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The last time I visited an Apple store, I reckoned that probably more than half of the customers were half my age. This is an improvement (from my perspective) on the previous visit, shortly after the launch of the iPad, when it seemed to me that two thirds of the customers were not spending their own money but their parents', or wished that they could.

The point of this is not my age but the difference between innovation and marketing. In the past Apple has been a success at both skills but today it is being hung out to dry by analysts and brokers who fret that the company's previous rapid rate of expansion has come to an end.

The company has been lagging the aggressive forecasts of iPhone sales and revenues made by Wall Street analysts and it is talking down the margin expecations too. Part of the problem is the inevitable slowing in the expansion of a colossus. Only a year ago Apple's rate of growth was more than 70 per cent so a moderation to 18 per cent is perfectly in order. But the question on Apple watchers' lips is not "what is a sensible rate of growth for a maker of electronic gadgetry?" but "what clever thing is Apple going to invent next?"

These people think that Apple has become very big and profitable by inventing stuff. This is nonsense; Apple's success was built on improving existing inventions like the graphical user inteface-style operating system and the portable digital media player, and more importantly, making them attractive to the masses. Under Steve Jobs, Apple became a brilliant marketing machine. It convinced many millions of people to buy not because its products were useful or clever but that they were deeply desirable.

Apple's success in marketing its image is the phenomenon; the iPad is just a smaller and slimmer computer. Another interesting question is whether any of these technology companies, including Microsoft, will survive the course, by which I mean, last a century. Will they have the longevity and continuing strength of an ExxonMobil, a Procter & Gamble or a GE? All of these companies innovate to a greater or lesser extent but making new stuff is not their raison d'etre. They are masters not of technology but of the market. Henry Ford did not invent the motor car; he made you want to have one, and he made it possible.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 4:00pm EDT.

SymbolName% changeLast
AAPL-Q
Apple Inc
-1.06%171.48
GOOG-Q
Alphabet Cl C
+0.21%152.26
MSFT-Q
Microsoft Corp
-0.17%420.72
PG-N
Procter & Gamble Company
-0.22%162.25

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