FC NOW: The Fast Company Weblog
November 30, 2007
From the Editor of Fast Company: A Clear-eyed Analysis of Apple
My 14-year-old son loves Apple. It's not just that he owns an iPod and a Mac laptop; whenever Steve Jobs makes a major announcement, he downloads the video on iTunes and watches it on his iPod. Just this week, he shelled out $129 of his own money to buy the new Leopard operating system. "I should buy some Apple stock," he told me last night. "That way we can rise and fall as a team."
Such identification--and fascination--with Apple is rampant. After one of our columnists criticized Steve Jobs a few issues back, we were deluged with hostile letters, a few of which appear in our Feedback section, beginning on page 25. Apple is widely admired for its customer-focused products, its enviable design aesthetic, its unmatched success with problem solving. American business needs an icon to believe in, and Apple has done nearly everything right in earning that status.
Which makes a clear-eyed analysis of the company's prospects all the harder--and all the more important. There is a worldview embodied in Apple products: easy to use, sophisticated, stylish. But there is also a worldview embodied in its business practices: that a secretive, closed-door, go-it-alone approach is what ultimately drives innovation. Apple is arguably the most successful company in Silicon Valley these days, yet its practices are at odds with a prevailing assumption in most of techland that open-platform collaboration and iterative group work are what drive creativity and growth.
At a conference this fall for senior-level tech executives, one top CEO talked about the power of collaboration to change the way we work. Over dinner with key industry insiders, the topic of Microsoft's investment in Facebook came up, and the CEO asserted that companies need to be open to partnering with even their most ardent competitors. What about Apple's closed-system approach? "You don't want to bet against Steve [Jobs]," he allowed.
Our cover story this issue ("Open Season on Apple") is intended to illuminate the philosophical divide in Silicon Valley and across our economy. Is openness and sharing undeniably the route to progress? Or is the conventional wisdom on this topic faulty--is the pressure of isolation what's most needed to drive innovation?
Using Apple as the tool to engage this debate is purposeful--to get your attention--though we realize not all of Apple's fans may take it that way. That's okay. We welcome the dialogue, in our pages and online. Steve Jobs may well know something the rest of his peers are reluctant to embrace: that doing things the right way, even if you're alone, is worth whatever slings and arrows come your way. Indeed, it's a mantra we embrace here at Fast Company as well.
Posted by Robert Safian at November 30, 2007 6:56 PM | Category: editor's letter |
13 Comments
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I think this comes down to brand positioning. Apple lives live on the edges of the bell curve. They produce products that are targeted to the view, in a way that is different than its competitors.
Lets look at an iMac. They for years have been a great product for apple. Even though industry experts say no one wants to buy a computer with an integrated monitor. Now over 10 years after the iMac, Gateway has copied it with their "new" ONE computer. Looks like an iMac rip off.
So by continuing to be on the edges of the bell curve, apple will always have a cult following, and thrive. They push the limits of technology, understand great customer interaction, wether through a retail channel or a software UI, and they continue to be a market leader (maybe not in their share of the market) in the products they produce.
Mabye I am already hooked. But Apple has not let me down in 15 years, and i have never heard of someone switching from a mac to a PC.
Apple has done a great job being a "closed" company. But I think a number of things have made the last two years even better:
1. Switch to Intel processors
2. iPhone/iPod touch
Intel allowed Apple to run Windows. That makes it an easy decision for someone who wants to switch. The iPhone, whether you like it or not, or can afford it or not, certainly shows what Apple can do to a mature, entrenched, stagnant industry. The iPhone is now what everyone is trying to copy. What does that say? It says to me, the cell indsutry can't think out of the box. And now they have to imitate. They still can't think beyond what they see. Outside of maybe the Sidekick, it's just a rehash of features, but does not make the UI any better. That is where Apple excels, and that is what they did better on the iPhone.
And just when MSFT thought they had caught up with the iPod, Apple launches the iPod touch. Apple is always ahead of the curve. They lead, when most others follow.
By not buying into the virtues of "open", Apple has successfully avoided becoming a bland and generic commodity -- which is where Dell and Gateway and Sandisk are. And even Nokia in a lot of ways.
Apple's integrated iTunes/iPod/iPhone delivers an experience that a lot of people like. They make products that lot of people ache to own.
Nobody can compete with them in that sphere. So Apple is smart to stay there. I'm not sure they ever cared about being the biggest anything. But simply to create the most compelling products they can.
Apple was always about product and experience. Dell was about a business model. Microsoft was about market share. Nokia is about tonnage. They're just playing different games is all.
I hate Apple. Their entire image is just that, an image and a poor one at that.
The funny thing about their amazing success is that its directly tied to Microsoft and no one talks about this fact. Go look at the statistics for the percentage of people that have iPods and Apple computers, the overwhelming majority of these users are WINDOWS USERS.
With all the hype of Leopard and the iPhone, the numbers are so minuscule compared to the dominance of Windows.
The dominance of the Windows platform and Microsoft are the primary reason why Apple is able to profit like they do.
The only problem is that while they have hit home runs with the iPod and iPhone, their competitors aren't going to sit idly by.
If you look at the longterm game plan of Microsoft, Google, Verizon, etc., you can clearly see that Apple is only an ancillary player it best in the evolution of the Internet at the very best.
Steve Jobs may be the best pitchman for product innovation and product launching. However, if their entire business plan revolves around multi-colored iPods, slimmer iPhones and sleeker Macs...What does this have to do with Web 2.0?
NOTHING.
I'm simply impressed by the ability of a company to provide innovative products that actually work. I like the fact that Apple has chosen to be a company within itself. I some how have an assurance that when I purchase an Apple product it not only works but it works with all of the other wonderful products Apple makes.
After being a PC user for many years I have never seen the service and knowledge of the products like Apple has in their stores. I consider myself lucky to have a product with such a loyal following and as it was said before how many MAC users do you see moving to the PC world. Very few indeed.
Good luck Steve Jobs and thanks for the great products.
Sometimes solving a problem requires having as much control over the variables as possible. Apple's closed approach helps them to have that type of control.
Open models allow for lots of incremental improvements, but make dramatic leaps forward harder to come by, because if you are buildig on top of an existing and commonly agreed to platform, you are by definition not reconsidering the platform itself.
An example of a company reconsidering a problem from scratch(more or less) is Tesla Motors.
I think it's healthy to have a bit of both.
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I'm a PC users, but not due to any particular love for Microsoft or hate of Apple.
As far as I can tell the link that David E makes between iPod/iPhone success and Windows is a non sequitur. Sure Apple made iTunes Windows compatible because of the ubiquity of Windows, but last time I looked every other mp3 player was also Windows compatible(if buggy).
I own a Creative Zen Vision(what an awful, forgettable name)...it took 3 attempts to load the software and in the end it was cumbersome to use. It was a promising product. It's got a big screen, and can play video and display photos(it did this before iPods could, I believe). It has a digital tuner(my iPod needs an accessory for that). But it can't charge via usb, so syncing and charging are separate endeavors and it has a menu system that requires a site map. Now it collects dust, while my iPod gets use.
The truth is that Apple has considered the whole package when developing their products. The iPod is one of the best examples of integrated hardware/software/user interface/branding currently on the market. They are able to do this because they control the whole system.
Apple needs two things to maintain its position.
A) they must continue to innovate(Perhaps that is a difficult task, but it's also a whole lot more fun than cranking out safe, mediocre products)
and B) they need the rest of the players to keep following them. I think their biggest threat may be from a new player.
Just wondering if anyone's ever played the "you're stranded in a desert with only these supplies; prioritize them according to your chances of survival and/or expedient rescuability" game? It is supposed to demonstrate the value of teamwork and collaboration.
Maybe it doesn't relate to the collaboration theme of the rest of the industry (does any player really show all of his cards?) but on one's own a person pretty much never prioritizes the survival items as close to "the experts' list" as when he collaborates with a team.
Another example, tho' I'm not an expert: Japan, the island nation, isolated for close to 200 years. They seem to be doing okay. Discuss.
Apple is a very focused company on generating value for its shareholders and it does that by creating value to its customers.
Its as simple as that.
Secondly, the only way you can create value for your shareholders, is to become dominant in whichever industry you enter and that often means becoming a monopoly. When you are a monopolizing you maximize value to your shareholders through earnings. And we are seeing that in the share price.
I think the tech industry is benefitting from a more benevolent 'super-power' than the industry had with Microsoft in the 90's.
For the simple reason that Apple is becoming dominant simply through innovation -- unlike how Microsoft achieved it.
Apple is using its gadget driven innovation and closed loop control to create a virtuous circle - the bigger they get in one niche the easier to leverage entry into the next and pretty soon their niches add up to a great big whole.
It is what all CE and software companies surely aspire to - how hard did Microsoft work to eat everybody else's lunch; check out Sony's interoperability and prefered imposition of it's own software..
The impressive thing about Apple's success from the outside is their relentless drive to make a virtue out of necessity to attack/redefine markets on their terms not that of the encumbents. iPod succeeded by making it possible for me (and millions of others) to use copyright music anywhere I wanted when I wanted - modern versatile home taping in a beautiful sleek package. The gadget's success led to my immediate family having 8 iPods, and we're now venturing out onto the MacBook path, and if I wasn't already Blackberried up I'd be onto the iPhone next..
The pitfall to come is when a lack of clear focus emerges as part of a relentless drive to improve on already brilliant sales numbers - back to Sony...
Excuse me, but what happened to the "clear eye", not to mention the total lack of real analysis based on inaccurate, myopic, under-researched, overstated, and just plain WRONG information?
If this is an example of what you consider reputable journalism, I think I'll pass.
Sad, very sad.
Apple is a closed system. This allows their product teams much more control over the product and the user experience. If you like what they are delivering and you have the money to pay for it, you are a very happy customer. If you don't you are out of luck. Windows is an open system. PC makers can build a variety of different machines with different software loads and offer them at a wide range of price points. The end user experience is more uneven because it depends on the execution of a variety of partners, but the benefit is choice. If you don't like or cannot afford A, you can always try B or C.
Neither model is necessarily right or wrong. It's logical that the fixed design, closed model inspires fanboi emotional attachment. When you join a cult you have to like the koolade. It's also logical that the open model offers a large degree of commoditization in the center of the market, but plenty of innovation, although sometimes misguided, around the edges. Customers benefit from having both models in place so it's great that they can co-exist. We are the winners.
I'd say too many cooks spoil a soup. Too many designers, too many 'outside' influences creates a Ford Taurus- Bland, ubiquitous, functional yet uninspiring. What you refer to as closed system might also be described as a holistic system. User experience, product design(software,hardware,ID)are integrated successfully together in Apple products in a way that is less successful in other products.
Maybe Apple leads by example, giving an example of integrated, emotive product that works well. Open source seems to be pretty good at cleaning stuff up that is a mess...but without a unified vision wont make the statement that is embedded in Apple products (as Robbie 2007 says). If Apple stuff isn't a mess (no- its not perfect) then opening it up doesn't serve a purpose. Simple. If you don't appreciate the holistic approach to product/system design, buy or create something else. There is room for both.
Ask any marketer, business person, if they want their product to have cult-like following and they will say yes. It is the holy grail of business. Apple has done it the hard way- years of failure.
Respect Google :-))