Apple has shed nearly $1 trillion in market value in just half a year. iPhone sales are slipping, revenues are stagnating, and market share is shrinking across its strongest territories — the U.S., Europe, and China. For the first time in two decades, a serious question is surfacing: Is Apple beginning to decline?
The warning signs look eerily similar to another tech empire that once ruled the world — IBM. Understanding IBM’s meteoric rise and steep downfall may hold clues to Apple’s future.
IBM’s Rise: The Giant That Shaped Computing
In August 1981, IBM reluctantly entered the home computing market with the IBM PC. Until then, IBM’s strength lay in massive, room-filling machines sold to corporations and governments. Personal computers — then called “microcomputers” — were seen as risky and unworthy of a behemoth like IBM.
But one engineer, Don Estridge, pushed for change. His solution was radical: build the IBM PC with off-the-shelf parts — Intel processors, Microsoft DOS, and components sourced from other firms. This strategy slashed costs, creating a mass-market computer accessible to families, hobbyists, and small businesses.
The gamble worked spectacularly. Within two years, IBM controlled 70% of the global PC market — an almost unthinkable dominance. At its peak in 1985, IBM employed over 400,000 people, earned $6.5 billion annually, and seemed untouchable.
Estridge, the man behind the success, became a vice president at IBM and even turned down an offer from Steve Jobs to lead Apple. Tragically, he and his wife died in a plane crash that same year.
But as IBM soared, cracks began to show. The very openness that fueled IBM’s success allowed rivals — Compaq, Dell, Gateway — to build cheaper clones with identical capabilities. IBM had no moat, no proprietary lock. The clones eroded IBM’s market share, and by the 1990s, the empire collapsed. By 2003, IBM had exited the PC business entirely, selling the remains to Lenovo.
Apple’s Position Today: The Echo of IBM
Fast forward to today. Apple’s dominance also rests heavily on consumer hardware — iPhones, MacBooks, iPads, Watches, and now the Vision Pro. Their ecosystem is famously tight, unlike IBM’s open architecture, but the parallels are hard to ignore:
- Growth has slowed — Analysts project just 2–4% revenue growth in upcoming quarters, compared to double-digit gains at Microsoft and Meta.
- iPhone demand is faltering — Sales are down nearly 2% globally, with steeper declines in Europe and China. Even the U.S., Apple’s most profitable market, is showing early signs of weakness.
- Other devices are struggling — Mac sales rose 21% in 2025 but stagnated in the U.S.; iPad share has slipped from 37% to 31%; Apple Watch shipments have been in freefall, down nearly 30% over two years.
- Brand perception is shifting — Once the symbol of luxury and innovation, Apple is increasingly viewed as overpriced rather than premium, especially in China.
Services: Apple’s Lifeline — or Its Trap?
To counter slowing hardware sales, Apple has poured energy into services: iCloud, Apple Music, AppleTV, Apple Arcade, and now Apple Intelligence, their AI push. Services are enormously profitable, with margins as high as 73%, far above hardware’s 37%.
But here lies the catch: unlike Microsoft or Google, whose software runs on nearly all devices, Apple’s services are tightly locked to its hardware ecosystem. If iPhones lose ground, the App Store, iCloud, and Apple Music lose with them. Apple’s moat, the “walled garden,” could also be its cage.
Meanwhile, competitors are racing ahead in AI and cloud: Microsoft with ChatGPT, Google with Gemini, and Meta with its massive AI talent push. Apple’s AI is powerful — but limited to Apple devices.
Is Apple the Next IBM?
IBM didn’t collapse overnight. It shifted to B2B, reinventing itself in cloud and consulting, but only after losing its crown in consumer tech. Apple may not make the same mistakes — they protect their IP fiercely and run one of the most profitable service ecosystems ever built. But their dependence on hardware echoes IBM’s fatal flaw.
Incremental updates to iPhones, iMacs, and Watches may not be enough to spark another growth wave. Vision Pro is ambitious, but remains niche. The brand that once defined innovation is at risk of being seen as stagnant.
The real danger? Apple’s strength has always been status. But if consumers begin to view Apple not as premium, but as overpriced, its greatest intangible advantage will erode.
Apple isn’t going anywhere in the next decade. But over 20 or 30 years? The cracks are already visible. IBM was once untouchable, too.
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