Bulgarian academic slams Apple's business model

A Sofia University lecturer and the CEO of a Bulgarian software outfit has issued a stinging attack on the business model of the fruity cargo-cult Apple.

Speaking to TechEye, Steve Keil said that it made absolutely no sense that Apple’s brand was worth more than half its market cap.

He said that it was idiotic and analysts and investors are crazy to allow the idea that Apple’s brand is worth $154 billion to become common currency.

However Keil, who is seen as an IT business guru in Bulgaria has strong views about the state of Apple’s business model which he describes as “out of date”.

He said that Apple was trying to impose artificial scarcity on the “relatively boundless ecosystem of digital distribution” through its 30 percent cut of all subscription revenue.

“Leave alone their outdated model of “planned obsolescence,regardless of their size, profiteering, or giving a shit what Wall Street wants, Apple is illustrating a lack of understanding for long-term growth,” Keil said.

It was more important for a firm to be worried about value creation and actual impact on people’s lives. Apple was all about t-shirts, fancy painted factory floors and white plastic.

Sooner or later people are going to realise that giving Apple 30 percent just to re-distribute content that is already in a digital format is a poor business choice.

Keil said that Apple’s entire history has not been without value. In the beginning it did do some good things.

“Lately all they’ve really done is convince a bunch of people that Apple itself is cool, and that if you identify with the Brand of Apple, you can be cool too,” he said.

He said that what Apple has done is further disconnect people from society. The 30 per cent cut makes it much difficult for artists, writers, and producers of content to be marginalised for the profits of Jobs’ Mob.

Keil said that Apple was thinking short-term, by sucking out all the profit for the people who actually create value.

“What they are really doing is providing incentives to stop creating the very content Apple is trying to profit from in the first place,” he said.

Long-term, this will reduce the amount of content worth paying for, and thus the need for a stupid iPad v8.

He said that Apple is illustrating a lack of understanding, about the communities that create value, its own employees and the company’s long-term sustainability.

Keil said that Jobs was ignoring one of the great gurus of the Free Market, Adam Smith who, in his Theory of Moral Sentiments, pointed out that people are not merely selfish utility maximisers, but must act according to conscience.