Vox Tackles Apple's Structure: Why The Tech Behemoth Might Need To Update More Than Just The Mac

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Apple Inc. AAPL seems to be slowly streamlining its operation to focus on its core products.

Earlier this year, the company announced it would no longer make its own external displays; instead, it would partner with LG to offer Apple-approved displays manufactured by the South Korean company.

Now, Bloomberg has reported the tech behemoth has disbanded the division that makes wireless routers, and discontinued its Time Machine wireless backup disks.

Vox author Matthew Yglesias suggested, given the time past since the last Mac Pro desktop computer update, high-end users have also become convinced the company has left this market.

“Even Apple’s more popular laptop products show some signs of the same kind of neglect. The latest iteration of the MacBook Pro offers a number of impressive features, but it maxes out at a relatively low level of RAM, doesn’t offer many ports, and isn’t equipped with truly top-of-the-line internal chips,” Yglesias added.

If General Electric Company GE can be involved in so many industries, from aircraft engines manufacturing to financial services and medical devices, why can’t a company as large as Apple manage its relatively few product lines?

The answer is in the company’s corporate structure, Yglesias believes. Instead of being organized along divisions that take care of its diverse lines of business (the iPhone, the iPad, the MacBook), the firm relies on functional groups with particular kinds of expertise. So instead of a head of iPhone and a head of Apple Watch, there’s a chief design officer, a senior vice president of software engineering, and a senior vice president of hardware engineering, among several other similar executives.

While collaboration and the resulting synergies are desirable in any company, the lack of specialized roles make it much more difficult to manage a business and attribute responsibilities. This is what’s happening at Apple.

“The upshot is that even though regularly updating desktop Macs should not be that difficult, objectively speaking, it tends not to happen in part because it’s not anyone’s job to make it happen. The functional organization values collaboration on top corporate priorities above all else, and that means basically everything comes ahead of desktop Macs,” Yglesias explained.

On the other hand, this functional organizational structure has made it easier for the company to innovate and come up with amazing products like the iPod, the iPhone or iPad without fearing the cannibalization of resources or market share. And this has made of Apple the innovator it is today. Meanwhile, the more divisionally organized Microsoft Corporation MSFT continued to struggle in the mobile space.

However, Apple’s retreat from large and profitable markets like that of displays is "a clear sign of severe growing pains inside the existing structure. Apple is already huge, but it wants to be bigger. To get there, it may need to finally start acting like a big company."

The Vetr community has a 4.0 Stars (Buy) rating and $120.88 average price target on shares of Apple and a 3.5 Stars (Buy) rating and $63.59 price target on shares of Microsoft.

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Posted In: OpinionTechMediaVetrVox
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