Apple is currently the ultimate in cool. But can it last this time?

Last month I had the pleasure of giving a lecture to some post-graduate design students at the Pratt Institute in New York.  During a discussion about sustainability I was suddenly conscious that out of around 20 students, all of whom had their laptops open, only 2 had PCs whilst the rest had Macs.

This and the recent announcement that Apple had recently overtaken Microsoft in terms of Market Capitalization, (based on a better P.E. ratio rather than absolute revenue) sparked a discussion on which company had the more sustainable business model.  Interestingly whilst the majority owned many more Apple products and thought that Apple was a far 'cooler' brand, most of the students viewed Microsoft as more sustainable.

One reason given was that Microsoft has a broader portfolio including a significant share of the commercial IT market place.  Another that Microsoft satisfied a more basic need for its products whereas Apple relied more on an 'it' appeal for many of theirs - "I need a PC but I really want an iPad". With this comes a greater need for Apple to successfully innovate with fresh new ideas, which seems to be the basis of most of their current success.  Especially with the introduction of so many 'me toos', such as the Motorola Droid and the HTC EVO, and an increasing perception that Macs are overpriced.

But the general feeling in the class was that 'cool' is temporary and that Apple is always at risk of simply being a fad over the longer term.  Whilst this belies the fact that Apple was founded in 1976, only a year after Microsoft, it does conjure up a worryingly familiar pattern as after much early success with its cool antidisestablishment marketing in the early 80s, Apple performed badly in the late 80s and 90s, the same time that Microsoft grew to be the dominant player in the industry.  So is Apple now just riding a new populist wave that may fizzle and burn when they are inevitably no longer viewed as cool?   Or maybe real sustainability is indeed the art of reinvention, a challenge Microsoft has yet to face as software and hardware become increasingly converged.

Only time will tell but for now it seems while Apple may own the heart these students, Microsoft still holds their head.