the many ways Apple has been important to the technology industry at large, but I think that looking at the question as it relates to America is an interesting theme. Therefore, I’ve decided to focus my column this week on this question of what Apple has meant to America and why America needs Apple to keep doing what it’s doing.

Apple Drives Economic Growth
One of the most fascinating things from an economic point of view happened during this most recent recession: Apple posted quarter-after-quarter growth and record-setting revenue numbers. When it comes to the U.S. economy, Apple has been of the few bright spots lately, which has provided hope for many.

During this past recession, as well as the one that happened after the dotcom boom, Apple didn’t sit still. The company innovated through both, launching two new categories of products that came directly as a result of research and development spending. Those products were the iPod and the iPad.

(MORE: The iPod Turns 10: How It Shaped Music History)

Another interesting thing to look at it is what America’s corporate earnings would look like at large without Apple. In the fourth quarter Apple gave the S&P 500 a significant boost: S&P 500 companies grew at about 6% year over year. If you take Apple out of that equation, the growth would drop to 3%. Many financial-analyst notes I saw mentioned this, pointing out that the S&P 500 was basically rescued by Apple.

Granted, it took a lot more than Apple to bring about the economic recovery we have started to see recently. But many economic experts and financial analysts agree that the recovery would not look as bright if it wasn’t for Apple.

There’s another interesting point that I think often gets overlooked on this topic: how Apple has basically reinvigorated the software industry for computers. It’s done this by way of apps, but to some degree it’s happening with desktop and notebook software as well. According to Apple’s own estimates, looking at the iOS app economy, this new industry — iOS design and development — has created 210,000 jobs and growing in the U.S.

(MORE: Why Technology and Innovation Are Critical to America’s Future)

I witness this every day when I see new start-ups that are focused on creating apps and solutions for Apple products being funded. Before Apple launched its apps environment for the iPhone and iPad, the PC software industry was in decline and the Internet software industry was mostly focused around creating websites for companies and e-commerce. Now, the creation of software for iOS, Android, Windows Phone, along with new versions of Windows and HTML 5 apps, is at an all-time high. We can’t keep up with the number of software engineers needed to fuel this insatiable demand for new apps and app-related services.

This reinvigoration of the software-development world, which Apple is responsible for, has inevitably led to more jobs than those focused on iOS. There is an app economy for Android and will inevitably grow around Microsoft’s platforms in Windows 8 and Windows Phone. This reinvigoration is very good for the U.S. as well as other parts of the world.

Technological Competitiveness
As important as Apple has been to the broader economic market, I think the most important way that Apple has benefited America is in terms of technological competitiveness.

Apple has been incredibly important — especially over the past decade — to America’s competitiveness in terms of global technology leadership. The iPod initially kicked off this trend, but the iPhone is the device that really set it in stone. A report came out from Nikkei in Japan highlighting the fact that Apple is now the No. 1 consumer brand in Japan. Apple is expected to continue to garner more than half its revenue from other countries. The reality is that some of the most-desired consumer-technology products globally come from Apple, a company founded and based in the U.S.

(MORE: No Turning Back: Tablets and the Era of Touch Computing)

There was a period of time where America was viewed as being behind other parts of the world — Asia and Europe in particular — in terms of cellular technology. We had slower networks, less flashy devices and seen by all industry observers, we weren’t even close to a leadership position. Then the iPhone hit the scene and truly created a new class of smart devices.

The iPhone effect spurred network operators along to invest in new network technology to handle the next generation of devices. This led to accelerated adoption of 3G and now 4G networks. There are still parts of Asia with much faster cellular-data networks, but America is rapidly catching up and no longer viewed as well behind the curve by industry observers.

With as much impact as the iPhone has had in terms of America’s competitiveness in regards to smart devices and next generation networks, the iPad is just getting started. The iPad represents one of the most exciting new categories of computing — one being led and currently dominated by Apple. Every computer maker from every part of the world is interested in this category and looking to compete in it. The iPad is changing how people in every part of the world work, learn, play and use computers. This single product is redefining mobile computing, and it came from a company based in the U.S.

Smart phones and tablets are the two fastest-growing categories in all of computing. If Apple hadn’t been in the picture to raise the bar in those two categories, I think you could make an extremely strong case that the devices of tomorrow would be imported instead of exported.

(MORE: Four Industries Apple Can Disrupt in the Near Future)

Bajarin is the director of consumer-technology analysis and research at Creative Strategies Inc., a technology-industry-analysis-and-market-intelligence firm in Silicon Valley.