A personality like Steve Jobs's would never tolerate having another Steve Jobs around, so this is what I always assumed. Steve was always laser focused on a small number of elements to create buzz (one button, really thin, it's a cube...) and a small number of products (goodbye old model, here is new model, it's not compatible).
Tim Cook has been adding blur from the first moment.
I also see an odd parallel in another corporate transition... even though it's the same leadership, is the new re/code more than a shadow of the old All Things D?
Tim Cook is an operations guy, Steve Jobs was a product guy. Tim Cook hasn't been "adding blur" to anything. CEOs have an executive role but whatever they do beyond the usual management and delegation stuff is more a function of their personal interests than explicit responsibilities that are part of the job description. It's very unusual for CEOs to micromanage product design, and in most cases it's an organizational antipattern when they do.
How about dialing down the "growth" expectations? How big do you expect Apple to be for $deity sake? They are big. Much bigger than ever. Now it's not about big "growth" anymore, it's about staying big.
Edit: whoever wants to give some meaningful arguments can maybe use some comparable company as an example.
If you exclude the cash horde (edit - the zombies hired to protect the vault full of cash), Apple's P/E ratio is running at around 5 right now. IBM is 10. Microsoft is about 35 if excluding their much smaller cash pile.
Apple is ridiculously "undervalued" compared to any peer in the industry. It is a money printing colossus.
Having said that, the market seems to get shivers around $600B, and that psychological barrier imposes a friction that makes the rules of the game change. No one can stay above that for long, and in the case of Apple its profoundly out of scale numbers makes everyone simply put it in a different universe of valuation.
That is an interesting article, but the meat of it contradicts, in a common sense, the title.
For instance, no one thinks that Apple has a big vault with hundreds of billions in it. Like all rational players, they hold most of their negotiables in short term securities. For tax reasons they also have been taking on debt in some areas rather than liberate cash from elsewhere.
But they have an enormous, enormous amount of wealth sitting virtually at a standstill. They have announced that they're going to spend a lot of it to buy back shares (boosting the value of the remaining shares), but they've been doing this so slowly they're adding to their pile quicker than they're spending it.
To stay big, you need to innovate. The releases since Steve's death have been disappointing. Minor changes to existing products. Ok. The apple watch. But really?
Swift may be one of the biggest releases in recent years. However, since it doesn't affect the public, is considered a non-release.
> The releases since Steve's death have been disappointing. Minor changes to existing products. Ok. The apple watch. But really?
Compare: Since Steve returned to Apple (1997) to the point of iPhone being presented (2007) there were almost 10 years of "minor changes." iPod? "No wireless. Less space than a Nomad. Lame." (2001)
Steve Jobs died in 2011. This time now is then an approximate year of the "Lame" sentiment.
Agreed. This hysteria is getting tiresome. I think Apple should simply get rid of investors and go private. I think its big enough and has enough cash to do just that.
I can't tell if this is a joke? Apple couldn't use it's own cash to purchase itself from it's shareholders because the value of the company will always be greater than it's cash.
Apple would have to borrow heavily to buy itself back, just like every other company that buys itself back. But if any company could go borrow $400bn in cash, it's Apple.
Apple can't take itself private unto itself, there must be a human owner or owners that own all of Apple stock as a private corporation.
Apple could team up with JP Morgan, Silver Lake Partners, and a dozen other firms to take itself private however, and they along with a likely small class of shareholders would own the private corporation (eg perhaps Tim Cook and Laurene Jobs would would choose to retain their large positions).
There is no possible scenario under which a corporation can exist and continue to exist indefinitely in any of the 50 US states without a human owner somewhere in the chain, even if said owner is buried under a dozen shell companies.
I wasn't considering the extreme pedantry that I'm apparently receiving when I made the post. I was using the phrase "buy itself back" as going private. The ownership structure after which point that it is no longer a public company was irrelevant to me at the time I made that comment.
The company can't "buy itself" into a private company either. It doesn't work for a whole host of reasons, one of which being that they aren't sitting on the ~600 billion in cash that would require, another being that buying a bunch of stock back is fundamentally not the same thing as being a private company. But also, if you buy all the stock back, it means by definition that you have liquidated all value in the company (or else we're assuming that the market undervalued the company so much that it thought nothing but the cash on hand was valuable).
If you assume that Apple is going to borrow the 600 billion to buy all its stock, then you are effectively saying that whoever's left holding the "private" company is holding a 600 billion dollar loan. I do not share your optimism that anyone can get a loan large enough to buy Apple.
It's not a joke. There was another thread with lots of people advocating the feasibility of this a few days ago. There are apparently a lot of people here who have no understanding of business finances.
Cash isn't included in the enterprise value, you're thinking of the market cap. A company can simply do stock buybacks until it owns all the outstanding stock itself. It's like an IPO but in reverse. During an IPO a company sells equity and gets cash. During a buyback a company buys equity and pays cash.
If you still believe this is impossible, think what would happen if a company on the day of the IPO decided to immediately and unilaterally reverse every transaction. Everybody would get their money back, and the company would simply get its equity back. It's as if the IPO never happened. Clearly not an impossibility. The only difference here is that because some time passed the investors want some extra return on their investment. That's not an insurmountable problem because Apple is rich.
But when the IPO happens, some shares are already owned by investors (founders, VCs, etc). If you reversed the IPO, the company would still not "own itself", it would be owned by them.
> If you still believe this is impossible, think what would happen if a company on the day of the IPO decided to immediately and unilaterally reverse every transaction.
Yeah, this isn't a thing the company can do. The board cannot "unilaterally" take shareholders' shares and give them money in return. They can initiate a buyback, but that means buying shares on the open market, and they'd still be a public company even if everyone sold back their shares. Or they can propose a buyout, but that requires a shareholder vote and typically external money.
The first scenario still results in a public company, just with fewer shares. Neither scenario results in the company owning itself.
there's a limit of how many shiny things you can sell. it's not tim cook's fault.
apple is diversifying, if the car rumors are true it means that they are trying something totally new. its just that building a revolutionary car takes a lot more planning and effort than creating a new iteration of iphone.
John Sculley sold sugar water and never did anything worthwhile after that. Tim Cook is running the world's most valuable company with more cash than most of the world's countries put together. He's not Jobs, no one is. It's like complaining if you are not Einstein there is no point in being a physicist because you won't change the world forever.
So? As the article says, from Cook's position many executives would have made a capable run of the past five years; the question is what Apple is going to do in the future.
My money is on self-driving cars. They have AI (Siri), Maps, Location (through Yelp and partners) the only thing left is a physical car. Their Carplay SDK is just them dipping a toe in. I expect, like the Moto Rokkr, it's going to go from a partnership to an all out race.
Sculley was a success at Apple: he took annual revenues from $0.98bn in 1983 to $8.00bn in 1993. After Steve Jobs's Macintosh flopped, Sculley saved it with the Mac II.
Jobs rejoined Apple in 1997 when turnover was $7.078bn, after which turnover declined to $5.36bn in 2001 before recovering to $8.28bn in 2004.
So Apple did better when Sculley was in charge ($0.98bn in 1983 to $8.00bn in 1993) than in the next decade, when he wasn't ($8.00bn in 1993 to $6.02bn in 2003).
What Sculley didn't do was successfully introduce non-Mac products (iPod, iPhone, iPad), which Jobs did. The jury is out on whether Cook can do that too.....
To me there's a fascinating story there. Sculley was working for the today and Jobs for the tomorrow. Doing either by itself is disastrous: living for today means the company doesn't innovate and once its market momentum slows down it'll die (RIM, Nokia?), and thinking too far ahead mean they cannot polish their products and get the most they can of the current market either.
Apple without the return of Jobs wouldn't exist - it wouldn't have innovated in anything. But without Sculley to give it some solid ground for a few years, it would probably have gone bankrupt.
Remember that the Newton--which as a product concept was far ahead of its time--was developed and launched under Sculley. So was OpenDoc, the Apple "Advanced Technology Group," Quicktime, Quicktime VR, etc.
So I would not say that Apple failed to think about the future under Sculley. It's not easy to understand or describe why Jobs succeeded as wildly as he did in his 2nd tour at Apple. If it was, everyone would be doing it. :-)
One thing I rarely see discussed is the importance of the time in which Steve Jobs succeeded. The success we ascribe now, in hindsight, to Jobs' incredible leadership, might be in part the result of just a good match between what Jobs could do, and what could succeed in the market at that time.
His principles did not really change that much, actually--he always believed in owning as much of the tech stack as he could, and in producing integrated products with custom hardware and software. That approach was too expensive and inflexible to compete against Microsoft PCs the first time he was at Apple. It failed at NeXT. But it succeeded wildly the second time around, at Apple.
Would Apple be doing much better now under Steve Jobs' leadership? I don't think it's entirely clear. Some aspects of Apple's success continue to match up with Jobs' vision, but the areas in which Apple seems to have the most challenges--services and interoperable ecosystems--were never really Jobs' strong suits.
To your last point, I think it's less of a factor of the person in the lead or his ideas, and more about what was expected of that person.
Sculley was more of a manager, Jobs was a dictator. Once Jobs was back, he was somehow able to lead the company in a near-authoritarian way, and despite many flukes, it allowed the company to try many things that would not be readily accepted by an all-powerful committee.
One authoritarian that is wrong half the time is better than a committee that is not-wrong 100% of the time. The former tries a bunch of stuff, the latter doesn't really try anything. (And to me that's what got RIM and Nokia killed).
I don't know that I would agree that Apple is not trying anything. The Apple Watch, Apple Pay, Swift, HealthKit and ResearchKit, HomeKit--potentially a car... if anything, the critique against Cook seems to be that Apple is trying too many things and losing focus.
I agree that Jobs was a special talent who could command the organization. I think Cook is emphasizing collaboration because he knows he can't lead Apple the same way Jobs could. Probably no one can.
On the other hand, there was of course QuickDraw GX, PowerTalk etc which was directly affected by turf wars and the like. I wonder if a good VP of engineering would have helped Apple back in the Sculley era.
The story plays out over and over again in the tech industry. Larry & Sergey were great innovators but terrible managers; if you ask Googlers who were there in 2000-2001, Larry made some very basic management gaffes that almost destroyed the company. Eric Schmidt's genius was in being able to maximize the value of the Search product cycle while still giving the founders enough latitude to champion innovative new products like GMail, Maps, Android, Chrome, and YouTube. And then he turned the reigns back over to Larry when the Search product cycle was just about maximized, because the industry was facing a period of unusual uncertainty that required the ability to spot new product cycles.
With Cisco, the visionary founders were forced out by VCs, and as a result, the company has had to buy innovation by spinning off startups, letting them innovate, and then folding them in through an acquisition process.
Microsoft remained undisputed king of the PC industry for decades under Bill Gates, but as soon as he left, innovation basically stopped. Ballmer managed to dramatically increase revenues and has built something like 6-8 billion-dollar businesses, but there were no new product cycles under him.
Those numbers are very misleading when you understand that the industry/market was expending at such rapid pace, that even a poor/marginal player could do well.
If you look more in the way what was possible, Apple was mostly a marginal player, and its peak was in 93. Eventually the market share started declining rapidly even though the industry was still increasing.
>Microsoft's annual turnover went from $3.75bn in 1993 -- less than half Apple's -- to $32.19bn in 2003, which was 5x more than Apple.
OK, but remember that Microsoft's only significant "variable costs" (cost per unit sold) were the costs of stamping CDROMs and providing basic tech support, whereas Apple (and Dell) incurred all the variable costs involved in making whole computers, so Microsoft's "gross margins" (turnover minus cost of goods sold) was much higher than Apple's.
Supermarket chains have tremendous turnover, but their gross margins are around 1% in contrast to Microsoft's margins in excess of 30% in the 1990s -- and Apple's sky-high margins of recent years -- and IBM's sky-high margins before they lost their dominance during the rise of the personal computer in the 1980s.
My point (since we are talking about CEO performance) is that Microsoft was probably much more profitable than Apple already in 1993 although the ratio definitely increase in the late 1990s as you point out.
Well, Microsoft is basically a licensing business so the profit margin should correctly be 100%. Unfortunately, it also has to create stuff to license (ie pay for R&D) and incur some marketing, support and other costs, so that reduces the margin somewhat ;-)
In the 1990s, Microsoft also had CD manufacturing and packaging costs, but those have mostly gone away now.
In a competitive market, hardware generally results in manufacturing_cost+plus_profit pricing, which drives margins close to zero. That's what happened to the PC OEMs. Apple makes better margins because it doesn't use cost-plus pricing: it picks whatever price it thinks the market will bear. The higher margins are justified by product design, branding, saturation advertising and/or whatever. That's how IBM worked as well, until it had to face competition from PC clones.
They're different business models, but Sculley took a bet, essentially thinking that there was more turnover (and profit) in selling PCs for $2,500 than there was in licensing software for $50. He was wrong in the 1990s, but maybe times have changed ;-)
IBM has got rid of as much hardware as possible and shifted its focus to high-margin licensing, and it's not doing too well....
Sculley sucked at Macintosh, too. Around 1991 my parents asked me what Mac they should buy. And I couldn't tell them; there were like 20-30 models, all slightly different and with no way to make clear comparisons.
That's just the marketing / planning side of things. He wasn't that great at setting directions for technology, either.
What made Apple the thing it is today is their pinpoint and high quality products for each sector they're in, and their willingnes to take initiative and introduce radically different stuff.
There are many things in this article I feel compelled to attack or nitpick about. But just to highlight one: the assertion that "the big problem is that Apple’s last hit product, the iPad, came under Jobs and launched six years ago".
That ignores the Apple Watch, which has basically created a new product category and proceeded to immediately account for more than half the total sales in that category. The Watch has outsold the iPhone during its early days, as well. For any other company, this would be reported on as a great triumph. Unless you have wild fantasies that Apple is supposed to magically produce an iPhone-sized business every two years, even though no other company in the history of money has ever produced an iPhone-sized business even one time. Double-digit millions of units of sales, first year, for a brand-new product that nobody's ever spent $400+ per unit on is pretty good.
I think the gist is that smart watches existed before Apple announced their watch, but as soon as Apple announced the Apple Watch, a bajillion were announced, created and put on sale even before Apple started selling theirs.
Did they invent the smart watch? No. Did they innovate and start a new chapter of the category? I think so.
Apple is much more of a household name today than it was before the iPhone. When you've built a reputation, people are willing to try your new products "just because"; see https://stratechery.com/2016/its-a-tesla/
I remember an anecdote in the Steve Jobs biography where the first thing he did when he came back to Apple was severly cutting down a confusing and overlapping matrix of products. Now that he's gone, that matrix is creeping back up. I've lost count how many different types of iPhones and iPads there are now.
There are 2 types of iPhone (standard and plus) and three types of iPad (Mini, Air, Pro). All of the other variants are just older models that remain on sale so people within £600 to spend on a phone can afford to become Apple customers.
Not sure if you're considering this or not but there are two sizes of watch so at least screen size is different. Which is pretty much inline with the differences between MacBook Pros and iPhones where screen size is the main delimiter.
Yes, but Applein the 2000's was notorious to kill products that still make profits for the sake of keeping the product line clean and lean, and not have consumer confused over which product to choose.
Ok, but look at something like the iPod. That strategy makes sense as it is a relatively low cost product. Cost was part of the reason Mac's never got high market penetration. The iPhone is very expensive, especially compared with the competition. Offering old models at a lower cost allows people with less money to buy into the ecosystem. This is important when you have a product like the Watch that requires an iPhone first.
The iPad lineup in particular has gotten pretty bad. There's the iPad Pro 12.9-inch, the iPad Pro 9.7-inch, the iPad Air 2 (which also has a 9.7-inch display), the iPad mini 2 and the iPad mini 4.
Why would I get a 9.7-inch iPad Pro over a 9.7-inch iPad Air 2? What's the difference between an iPad mini 2 and an iPad mini 4, and what happened to the iPad mini 3?
They ought to just have three iPad models, distinguished by size: iPad Pro (the 12.9-inch model), iPad Air (the 9.7-inch model) and iPad mini (the 7.9-inch model). That would make it much easier to tell the difference and decide which one you want.
The 9.7 Pro and Air are nearly identical. The naming is unfortunate. If the 9.7 Air is v1 the 9.7 Pro should be v2 of the same name. But the product itself is the iPad, there's isn't a competing iPhone XXL. The Pro/Air is just a sub configuration on price and specs.
I think people forget how quickly the matrix expanded outward again once Apple got its financial house in order.
Jobs famously reduced the product range to a 2x2 grid--desktop and laptop, pro and consumer.
But in each of those boxes, there were a number of options. In addition to different "speeds and feeds", there were even color differences. At one point, taking into account configurable options, there were over a dozen versions of the iMac alone.
The iMac came out in 1998, iBook in 1999--and that filled out the matrix. But then the iPod came out in 2001, and the Xserve in 2002. And then of course each of those expanded into different versions and options. Think of the variety in the iPod line.
Jobs also took Apple into entirely new businesses fairly quickly, like Internet hosted services. Itunes is the most famous, but Apple did not even have an online store until they built one under Jobs' leadership.
Nobody was like Steve Jobs. So if that's the complaint against Tim Cook, well, take a number. You could say the same thing about 7 billion other people.
Tim Cook has a few things over John Sculley.
A big difference is that Tim was at Apple for decades before taking over as CEO. He joined Apple in 1998 as an SVP, which means he was part of Steve Jobs' leadership team for the entirety of Apple's resurgence. The article says:
> Jobs obviously saved the company years later with the iMac, iPod, Macbook, iTunes, iPhone and iPad.
Tim Cook was part of the Apple leadership team for every single one of those products. There hasn't been a "Steve Jobs era" followed by a "Tim Cook era." There was a "Steve Jobs + Tim Cook era" and now it continues as a "Tim Cook era."
And other people too, of course. Ctrl-F in the article for "Ive"--no results. An article about the past and future of Apple that doesn't mention Jonathan Ive? Looks like another in a long line of "cult of personality" articles that ascribe all success--or failure--to a single person, the CEO.
There are many other differences from Sculley. Tim Cook has been Apple CEO before--this is his 2nd turn at it. He's a believer and defender of Apple's culture. He personally understands computer engineering. He has personal principles that he advocates for. Etc.
Apple has always had an ecosystem of second-guessers telling it what it should do differently. The greatest strength of Tim Cook as CEO is that he, like Jobs, doesn't listen to those folks.
>An article about the past and future of Apple that doesn't mention Jonathan Ive?
Can someone explain this to me. I keep hearing about how big Jonathan Ive is in relation to Apple and I think I've even seen a book that claims he is the genius behind Apple. But from what I see and understand he is mostly a designer who executed on Steve Job's ideas (it's hard to think of the very quirky and exacting design of Apple Products not having some major input from the quirky and exacting Jobs) and I've even read somewhere that his major contribution to the original Ipod (arguably the product most responsible for Apple's comeback) was the white color of the earphones. Are you sure you're not just replacing the cult of Jobs/Cook with the cult of Ives. I genuinely would like to know why a product designer gets so much praise/credit for Apples success since great design is only one of many reasons (and probably not even the most important) for the great products they make
This oversells Jobs' execution. Let's not forget that he once held a whole media event to announce...an ipod dock. And Apple forecast the iPhone as possibly eventually capturing 1% of the phone market.
The iPhone is an extra-extraordinary product, but even in retrospect it wasn't considered as amazing when it came out. The watch reminds me of the iPod in terms of when it entered the market (somewhat early, after others had probed and validated it a bit) and under-the-radar adoption rate.
If you ignore personalities, the question really is: can the machine continue to pump out extraordinary products. Not "can the machine pump out another iPhone".
I never worked for Steve, but do work with a lot of people who did. I never heard once heard someone say: Man, I sure wish Steve was still here instead of Tim.
Not that Steve isn't missed, of course. It's just that Tim is also great.
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[ 3.2 ms ] story [ 173 ms ] threadTim Cook has been adding blur from the first moment.
I also see an odd parallel in another corporate transition... even though it's the same leadership, is the new re/code more than a shadow of the old All Things D?
Edit: whoever wants to give some meaningful arguments can maybe use some comparable company as an example.
AAPL Mkt cap: 531,84B
MSFT Mkt cap: 382,79B
http://www.streetinsider.com/dividend_history.php?q=aapl
http://www.streetinsider.com/dividend_history.php?q=msft
Apple is ridiculously "undervalued" compared to any peer in the industry. It is a money printing colossus.
Having said that, the market seems to get shivers around $600B, and that psychological barrier imposes a friction that makes the rules of the game change. No one can stay above that for long, and in the case of Apple its profoundly out of scale numbers makes everyone simply put it in a different universe of valuation.
For instance, no one thinks that Apple has a big vault with hundreds of billions in it. Like all rational players, they hold most of their negotiables in short term securities. For tax reasons they also have been taking on debt in some areas rather than liberate cash from elsewhere.
But they have an enormous, enormous amount of wealth sitting virtually at a standstill. They have announced that they're going to spend a lot of it to buy back shares (boosting the value of the remaining shares), but they've been doing this so slowly they're adding to their pile quicker than they're spending it.
Swift may be one of the biggest releases in recent years. However, since it doesn't affect the public, is considered a non-release.
Compare: Since Steve returned to Apple (1997) to the point of iPhone being presented (2007) there were almost 10 years of "minor changes." iPod? "No wireless. Less space than a Nomad. Lame." (2001)
Steve Jobs died in 2011. This time now is then an approximate year of the "Lame" sentiment.
Apple can't take itself private unto itself, there must be a human owner or owners that own all of Apple stock as a private corporation.
Apple could team up with JP Morgan, Silver Lake Partners, and a dozen other firms to take itself private however, and they along with a likely small class of shareholders would own the private corporation (eg perhaps Tim Cook and Laurene Jobs would would choose to retain their large positions).
There is no possible scenario under which a corporation can exist and continue to exist indefinitely in any of the 50 US states without a human owner somewhere in the chain, even if said owner is buried under a dozen shell companies.
If you assume that Apple is going to borrow the 600 billion to buy all its stock, then you are effectively saying that whoever's left holding the "private" company is holding a 600 billion dollar loan. I do not share your optimism that anyone can get a loan large enough to buy Apple.
If you still believe this is impossible, think what would happen if a company on the day of the IPO decided to immediately and unilaterally reverse every transaction. Everybody would get their money back, and the company would simply get its equity back. It's as if the IPO never happened. Clearly not an impossibility. The only difference here is that because some time passed the investors want some extra return on their investment. That's not an insurmountable problem because Apple is rich.
Yeah, this isn't a thing the company can do. The board cannot "unilaterally" take shareholders' shares and give them money in return. They can initiate a buyback, but that means buying shares on the open market, and they'd still be a public company even if everyone sold back their shares. Or they can propose a buyout, but that requires a shareholder vote and typically external money.
The first scenario still results in a public company, just with fewer shares. Neither scenario results in the company owning itself.
apple is diversifying, if the car rumors are true it means that they are trying something totally new. its just that building a revolutionary car takes a lot more planning and effort than creating a new iteration of iphone.
Jobs rejoined Apple in 1997 when turnover was $7.078bn, after which turnover declined to $5.36bn in 2001 before recovering to $8.28bn in 2004.
So Apple did better when Sculley was in charge ($0.98bn in 1983 to $8.00bn in 1993) than in the next decade, when he wasn't ($8.00bn in 1993 to $6.02bn in 2003).
What Sculley didn't do was successfully introduce non-Mac products (iPod, iPhone, iPad), which Jobs did. The jury is out on whether Cook can do that too.....
Apple without the return of Jobs wouldn't exist - it wouldn't have innovated in anything. But without Sculley to give it some solid ground for a few years, it would probably have gone bankrupt.
Next few years will be interesting.
So I would not say that Apple failed to think about the future under Sculley. It's not easy to understand or describe why Jobs succeeded as wildly as he did in his 2nd tour at Apple. If it was, everyone would be doing it. :-)
One thing I rarely see discussed is the importance of the time in which Steve Jobs succeeded. The success we ascribe now, in hindsight, to Jobs' incredible leadership, might be in part the result of just a good match between what Jobs could do, and what could succeed in the market at that time.
His principles did not really change that much, actually--he always believed in owning as much of the tech stack as he could, and in producing integrated products with custom hardware and software. That approach was too expensive and inflexible to compete against Microsoft PCs the first time he was at Apple. It failed at NeXT. But it succeeded wildly the second time around, at Apple.
Would Apple be doing much better now under Steve Jobs' leadership? I don't think it's entirely clear. Some aspects of Apple's success continue to match up with Jobs' vision, but the areas in which Apple seems to have the most challenges--services and interoperable ecosystems--were never really Jobs' strong suits.
because iOS and Aluminum.
1) Inertia. The flick page scrolling single handily changed touch. I would bet against the iPhone ever taking off without it.
2) Locked down app store. The OS itself is never taken down or modified by apps.
3) Power management. Apps weren't allowed to stay running, and even now silently kill in the background with little visual indication.
Milling computers out of Aluminum was a very innovative decision.
Sculley was more of a manager, Jobs was a dictator. Once Jobs was back, he was somehow able to lead the company in a near-authoritarian way, and despite many flukes, it allowed the company to try many things that would not be readily accepted by an all-powerful committee.
One authoritarian that is wrong half the time is better than a committee that is not-wrong 100% of the time. The former tries a bunch of stuff, the latter doesn't really try anything. (And to me that's what got RIM and Nokia killed).
I agree that Jobs was a special talent who could command the organization. I think Cook is emphasizing collaboration because he knows he can't lead Apple the same way Jobs could. Probably no one can.
http://a16z.com/2010/04/28/why-we-prefer-founding-ceos/
The story plays out over and over again in the tech industry. Larry & Sergey were great innovators but terrible managers; if you ask Googlers who were there in 2000-2001, Larry made some very basic management gaffes that almost destroyed the company. Eric Schmidt's genius was in being able to maximize the value of the Search product cycle while still giving the founders enough latitude to champion innovative new products like GMail, Maps, Android, Chrome, and YouTube. And then he turned the reigns back over to Larry when the Search product cycle was just about maximized, because the industry was facing a period of unusual uncertainty that required the ability to spot new product cycles.
With Cisco, the visionary founders were forced out by VCs, and as a result, the company has had to buy innovation by spinning off startups, letting them innovate, and then folding them in through an acquisition process.
Microsoft remained undisputed king of the PC industry for decades under Bill Gates, but as soon as he left, innovation basically stopped. Ballmer managed to dramatically increase revenues and has built something like 6-8 billion-dollar businesses, but there were no new product cycles under him.
If you look more in the way what was possible, Apple was mostly a marginal player, and its peak was in 93. Eventually the market share started declining rapidly even though the industry was still increasing.
https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=image...
Of course, that massive expansion was kicked off by Windows 3.1 and then Windows 95.
Microsoft's annual turnover went from $3.75bn in 1993 -- less than half Apple's -- to $32.19bn in 2003, which was 5x more than Apple.
Dell is perhaps an even better illustration. Its turnover grew from $2.9bn in 1993 to $35.26bn in 2003.
Apple's "market share started declining rapidly" after 1995 (when it reached $11.06bn) because it couldn't compete with Windows 95.
OK, but remember that Microsoft's only significant "variable costs" (cost per unit sold) were the costs of stamping CDROMs and providing basic tech support, whereas Apple (and Dell) incurred all the variable costs involved in making whole computers, so Microsoft's "gross margins" (turnover minus cost of goods sold) was much higher than Apple's.
Supermarket chains have tremendous turnover, but their gross margins are around 1% in contrast to Microsoft's margins in excess of 30% in the 1990s -- and Apple's sky-high margins of recent years -- and IBM's sky-high margins before they lost their dominance during the rise of the personal computer in the 1980s.
My point (since we are talking about CEO performance) is that Microsoft was probably much more profitable than Apple already in 1993 although the ratio definitely increase in the late 1990s as you point out.
In the 1990s, Microsoft also had CD manufacturing and packaging costs, but those have mostly gone away now.
In a competitive market, hardware generally results in manufacturing_cost+plus_profit pricing, which drives margins close to zero. That's what happened to the PC OEMs. Apple makes better margins because it doesn't use cost-plus pricing: it picks whatever price it thinks the market will bear. The higher margins are justified by product design, branding, saturation advertising and/or whatever. That's how IBM worked as well, until it had to face competition from PC clones.
They're different business models, but Sculley took a bet, essentially thinking that there was more turnover (and profit) in selling PCs for $2,500 than there was in licensing software for $50. He was wrong in the 1990s, but maybe times have changed ;-)
IBM has got rid of as much hardware as possible and shifted its focus to high-margin licensing, and it's not doing too well....
That's just the marketing / planning side of things. He wasn't that great at setting directions for technology, either.
What made Apple the thing it is today is their pinpoint and high quality products for each sector they're in, and their willingnes to take initiative and introduce radically different stuff.
I'm sure the dotcom bubble played a role in this (i.e. Job's leadership however effective or ineffective it was, wasn't solely to blame).
*For those (like me) who didn't know, turnover is the net sales generated by a business,
That ignores the Apple Watch, which has basically created a new product category and proceeded to immediately account for more than half the total sales in that category. The Watch has outsold the iPhone during its early days, as well. For any other company, this would be reported on as a great triumph. Unless you have wild fantasies that Apple is supposed to magically produce an iPhone-sized business every two years, even though no other company in the history of money has ever produced an iPhone-sized business even one time. Double-digit millions of units of sales, first year, for a brand-new product that nobody's ever spent $400+ per unit on is pretty good.
What?
Did they invent the smart watch? No. Did they innovate and start a new chapter of the category? I think so.
Nonsense.
I'm in the camp of believing Apple's product line-up is too big. It's having a huge negative impact on their software quality too.
Sport: cheaper model, a little better for athletic activity (screen is more impact-resistant but less scratch resistant)
regular: main model, styled more like a classic watch, screen is more scratch resistant but less impact resistant
Edition: made of gold, super-expensive
The Edition watch specifically isn't going to be confused with the other two models, and the Sport/regular split seems pretty straightforward to me.
Why would I get a 9.7-inch iPad Pro over a 9.7-inch iPad Air 2? What's the difference between an iPad mini 2 and an iPad mini 4, and what happened to the iPad mini 3?
They ought to just have three iPad models, distinguished by size: iPad Pro (the 12.9-inch model), iPad Air (the 9.7-inch model) and iPad mini (the 7.9-inch model). That would make it much easier to tell the difference and decide which one you want.
phones, laptops, tablets, desktops, cloud.
iPhone mini, air, pro
macbook mini, air, pro
it's also probably time to end the tick/tock s vs non-s naming and just count up.
leave a full speed i processor in the Air, and let the Mini use the m processors.
Jobs famously reduced the product range to a 2x2 grid--desktop and laptop, pro and consumer.
But in each of those boxes, there were a number of options. In addition to different "speeds and feeds", there were even color differences. At one point, taking into account configurable options, there were over a dozen versions of the iMac alone.
The iMac came out in 1998, iBook in 1999--and that filled out the matrix. But then the iPod came out in 2001, and the Xserve in 2002. And then of course each of those expanded into different versions and options. Think of the variety in the iPod line.
Jobs also took Apple into entirely new businesses fairly quickly, like Internet hosted services. Itunes is the most famous, but Apple did not even have an online store until they built one under Jobs' leadership.
Tim Cook has a few things over John Sculley.
A big difference is that Tim was at Apple for decades before taking over as CEO. He joined Apple in 1998 as an SVP, which means he was part of Steve Jobs' leadership team for the entirety of Apple's resurgence. The article says:
> Jobs obviously saved the company years later with the iMac, iPod, Macbook, iTunes, iPhone and iPad.
Tim Cook was part of the Apple leadership team for every single one of those products. There hasn't been a "Steve Jobs era" followed by a "Tim Cook era." There was a "Steve Jobs + Tim Cook era" and now it continues as a "Tim Cook era."
And other people too, of course. Ctrl-F in the article for "Ive"--no results. An article about the past and future of Apple that doesn't mention Jonathan Ive? Looks like another in a long line of "cult of personality" articles that ascribe all success--or failure--to a single person, the CEO.
There are many other differences from Sculley. Tim Cook has been Apple CEO before--this is his 2nd turn at it. He's a believer and defender of Apple's culture. He personally understands computer engineering. He has personal principles that he advocates for. Etc.
Apple has always had an ecosystem of second-guessers telling it what it should do differently. The greatest strength of Tim Cook as CEO is that he, like Jobs, doesn't listen to those folks.
The iPhone is an extra-extraordinary product, but even in retrospect it wasn't considered as amazing when it came out. The watch reminds me of the iPod in terms of when it entered the market (somewhat early, after others had probed and validated it a bit) and under-the-radar adoption rate.
If you ignore personalities, the question really is: can the machine continue to pump out extraordinary products. Not "can the machine pump out another iPhone".
Not that Steve isn't missed, of course. It's just that Tim is also great.