"Their earnings haven't increased in years."

I'd love to own more companies that have this earnings profile for the last eight years. They've gone from $14B in 2010 to over $48B last year. [1]

[1] https://www.statista.com/statistics/267728/apples-net-income...

Just because you have a hundred billion dollars doesn't mean it's worth spending it to try (and quite plausibly fail) to topple an entrenched competitor in a tangential line of business. Monolithic corporations are massively inefficient because the combination of wealth and bureaucracy is the recipe for waste. Let them give the money to shareholders -- isn't that why they were supposed to be in business? Then if it makes sense to invest the money in some other line of business, the investors will invest it in some other company doing that thing.

The fact is that smartphones are now a mature product. There will continue to be incremental improvements, but nobody is really expecting a future iPhone to be to the current iPhone what the original iPhone was to Blackberry. The market is now a cash cow. They have an existing technology and customer loyalty that they can milk for multiple years until increasing competition eats away at their margins, doing that is a profitable medium-term strategy, so that's a completely reasonable and expected thing for them to do.

They could invest their cash in some speculative technology and maybe get lucky, but so can their shareholders.

Apple makes more revenue and far more profits than Amazon, and a much higher percentage of those earnings come from products with AI baked into them--compare the iOS business to the Alexa business.

I'd be inclined to give more weight to your argument, but you've conveniently left off the part where Apple has used debt to buy back shares primarily because so much of their cash horde is held overseas due to the US's wonderfully archaic tax code...which has just been overhauled. I fully expect 2019 to see Apple re-repatriating large sums in order to pay down that debt.

You do make a couple valid points but on the debt side are wrong. The only reason they have such a high debt is due to USA tax policy on repatriation. This has now been removed with new law so what will happen is there prob will not be anymore borrowing anymore. The CFO even mention they will be cash-neutral. Net net Apple will have very negligible debt moving forward and def nowhere near the level it is today or your +$200B.

If you look back just a few years, Apple has responded multiple times to saturated markets by introducing new product classes. We don’t have iPods anymore for instance, now we have watches (even though at one point you could have argued that the music player market was full too). If phones really do start to lose steam, Apple should have plenty of opportunity to create a new interesting product.

And yet Amazon introduced Alexa before Apple did.

Alexa (Applexa?) could have been a natural Apple product. HomePod is clearly a catch-up, and not a particularly interesting one given that Alexa has already moved to built-in screens, and creating an AI home-hub in a variety of form factors, both big and small, is a trivial update now.

Alexa gives consumers utility/service computing without all the tragic time-wasting updater/installer/management nonsense forced on them by desktops, laptops, and (to a smaller extent) tablets and apps.

Cook's Apple has missed the point of this, which is the subtle but huge difference between consumer utility computing and content and hardware consumption computing.

Jobs was a genius at making everything fit together, and I suspect he was reaching for a utility strategy. The iPhone and iPad were the first generation of utility devices, while Siri was a first gen utility service. They were wildly impressive for their time, but still limited by elements of desktop legacy thinking - which is why we have to wait while apps launch and close, instead of just being able to do whatever we want to do.

Cook sells SKUs, not synergies or utility. I see no evidence that Apple is able to think of the future with a unified vision that doesn't involve selling things - even if those things are music and video content units - enhanced by some very constrained AI.

Right now Amazon is more of a synergy company than Apple. The aim seems to be total domination of retail, but there's going to be some overlap in services and in hardware too, and Amazon seem better placed culturally to innovate in ways that win that race.

The iPod was a catch-up product in a crowded music player market. The iPhone was a phone in a world of massive, dominating phone makers. Heck, the Apple II was a computer in an IBM-dominated world.

Apple is not “first” that often so who cares if they didn’t make an Alexa before anyone else?

Instead, Apple tries to get it “right” (and sometimes they still don’t but that is their strategy nonetheless).

Alexa has plenty of flaws. It is functional but not intelligent.

Well, in 2016 they spent > $10B on research. So clearly they're trying to catch up, it's just that they're not very good at it.

I agree, Apple is doomed. They always have been