AppIe Case Study

n an exclusive interview, Apple's CEO talked with Fortune senior editor Betsy Morris in February in
Kona, Hawaii, where he was vacationing with his family, about the keys to the company's success,
the prospect of Apple without Jobs, and more. Here are excerpts.
On the birth of the iPhone
"We all had cellphones. We just hated them, they were so awful to use. The software was terrible.
The hardware wasn't very good. We talked to our friends, and they all hated their cellphones too.
Everybody seemed to hate their phones. And we saw that these things really could become much
more powerful and interesting to license. t's a huge market. mean a billion phones get shipped
every year, and that's almost an order of magnitude greater than the number of music players. t's
four times the number of PCs that ship every year.
"t was a great challenge. Let's make a great phone that we fall in love with. And we've got the
technology. We've got the miniaturization from the iPod. We've got the sophisticated operating
system from Mac. Nobody had ever thought about putting operating systems as sophisticated as OS
X inside a phone, so that was a real question. We had a big debate inside the company whether we
could do that or not. And that was one where had to adjudicate it and just say, 'We're going to do it.
Let's try.' The smartest software guys were saying they can do it, so let's give them a shot. And they
did."
On Apple's connection with the consumer
"We did iTunes because we all love music. We made what we thought was the best jukebox in
iTunes. Then we all wanted to carry our whole music libraries around with us. The team worked
really hard. And the reason that they worked so hard is because we all wanted one. You know?
mean, the first few hundred customers were us.
"t's not about pop culture, and it's not about fooling people, and it's not about convincing people that
they want something they don't. We figure out what we want. And think we're pretty good at having
the right discipline to think through whether a lot of other people are going to want it, too. That's what
we get paid to do.
"So you can't go out and ask people, you know, what the next big [thing.] There's a great quote by
Henry Ford, right? He said, 'f 'd have asked my customers what they wanted, they would have told
me "A faster horse." ' "
On choosing strategy
"We do no market research. We don't hire consultants. The only consultants 've ever hired in my 10
years is one firm to analyze Gateway's retail strategy so would not make some of the same
mistakes they made [when launching Apple's retail stores]. But we never hire consultants, per se.
We just want to make great products.
"When we created the iTunes Music Store, we did that because we thought it would be great to be
able to buy music electronically, not because we had plans to redefine the music industry. mean, it
just seemed like writing on the wall, that eventually all music would be distributed electronically. That
seemed obvious because why have the cost? The music industry has huge returns. Why have all
this [overhead] when you can just send electrons around easily?"
Last updated March 07 2008: 7:10 PM ET
On Apple's focus
"Apple is a $30 billion company, yet we've got less than 30 major products. don't know if that's ever
been done before. Certainly the great consumer electronics companies of the past had thousands of
products. We tend to focus much more. People think focus means saying yes to the thing you've got
to focus on. But that's not what it means at all. t means saying no to the hundred other good ideas
that there are. You have to pick carefully.
"'m actually as proud of many of the things we haven't done as the things we have done. The
clearest example was when we were pressured for years to do a PDA, and realized one day that
90% of the people who use a PDA only take information out of it on the road. They don't put
information into it. Pretty soon cellphones are going to do that, so the PDA market's going to get
reduced to a fraction of its current size, and it won't really be sustainable. So we decided not to get
into it. f we had gotten into it, we wouldn't have had the resources to do the iPod. We probably
wouldn't have seen it coming."
On the benefits of owning an operating system
"That allows us to innovate at a much faster rate than if we had to wait for Microsoft, like Dell and HP
and everybody else does. Because Microsoft has their own timetable, for probably good reasons.
mean Vista took what -- seven or eight years? t's hard to get your new feature that you need for
your new hardware if it has to wait eight years. So we can set our own priorities and look at things in
a more holistic way from the point of view of the customer. t also means that we can take it and we
can make a version of it to fit in the iPhone and the iPod. And, you know, we certainly couldn't do
that if we didn't own it."
On the iPod tipping point
"t was difficult for a while because for various reasons the Mac had not been accepted by a lot of
people, who went with Windows. And we were just working really hard, and our market share wasn't
going up. t makes you wonder sometimes whether you're wrong. Maybe our stuff isn't better,
although we thought it was. Or maybe people don't care, which is even more depressing.
"t turns out with the iPod we kind of got out from that operating-system glass ceiling and it was great
because [it showed that] Apple innovation, Apple engineering, Apple design did matter. The iPod
captured 70% market share. cannot tell you how important that was after so many years of laboring
and seeing a 4% to 5% market share on the Mac. To see something like that happen with the iPod
was a great shot in the arm for everybody."
On what they did next:
"We made more. We worked harder. We said: 'This is great. Let's do more.' mean, the Mac market
share is going up every single quarter. We're growing four times faster than the industry. People are
starting to pay a little more attention. We've helped it along. We put ntel processors in and we can
run PC apps alongside Mac apps. We helped it along. But think a lot of it is people have finally
started to realize that they don't have to put up with Windows - that there is an alternative. think
nobody really thought about it that way before."
Last updated March 07 2008: 7:10 PM ET
On catching tech's next wave
"Things happen fairly slowly, you know. They do. These waves of technology, you can see them way
before they happen, and you just have to choose wisely which ones you're going to surf. f you
choose unwisely, then you can waste a lot of energy, but if you choose wisely it actually unfolds
fairly slowly. t takes years.
"One of our biggest insights [years ago] was that we didn't want to get into any business where we
didn't own or control the primary technology because you'll get your head handed to you.
"We realized that almost all - maybe all - of future consumer electronics, the primary technology was
going to be software. And we were pretty good at software. We could do the operating system
software. We could write applications on the Mac or even PC, like iTunes. We could write the
software in the device, like you might put in an iPod or an iPhone or something. And we could write
the back-end software that runs on a cloud, like iTunes.
"So we could write all these different kinds of software and make it work seamlessly. And you ask
yourself, What other companies can do that? t's a pretty short list. The reason that we were very
excited about the phone, beyond that fact that we all hated our phones, was that we didn't see
anyone else who could make that kind of contribution. None of the handset manufacturers really are
strong in software."
Last updated March 07 2008: 7:10 PM ET
Steve Jobs focuses Apple innovation on competitive pressures and value propositions. t's basic to
his DNA and core to his management style to relentlessly focus organizational energy on customer
centered innovation and customer experience. n a nutshell Apple's innovation "secret (if it can be
called that) is the relentless pursuit of innovation around the customer experience. As early as 2002
Steve Jobs told the world what his competitive strategy was, and it is clear that as CEO he was
carefully evaluating competitive pressures and opportunities in the marketplace:
For those paying attention after Jobs' return, the CEO was telegraphing Apple's trajectory. " would
rather compete with Sony than compete in another product category with Microsoft. We're the only
company that owns the whole widget, the hardware, the software, and the operating system. We
can take full responsibility for the user experience. We can do things the other guys can't do.
(comments to Time in early 2002).
Lashinsky, Adam, "The Decade of Steve How Apple's imperious, brilliant CEO transformed
American Business, Fortune Magazine, pg. 96. November 23, 2009.
Apple's CEO owns the Apple corporate strategy, and he has chosen to do one simple thing that
many companies talk about but few execute very well, Steve Jobs' Business and T strategy is
100% focused on customer centered innovation. He knew that you find business benefit looking
outward, looking at market and business drivers rather than at products or services that exist in a
silo.
recently read a Fortune Magazine article extolling the virtues, or more the impact, of Apple's Steve
Jobs on business. Certainly under Steve Jobs' guidance Apple has come to represent the best of
business innovation for several reasons:
* Jobs built Apple as an innovative company
* After he left Apple the company nearly collapsed
* He returned and turned the company around from the brink of collapse
* Jobs at Apple, through his innovative guidance, has transformed three primary industries ;
personal computers (laptops and desktops), personal music, personal cell phones.
For this and other reasons Steve Jobs' time at Apple has helped him become the king of American
business transformation, at least according to Fortune Magazine.
The Direction of Apple's nnovative Recovery and Company Turnaround
Just after the Y2K scare, while the world was buzzing about the tech bubble burst; speculating about
Apple's survival with Steve Jobs return; watching the AMD and ntel Chip wars heat up, Apple
strategically avoided a battle with its "logical arch-rival Microsoft. nstead Steve Jobs made a
conscious decision to "take his marbles and play a completely different game.
Rather than taking a weak company that was struggling to stay afloat and challenge the dominant
market maker Steve Jobs defined the Apple innovation strategy to focus on the integration of
technology and entertainment. Apple's core competence at the time was in PCs and Laptops, but as
Jobs said, they were the only vendor that did it all, hardware, software, and operating system. He
took that same approach with music, helping to develop the ecosystem to support the Pod and to
transform digital music distribution through Tunes and the online purchase of songs.
The PC wasn't new, but Jobs' approach to customer centered innovation was. The music player
wasn't new, but the Pod certainly was, and it was focused like a laser on the end of Sony Walkman
dominance. Selling music "singles wasn't new, but Jobs' focused Apple's innovation on the Tunes
store together with the widespread use of the Pod. He created the device to play the music and he
created the channel to distribute the music. The cell phone wasn't new, and while Blackberry and
Nokia owned the market, the Phone focused like a laser on innovative customer experience.
Start with a gut sense of an opportunity, and the conversations start rolling.
What do we hate?
A: Our cell phones.
What do we have the technology to make?
A: A cell phone with a Mac inside.
What would we like to own?
A: An iPhone, what else?
But Jobs also explained that in this specific conversation, there were big debates across the
organization about whether or not they could and should do it. Ultimately, he looked around and
said, "Let's do it.
think it's clear they also benefit from the inauspicious "leak to the market. By that mean this
overly tight-lipped organization occasionally leaks early ideas to the market to see what kind of
response they might generate. Again, what other company benefits from having thousands of
adoring designers come up with beautifully rendered concepts of what they think the next great
product should look like?
This PragMatic Marketing Post is about the idea that "you can't innovate like Apple and say,
BALONEY!
Steve Jobs isn't dumb, quite the contrary, he's smart enough to know that you CAN innovate like
Apple and that's why Apple's internal innovation methods are kept so secret! Not only that, the
ACTUAL workings of Apple's innovation is a secret and PragMatic article, like so many others,
merely speculates about the details of the inner workings. This article looks at the actual company
history and Jobs' statements.
From the very beginning of any market action by Apple, the corporate strategy is focused on being a
market disrupter, and in turn a market maker, by focusing relentlessly on the customer experience.
And not just a focus with existing products or services, new products and services are designed,
developed, and relentlessly pursued to please the end customer. Have you visited an Apple store?
Maybe it's time you did.
The Apple innovation difference is less about an inward focus on how to squeeze every last penny
out of some process or on reducing costs, such as what "Lean and "Six Sigma advocates. nstead,
the Apple corporate focus as driven by the CEO was outwardly focused on the marketplace, on the
customer, and how to direct that energy into improving revenue and profitability by addressing the
frustrations (or needs /wants) of customers. The Apple innovation difference is where the role of
CEO is fixated on customer centered innovation. Customer experience with Apple products was the
center of innovation. New products, new applications, and new markets all focused on customer
experience.
Steve Jobs nnate Understanding of Marketing and Economics
One thing Apple did well was listen to the market, and then shrewdly move marketing programs to
create "pent up demand for a product that had not yet been released. These new products were
designed to elegantly, and as intuitively as possible, address marketplace frustration.
Many commentators have described this as him having a "knack for making market moves at the
right time. Baloney, Steve Jobs understands the fundamental core concepts of sales, marketing,
and economics that few teach today.
Apple's core of innovation is centered on one thing, market demand. There is no "law of supply and
demand there is only the law of demand. The supply side of the economic paradigm is completely
irrelevant. The one thing that is important is the law of demand only. Stop for a moment and think
about that, internalize it, and one day 'll offer some insight that gained from a wise college
economics professor who taught me this.
Where there is marketplace frustration there is internal "pent up demand for that frustration to be
addressed.
You can see this thinking in Apple's current move today. With the deep pockets of several
successful product strategies, and on the heels of Microsoft's dismal Vista operating system launch,
Apple is now aggressively going after the company's old arch rival. The market has complained
about Vista, about Microsoft security problems, about the forced upgrade march, about a whole host
of problems Microsoft has experienced lately. Apple is seizing on the market frustration with
Microsoft products and the inherent, pent up demand for an alternative. Apple's timing is simply
capitalizing on the Microsoft promotion of Windows 7. Apple's marketing message is resonating with
the general populace and the pent up demand that is inherent in marketplace frustration with prior
versions of Microsoft Windows. That message is that the new Windows 7 operating system is
simply another "fix to a long line of broken operating systems.
At the time Microsoft is bringing out its latest flagship product, Windows 7, to address criticism of the
Vista product, Apple is offering an alternative. A very successful and financially healthy Apple is now
targeting Microsoft directly.
Steve Jobs as the Apple CEO has become quite skilled at setting strategic direction along a future
timeline. As the calculus of the recent attack on Microsoft's new Windows 7 operating system shows
Steve Jobs is also very adept and skilled at holding back to determine the right timing to attack a
market. Think about it, everyone in the T world has known about the Windows Vista complaints for
years. And over the last few years that frustration in the marketplace has been building. And right
on the heels of Microsoft's boatloads of marketing spend to address negative market perceptions
with a "new Windows 7 flagship product Apple then pounces.
None of this is magic, none of it is really that mysterious. Steve Jobs as Apple's CEO understands
competitive pressures and value propositions. Steve Jobs gets it, plain and simple he understands
that the primary role of the CEO is to set strategic direction and long term goals. He understands
the real reason executive participation creates project success.
Does anyone really believe that the launch of Tunes, and the Pod, and the Phone, or Pixar, or the
latest attack ads on Microsoft were some seat of the pants reaction? The quality and polish of Apple
products, even when there are glitches, indicates that planning and strategy for all of these ventures
took place quite some time in advance. Even rapid development cycles for some of the hardware,
software, and operating systems takes quite some time. Just to get the integration as seamless as
Apple products often are is no small task. So many of these plans were probably several years in
the making before being released to the public.
t needs to be said that Steve Jobs' approach to innovation isn't really a secret, the specific details
may be, but the approach is plain old business and T strategy, Steve Jobs gets it! He plain
understands business and T strategy.
'm sure many of us "poo-pooed Apple's first generation iPhone as sorely lacking in the technology
department. However, no one can doubt the buzz the impending launch of the iPhone OS version
3.0 has created. On the flip side, if we can look through the marketing, we can see that there is a
very clever strategy at work here.
Kontra from the very excellent Counter Notions blog has a great analysis of Apple's iPhone Strategy
and how it has evolved from a device into a platform.
mage Source: CounterNotions
n summary, the first iPhone generation introduced us to a device that could pull in all your Stuff in a
logical manner. The 2nd generation 3G iPhone created a platform where, by leveraging on the
iTunes store, you could download all your Stuff. Finally with the release of iPhone OS 3.0, (very apt
don't you think?) Apple plugs up most of the holes we have been complaining about and almost
perfects the product. Thus making it
Kontra writes:
Apple consolidated its gains, marked its territory of 30M users+25K apps+800M downloads and built
a very deep and wide moat around it. A moat so formidable that there's not a single smartphone
player capable of overcoming it.
.Apple also methodically eliminated the vast majority of iPhone's "missing features: copy and
paste, landscape text entry, global search, notifications, MMS, voice memos, new calendar format,
Notes sync, stereo Bluetooth support, extended parental controls, browser auto-fill and anti-
phishing. pretty much anything else that may have given potential customers a pause previously.
Another thing like to add is that great products do not have to be 100% right the first time. Getting a
product shipped that 80% right but with a 100% intrinsic benefit to your user is a lot better in my
humble opinion. Just make sure to reiterate and improve your product very quickly after you have
launched it.
This strategy is like a good Tennis swing. You need to have a good follow through after you take
your shot. Unfortunately the follow through is what many companies are just not good at doing.
would highly recommend you read his analysis in full, both part 1 and part 2, to get the full course
dinner!
Who can beat iPhone 2.0?
Mon, Mar 10, 08
With the March 6 unveiling of the SDK and associated announcements, Apple has greatly
strengthened its iPhone value proposition to an extent that some have publicly called it game over in
the mobile platform wars. Others, including professional Apple haters, AAPL shorters, nitpickers and
link-baiters, had a field day trying to find holes in Apple's new conquest plan.
Before calling Apple's new position unassailable, let's first see what the company uniquely brings to
the battle field:
1. Design - Nearly half a decade after the introduction of the iPod and over a year after the iPhone
unveiling, no other mobile player has caught up with Apple. With its unique position in the industry as
the only truly vertically integrated company that can tightly couple its own hardware and software at
the OS level, and bolstered by numerous patents, Apple's industrial design and highly polished
multi-touch interface have no peers.
2. Stores - Apple not only has the fastest growing and most profitable physical retail store chain in
the U.S., it also offers apple.com, the most visited computer hardware site online; the iTunes Store,
the best media download site that has sold over four billion songs; and now, what's likely to be the
best application discovery and download venue, the App Store. For developers that can see past
'control' issues, the promise of the iTunes Store-like App Store is genuinely outstanding.
3. Pricing - Unlike its mostly proprietary pre-ntel past, Apple can now leverage its high-volume
iPod/Mac businesses to get favorable component prices and has been the industry leader in
inventory and supply chain management. Backed with relentless product development, the company
has mastered aggressive pricing strategies with its iPod line, offering the best price/value at every
product segment. Apple will follow this proven pricing strategy with upcoming iPhone iterations.
4. Games - With a 163 ppi high-resolution 3.5" screen, Core Animation, H.264 video, SQLite local
storage, hardware accelerated OpenGL ES, 3-D OpenAL sound, accelerometer and multi-touch
capabilities, the iPhone 2.0 has just become the most capable, nearly console-quality mobile game
platform.
5. WebKit - Safari on the iPhone has already captured %71 of the mobile browser market in less
than a year. While others like Adobe and Nokia also use the WebKit engine, nowhere does it shine
brighter than on the iPhone with its multi-touch gestures and big screen. Apple is also about to let
Safari run full-screen (like a native app), go native with JavaScript DOM traversal for huge speed
gains and allow JavaScript to access some multi-touch gestures and other iPhone features.
6. Depth - Apple officially announced that it regards the iPod touch as the precursor of a mobile
platform. ts multi-touch patent portfolio and gesture library bridges PCs (current Mac notebooks
offer multi-touch trackpads) and mobile devices of various sizes/shapes, signaling product
possibilities from iTablet to Minority Report-like form factors. Economies of scale, core design
competencies like power management and miniaturization and cross-device integration opportunities
will give Apple an incontrovertible advantage in product design in the post-PC era.
7. SDK - Cocoa Touch, the marriage of OS X and multi-touch U, gives developers access to the
hardware, multi-touch controls and events, accelerometer, view hierarchy, localization, alerts, web
view, people/image picker, camera, etc., in a sophisticated DE. The development tools in the new
SDK, including an emulator and direct iPhone diagnostics, put it at the very top of the mobile
development platform pyramid.
8. Enterprise - Under Steve Jobs Apple has never directly targeted the enterprise with any
coherency or intent, believing that a frontal attack on Microsoft would be suicidal. The mobile space,
however, has no such entrenched competitor that Apple believes it cannot effectively compete
against. So, uncharacteristically, it has begun to openly court businesses large and small and, to the
extent that it can maintain its momentum and focus, the enterprise world is a new and significant
market for the company.
9. Ecosystem - From automobiles to leather cases, Apple has already created the biggest-ever
ecosystem around a consumer electronics product line with the iPod. No other player in the mobile
space has comparable experience in growing a billion dollar plus ecosystem, which should come in
handy with a growing iPhone franchise.
10. Curatorship - Some pundits and developers see Apple-imposed restrictions in the SDK or the
App Store as impediments to wider adoption of the iPhone. However, Apple has proven with Mac
OS X and the iPod that it can anticipate user needs, trade featuritis for enhanced user experience
and carefully distill choices to create coherent and desirable products. User satisfaction surveys
consistently prove actual users love their iPhones at rates far above rival devices.
Are there any chinks in Apple's armor? Certainly. There are real and perceived 'shortcomings' that
likely won't change soon: dedicated enterprise sales network, physical keyboard, removable battery,
etc. Others may change soon with the iPhone 2.0: video, GPS, Bluetooth A2DP, cut and paste,
global search, exposed file system and so on. Some new capabilities like 3G will surely come in a
few months.
What was displayed by Apple at the March 6 SDK event and the uniquely competitive factors listed
above, however, should overwhelm most if not all its competitors, to echo General Colin Powell's
famous doctrine of attacking adversaries with overwhelming force to ensure victory. Apple's arsenal
is now the widest and deepest in the industry.
Who then can challenge Apple? Not Palm or Motorola (extremely weak and rudderless leadership);
not RM (no OS level hw/sw integration, little U and very limited consumer market expertise); not
Sony, Samsung or LG (no OS level hw/sw integration and limited U expertise); not Adobe or Google
(not much hardware experience). Nokia and Microsoft appear to have had the longest experience,
but neither has anything like the ten factors cited above that make Apple such a well rounded
competitor in this field.
As the PlaysForSure and Zune debacles have amply demonstrated Microsoft is forever saddled with
the inability to choose between the OEM/partnership approach that worked on the desktop and
going it alone which hasn't in the mobile space. No doubt Microsoft will come up with its own
mobile/phone hardware device and then try to balance that with its Windows Mobile licensees'
interests. The $44.6 billion question for Microsoft is, can it juggle all this with its impending Yahoo
entanglement over the next three years?
Finally, how good a competitor will Nokia be? To its credit the company quickly recognized its weak
points in interface development (bought Trolltech), music downloads (opened a UK-based store but
it's E/Windows only) and online presence (recently started Ovi). Nokia is the volume leader in the
mobile industry, but hasn't really exploited that advantage, as we previously covered. t has to walk a
very tight rope in order not to upset its carrier partners.
We thus see no other player that can bring as much to the table as Apple. Clearly, this is Apple's war
to lose.
iPhone OS 3.0: Refinement or a leap?
Mon, Mar 16, 09
nnovation. Marketshare. Price.
Cellphone vendors often try to fit all three of these vectors into a single product in hopes of
cramming enough features to eliminate real or perceived user objections. Features assembly,
however, isn't quite Apple's design approach. ndeed, Apple's challenge to would-be iPhone-killers
seems to be:
nnovation. Marketshare. Price. Pick one.
Apple works on value themes where market creation is the goal. The iMac created a new market for
one-piece, no-wires, no-hassle nternet PCs. The iPod created a new market for integrated
hardware+software+service trilogy for digital music appreciation. The iPhone created a new market
by unifying hitherto disjointed phone, nternet and media consumption in a single device.
By creating new markets Apple enjoys the advantage of making up its own rules of the game. Ever
since the introduction of the iPhone, every smartphone contender has had to battle Apple's
strengths, as we outlined a year ago in Who can beat iPhone 2.0?
The value themes for the first two iterations of the iPhone are clear:
The original iPhone created the first veritable mobile-convergence device. After 25,000+ apps
downloaded nearly a billion times, the second iPhone schooled the rest of the industry on how to
create a mobile platform. What then awaits iPhone OS 3.0 to be introduced tomorrow?
Recent product introductions from Cupertino indicate that, in this difficult economy, maturity seems
to be the operative theme. New desktop and notebook introductions of the past month have been
about incremental value enhancement and signals on the upcoming OS update Snow Leopard seem
to focus on refinements to system plumbing and performance.
iPhone OS 3: The moat strategy vs. features-fetishism
Thu, Mar 19, 09
The chattering class has a fetishistic indulgence with smartphones bordering on techno-porn:
Rumors were in full swing on the eve of Apple's introduction of the iPhone OS 3.0 and virtually all of
the speculation was about whether Apple would include one feature or another that some other
phone already had.
Two days ago in iPhone OS 3.0: Refinement or a leap? we outlined the last two stages of the iPhone
evolution from a device to a platform:
We anticipated that despite all the rumors iPhone OS 3.0 would not be a radical leap but a
maturity play. And it was. Apple kept it simple:
While this garnered a collective yawn from the features-fetishists, barring a product introduction
disaster, the iPhone OS 3.0 will do to iPhone-killers what it did do to iPod-killers half a decade ago.
Apple consolidated its gains, marked its territory of 30M users+25K apps+800M downloads and built
a very deep and wide moat around it. A moat so formidable that there's not a single smartphone
player capable of overcoming it.
Dj vu all over again
At the start of his turnaround of Apple about a decade ago, Steve Jobs gave a keynote in which he
went through, one-by-one, all the fears and concerns the industry, Wall Street and the media had
about the viability of the beleaguered company. He then discussed what Apple was going to do to
dispel them. Starting with the chaotic product line consolidation into a "product quadrant, Digital Hub
strategy and the iMac, Apple went about striking through all the real and perceived objections in the
following few years. nstead of fear and denial, there was acceptance and execution.
Similarly, last year at the introduction of the iPhone 3G, Jobs went through the very same process by
displaying all the objections to the original iPhone as a business tool and detailing how Apple
accepted such reservations and eliminated them one-by-one in the upgrade.
Developers, developers, developers
During yesterday's address to its developers, Apple was following the same game plan of
acceptance and execution with two simple objectives: (1) eliminate as many perceived and real
reservations iPhone customers may have in choosing the iPhone, and (2) provide a wide range of
incentives to what's already the most impressive mobile developer ecosystem to prevent any
defections to rival platforms.
The iPhone is not the cheapest, the most widely distributed or the most open device in the market.
Why should developers prefer it then? Apple offered a few thematic reasons:
These and a thousand other new APs are wrapped inside what's inarguably the most sophisticated
mobile SDK in the industry. Every one of these new APs is designed to both help developers create
new type of applications and open up avenues of new revenue at the 70/30 split. Take just one
example where developers got device-control AP access to the 30-pin port (which earlier created a
multi-billion dollar ecosystem for the iPod):
Show me the money
The "Accessories APs alone represents concrete opportunities for thousands of new applications
most of which we likely haven't seen yet on any existing platform, translating into hundreds of
millions of app downloads over the next few years, and thus growing the App Store into a multi-
billion dollar revenue source 70% of which will go directly to developers.
While analysts and competitors were busy making feature-level comparisons (of mostly hardware),
Apple consolidated its platform lead and laid the foundations of a new growth engine the likes of
which the mobile industry has neither yet seen nor fully comprehends.
No developers, no users
Since developers go where the users are, Apple also methodically eliminated the vast majority of
iPhone's "missing features: copy and paste, landscape text entry, global search, notifications, MMS,
voice memos, new calendar format, Notes sync, stereo Bluetooth support, extended parental
controls, browser auto-fill and anti-phishing. pretty much anything else that may have given
potential customers a pause previously. Of course, we haven't been shown all the new APs and we
still don't know what the upcoming iPhone hardware is capable of.
Forest. Trees.
One might wonder at this point if there's ever a way to fully satisfy the features-fetishists. Video
recording/conferencing, voice control, background processing and a host of other capabilities may
have to wait for the next iPhone version, when users can perhaps better enjoy the fruits of faster
processors, 4G speed and Apple's PA-Semi acquisition. Apple's not in the business of feature-
complete perfection or geek satisfaction. t's merely seeking meaningful profit maximization as a
business and inspiring transformation of industries it touches as a culture.
By the end of 2009, we expect the virtuous cycle to kick in and the moat strategy to reveal just how
difficult it will be to compete against Apple's touch platform, thereby ushering in consolidation in the
rest of the smartphone industry.
http://counternotions.com/2009/03/19/moat/
n product design and business strategy, subtraction often adds value. "Whether we're talking about
a product, a performance, a market, or an organization, our addiction to addition results in
inconsistency, overload, or waste, and sometimes all three,"
Antennaegate
A minor glitch in Apple's latest phone hints at bigger problems
Jul 15th 2010 | san francisco | from the print edition
*
*
APPLE is revered in boardrooms and business schools around the world. The firm has produced a
string of winning products, from the iPod to the iPad, that have generated mountains of money for its
shareholders. But a growing controversy involving its latest gadget, the iPhone 4, threatens to take a
little shine off its gleaming brand.
Since Apple launched the latest version of its popular smart-phone last month, the blogosphere has
been buzzing with reports that the device loses signal strength and may even drop calls when held
in a certain way. On July 12th Consumer Reports, a respected American product-testing outfit, said
it would not recommend the iPhone 4 to potential buyers because of a faulty antennae design that it
claims causes the reception problem. This triggered speculation about a possible product recall,
spooking investors. Apple said it would hold a press conference on July 16th to discuss the iPhone.
And don't drop it
When criticisms of the device first surfaced, Steve Jobs, Apple's boss, is said to have told one irate
customer not to hold it in a certain way or to buy a case for it. Wags promptly began joking about the
iPhone's "death grip (pictured). n a blog post, Nokia demonstrated a variety of ways people could
hold one of its phones, including "the cup and "the four-edge grip, without losing a signala clear
dig at its rival.
Related topics
* Apple
* Electronics
* Consumer electronics
* Technology
* Smart-phones
Such gibes do not appear to have dented consumers' enthusiasm for the iPhone 4. Tim Bajarin of
Creative Strategies, a research firm, reckons Apple may have sold between 2m and 2.5m of the
devices already. But the episode has no doubt bruised pride at a company used to receiving acclaim
in the press and online. t has also cast a shadow over two of the things that have helped propel
Apple to stardom.
The first is product design. Apple has argued that faulty software lies at the heart of the iPhone 4's
connectivity problem: screens were showing too many bars. But a growing body of evidence
including this week's Consumer Reports findingsuggests that Apple's decision to wrap the phone's
two antennae around the device rather than place them inside may be to blame. This, in turn,
suggests that testing of the iPhone 4 may not have been sufficiently rigorous.
Apple is also renowned for the skill with which it manages manufacturing. But some analysts have
speculated that a hiccup in the production process for the iPhone 4 may be to blame. Whatever the
root cause, Apple's executives need to bring it to light as soon as possible and move fast to correct
it.
Some critics have suggested that Apple may suffer a Toyota-like fall from grace. That is alarmist
nonsense. Mr Jobs and his colleagues have created an impressive business that will not be derailed
by a mishap with a single version of a wildly successful device. Yet Apple's leaders could certainly
do better when it comes to responding to users' concerns. "They're not winning awards for the way
that they have handled this situation so far, says Ronn Torossian, the boss of 5WPR, a public-
relations firm. The sooner that changes the better.
Steve Jobs nterview in Playboy - 24 years later
Tue, Jan 27, 2009
News
Playboy recently published online an interview they conducted with Steve Jobs in January of 1985.
The interview offers a unique perspective into the mind of a then 29 year old Steve Jobs as he gives
his thoughts and opinions on a broad number of topics ranging from how he met Steve Wozniak, his
travels in ndia, being a young multi-millionaire, and his thoughts on where computers would take us
in the future.
n one excerpt, the article tells a story of Jobs attending a party and showing off Apple's new
Macintosh to an interested kid and to a few adults. When asked why Jobs was seemingly happier in
showing off the computer to the kid as opposed to the adults, Jobs responded -
"Older people sit down and ask, "What is it? but the boy asks, "What can do with it?
Below are some more excerpts from the interview which is a highly recommended read.
Jobs on why people will buy home computers in the future:
The most compelling reason for most people to buy a computer for the home will be to link it into a
nationwide communications network. We're just in the beginning stages of what will be a truly
remarkable breakthrough for most peopleas remarkable as the telephone.
Jobs on why the Lisa failed:
First of all, it was too expensiveabout ten grand. We had gotten Fortune 500-itis, trying to sell to
those huge corporations, when our roots were selling to people.
Jobs on what it takes to create an "insanely great product:
How come the Mac group produced Mac and the people at BM produced the PCjr? We think the
Mac will sell zillions, but we didn't build Mac for anybody else. We built it for ourselves. We were the
group of people who were going to judge whether it was great or not. We weren't going to go out and
do market research. We just wanted to build the best thing we could build. When you're a carpenter
making a beautiful chest of drawers, you're not going to use a piece of plywood on the back, even
though it faces the wall and nobody will ever see it. You'll know it's there, so you're going to use a
beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to
be carried all the way through.
Wow. f you look at interviews with Jobs and other Apple executives 20 years later, it's clear that the
spirit of Apple from 1985 still permeates through the company today. That's pretty rare for any
company, let alone a company in the fast moving world of tech.
Jobs on why the computer industry is dominated by young people:
People get stuck as they get older. Our minds are sort of electrochemical computers. Your thoughts
construct patterns like scaffolding in your mind. You are really etching chemical patterns. n most
cases, people get stuck in those patterns, just like grooves in a record, and they never get out of
them. t's rare that you see an artist in his 30s or 40s able to really contribute something amazing.
Of course, there are some people who are innately curious, forever little kids in their awe of life, but
they're rare.
Jobs on working for HP as a teenager:
When was 12 or 13, wanted to build something and needed some parts, so picked up the
phone and called Bill Hewletthe was listed in the Palo Alto phone book. He answered the phone
and he was real nice. He chatted with me for, like, 20 minutes. He didn't know me at all, but he
ended up giving me some parts and he got me a job that summer working at Hewlett-Packard on the
line, assembling frequency counters. Assembling may be too strong. was putting in screws. t didn't
matter; was in heaven.
Jobs on meeting Steve Wozniak:
met Woz when was 13, at a friend's garage. He was about 18. He was, like, the first person met
who knew more electronics than did at that point. We became good friends, because we shared an
interest in computers and we had a sense of humor. We pulled all kinds of pranks together. Like
making a huge flag with a giant one of these on it [gives the finger]. The idea was that we would
unfurl it in the middle of a school graduation. Then there was the time Wozniak made something that
looked and sounded like a bomb and took it to the school cafeteria. We also went into the blue-box
business together.
Jobs on his then-relationship with Woz:
When you work with somebody that close and you go through experiences like the ones we went
through, there's a bond in life. Whatever hassles you have, there is a bond. And even though he
may not be your best friend as time goes on, there's still something that transcends even friendship,
in a way. Woz is living his own life now. He hasn't been around Apple for about five years. But what
he did will go down in history.
Jobs on Radio Shack:
Radio Shack is totally out of the picture. They have missed the boat. Radio Shack tried to squeeze
the computer into their model of retailing, which in my opinion often meant selling second-rate
products or low-end products in a surplus-store environment. The sophistication of the computer
buyer passed Radio Shack by without their really realizing it. Their market shares dropped through
the floor. don't anticipate that they're going to recover and again become a major player.
Jobs on his future at Apple:
'll always stay connected with Apple. hope that throughout my life 'll sort of have the thread of my
life and the thread of Apple weave in and out of each other, like a tapestry. There may be a few
years when 'm not there, but 'll always come back.
This quote from Jobs seems somewhat prophetic, in hindsight, as Jobs would be ousted from the
company just 3 months after the interview in Playboy was published. Again, encourage you to read
the full interview. t's extremely long, but extremely informative and well worth a read.