Speaking of, I sorely miss the AirPort Time Capsule* product line. It made backup of multiple computers a breeze and saved my skin in grad school when I thought I’d lost everything.
I never understood why Apple gave up this market to Netgear/Amazon/etc. It’s an instant buy, and the number of people in the Apple ecosystem has only grown.
When Apple sells their other hardware they can make money with other things that go along with it. App royalties, cloud storage, TV shows, movies, and music, accessories (watch bands, phone cases, more royalties especially with lightning stuff but also with MagSafe).
When you sell a router that’s it. You’ve got to provide security updates forever for free or convince your customers to upgrade at some point.
Some router companies are trying to do the service thing but I don’t know how successful that is.
From what I can see TP-Link’s annual sales revenue is reported to be $2.8 billion. That’s the world’s leading networking company in sales with close to a 20% global marketshare.
For comparison, Apple makes $8 billion per quarter just on home/wearables/accessories, which is only 10% of its total revenue. $385 billion in revenue for all of 2023.
That means if Apple put a bunch of effort into making networking equipment and took 100% of TP-Link’s marketshare, it would increase their revenue by less than 1%.
Whatever the number of iPad users is that pays for additional services, it’s a lot more than the 0% of AirPort Extreme customers buying anything that directly goes along with their network equipment. Apple sells dozens of accessories like cables, adapters, cases, etc. Plus, iPads can cost upward of $1,000 and have high profit margin upgrades at every price point (internal storage space).
Their network equipment didn’t drive Mac sales, it was really the other way around: a Mac user might consider Apple network equipment, but there was no strong driving factor that would send you that direction. Apple also couldn’t price their network equipment far above their competitors because it has very few differentiators. WiFi is WiFi is WiFi. For an iPad, Apple can charge more money because it has iPadOS which is only one of two choices in the mobile OS space. Network equipment is almost completely vendor agnostic commodity equipment.
Maybe doing Time Machine backups or streaming iTunes music over your network would lead you to AirPort products, but both bring in zero recurring revenue for Apple and have been made obsolete in terms of convenience and
customer preferences by cloud storage and music streaming/AirPlay.
Let’s not forget that Apple was never actually able to maintain any kind of market leader status on WiFi equipment. Their best case scenario of eclipsing a market leader like TP-Link never happened because their product line was simply not popular. That’s why it was discontinued in the first place.
All that can be easily explained by infinite greed. Cook cut all the small things that weren't making enough billions and that's it.
Oh, and he would like very much to sell you their overpriced lackluster cloud "service".
The reality is that with all the building block in place, Apple could have made a very interesting "personal cloud" solution, using one of their custom low power chip to make a device running a simplified version of macOS server, that could act as a router/backup/smart devices coordinator and all that jazz.
With many people having (almost) symmetrical fiber connection (at least with enough upload that access is realistic) it could have been a great product.
Problem is, after they sell you said device, you are good for quite a number of years and that can't fly in the vein pursuit of endless growth.
It was a great product line. I think they got out of that market for the same reason they killed the car, the market was getting over saturated and it was a race to the bottom.
But Apple never races to the bottom - they sell premium products that their customers pay a premium price for - the customers know that the hardware quality, integration and support are good [1]. I don't understand how a market that's crowded makes a difference to their value proposition.
[1] I owned two macBooks with butterfly keyboards. I know it's not always good.
Disagree with the criticism of current Apple vs Jobs Apple on the Apple Car. Of course Jobs could grow Apple by focusing on smaller markets. Apple was smaller then.
Now it’s a multi-billion-dollar juggernaut. Cook needs to keep it growing. So it needs bigger bets. Apple Car was just that. Some bets fail. Jobs had failures too. No risk, no return.
Average is probably a poor way of analyzing this. In my experience there's a bimodal distribution of tenure that correspond to your job hoppers and your long-term employees.
I believe you're going to see the lower average at places that have larger signing bonuses or other compensation that skews that way.
That's a good point, I was thinking that the more experience you have the more likely you might be willing to venture out and start your own thing. At least that's been my experience at non-big tech companies with the more senior people (20+ years experience).
> When I read about the 10 billion disaster that was the failed Apple Car development effort, I can’t help but think that current Apple leadership has abandoned all the entrepreneurship wisdom of their former CEO and co-founder.
Actually, that 10 billion dollar disaster actually makes me more happy. Many companies are very happy to sit on their laurels and just keep milking their cash cows without trying to innovate.
To put that 10 billion dollar number into context, Apple gets around 18 billion per year from Google just to be the default search engine.
When you get that kind of money, it makes sense to make attempts to create a new market segment. The 10 billion spent on the Apple Car was over several years.
Also, even failed endeavors can lead to experience. I would bet that the lessons learned from the Apple Newton probably helped shape the iPod and later the iPhone that became runaway hits.
It’s completely ridiculous that this effort is framed in this way, as if spending $10 billion was irresponsible and against the wisdom of their late Demigod founder.
Apple has so much cash that they literally can’t spend it.
If Apple wanted to get into unrelated large capital industries like oil, banking, healthcare,
or commercial aviation I wouldn’t blame them. Consider this example: more than half of US airline revenue is made up of credit card financing activities. They are banks first and airlines second, so it would make a ton of sense for Apple to get in on that type of industry.
Wasn't the Apple Car a Steve Jobs idea originally? Wikipedia says:
> In February 2015, Apple board member Mickey Drexler stated that Apple co-founder and CEO Steve Jobs had plans to design and build a car and that discussions about the concept surfaced around the time that Tesla Motors debuted its first car in 2008.
Mind you, Jobs had been dead for several years by 2015, so who knows how serious or committed he would have been to it if he'd lived.
In general, I have no problem with companies making bets on a variety of products. The bit about Apple not having the most resources stopped being true. They succeeded as underdogs because they saw what other companies were doing already, and then integrated those inventions into Apple's own vision of the world.
(The Airport is a great example of this. Apple did not exactly invent wifi.)
But now that Apple hovers at or near being the biggest tech company in the world from week to week, there's an argument that they have to be the ones to invest in early research and skunkworks projects, because they've bent the industry around them. Everybody is now reacting to the world Apple remade in their image, and there aren't as many companies doing wildly different stuff for Apple to purchase and integrate into a radical vision. So, it's only right for Apple to be doing this stuff themselves, and we should expect them to fail at it more often than they succeed because that's just how it works.
And I assume the reason they're not setting the world on fire as often as they used to isn't because of lack of focus, it's because Steve Jobs was a rare individual with a set of skills and, uhh, personal quirks that make him hard to replace.
I think this post is cherry-picking history. Jobs also had some disastrous projects chasing ideas outside of Apple's core competency. Newton, Macintosh TV, etc. He also had some grand slam moments that could have been described as trying to do everything. The iPod? Apple had nothing to do with the music industry. iPhone? where did THAT fit in with personal computers?
Rather than poking at the Apple Car project as an example of a company reaching too far, we should be paying attention to whether any actual lessons were learned.
The Newton ended up a commercial failure in the end (although for a while it was successful enough to support a few independent software companies, including one of mine), but a whole ton of the lessons learned from producing it were applied to very successful products following it, such as the iPhone.
I think a reasonable case could be made that the Newton was not a failure in the big picture, in the sense that without it, a couple of Apple's later efforts would not have been as good.
Newton and Macintosh TV were both when Jobs wasn't around, and he quickly killed off the spin-off "Newton, Inc" company and the Newton line when he returned when Apple and NeXT merged.
Jobs left Apple in 1985, and there hadn't been anything but one model of Mac by then, and he wouldn't return until 1997. The PC-like explosion of Mac models and various peripheral projects like printers, cameras, and PDAs happened without him.
Of the time they did have Jobs at the helm, he had a remarkable track record with new products outside of their "core competencies" as you put it. This includes the Mac itself, which abandoned wholesale their existing lineage of computers and software for a pretty different paradigm tuned for the non-technical customer.
He had some failures. The Apple III, arguably the first Mac (it really didn't gain traction until Apple loosened on things like expandability and fans that Jobs didn't want), G4 Cube, iPod Hifi, Ping, 3rd gen iPod Shuffle, Apple TV.
35 comments
[ 4.7 ms ] story [ 89.6 ms ] threadhttps://podcasts.apple.com/us/podcast/part-one-the-terrible-...
Available on apple podcasts...
* https://en.m.wikipedia.org/wiki/AirPort_Time_Capsule
Why sell a $150 network backup box when you can sell mostly-unused cloud storage (no hardware, no returns, no warranty replacements) for $120 a year?
They already had the product, the employees, and people were already loyal to the product.
When you sell a router that’s it. You’ve got to provide security updates forever for free or convince your customers to upgrade at some point.
Some router companies are trying to do the service thing but I don’t know how successful that is.
From what I can see TP-Link’s annual sales revenue is reported to be $2.8 billion. That’s the world’s leading networking company in sales with close to a 20% global marketshare.
For comparison, Apple makes $8 billion per quarter just on home/wearables/accessories, which is only 10% of its total revenue. $385 billion in revenue for all of 2023.
That means if Apple put a bunch of effort into making networking equipment and took 100% of TP-Link’s marketshare, it would increase their revenue by less than 1%.
Their network equipment didn’t drive Mac sales, it was really the other way around: a Mac user might consider Apple network equipment, but there was no strong driving factor that would send you that direction. Apple also couldn’t price their network equipment far above their competitors because it has very few differentiators. WiFi is WiFi is WiFi. For an iPad, Apple can charge more money because it has iPadOS which is only one of two choices in the mobile OS space. Network equipment is almost completely vendor agnostic commodity equipment.
Maybe doing Time Machine backups or streaming iTunes music over your network would lead you to AirPort products, but both bring in zero recurring revenue for Apple and have been made obsolete in terms of convenience and customer preferences by cloud storage and music streaming/AirPlay.
Let’s not forget that Apple was never actually able to maintain any kind of market leader status on WiFi equipment. Their best case scenario of eclipsing a market leader like TP-Link never happened because their product line was simply not popular. That’s why it was discontinued in the first place.
Plus network effects of having more devices "out there"
The reality is that with all the building block in place, Apple could have made a very interesting "personal cloud" solution, using one of their custom low power chip to make a device running a simplified version of macOS server, that could act as a router/backup/smart devices coordinator and all that jazz. With many people having (almost) symmetrical fiber connection (at least with enough upload that access is realistic) it could have been a great product.
Problem is, after they sell you said device, you are good for quite a number of years and that can't fly in the vein pursuit of endless growth.
More money, moaarrrrr....
[1] I owned two macBooks with butterfly keyboards. I know it's not always good.
Is there a good all-in-one you’d recommend?
Now it’s a multi-billion-dollar juggernaut. Cook needs to keep it growing. So it needs bigger bets. Apple Car was just that. Some bets fail. Jobs had failures too. No risk, no return.
According to this SO blog, Google had an average tenure of 1.1 years:
https://stackoverflow.blog/2022/04/19/whats-the-average-tenu...
Obviously this written before the big tech layoffs kicked off, but it's quite alarming if true.
I believe you're going to see the lower average at places that have larger signing bonuses or other compensation that skews that way.
Actually, that 10 billion dollar disaster actually makes me more happy. Many companies are very happy to sit on their laurels and just keep milking their cash cows without trying to innovate.
To put that 10 billion dollar number into context, Apple gets around 18 billion per year from Google just to be the default search engine.
When you get that kind of money, it makes sense to make attempts to create a new market segment. The 10 billion spent on the Apple Car was over several years.
Also, even failed endeavors can lead to experience. I would bet that the lessons learned from the Apple Newton probably helped shape the iPod and later the iPhone that became runaway hits.
Apple has so much cash that they literally can’t spend it.
If Apple wanted to get into unrelated large capital industries like oil, banking, healthcare, or commercial aviation I wouldn’t blame them. Consider this example: more than half of US airline revenue is made up of credit card financing activities. They are banks first and airlines second, so it would make a ton of sense for Apple to get in on that type of industry.
> In February 2015, Apple board member Mickey Drexler stated that Apple co-founder and CEO Steve Jobs had plans to design and build a car and that discussions about the concept surfaced around the time that Tesla Motors debuted its first car in 2008.
Mind you, Jobs had been dead for several years by 2015, so who knows how serious or committed he would have been to it if he'd lived.
In general, I have no problem with companies making bets on a variety of products. The bit about Apple not having the most resources stopped being true. They succeeded as underdogs because they saw what other companies were doing already, and then integrated those inventions into Apple's own vision of the world.
(The Airport is a great example of this. Apple did not exactly invent wifi.)
But now that Apple hovers at or near being the biggest tech company in the world from week to week, there's an argument that they have to be the ones to invest in early research and skunkworks projects, because they've bent the industry around them. Everybody is now reacting to the world Apple remade in their image, and there aren't as many companies doing wildly different stuff for Apple to purchase and integrate into a radical vision. So, it's only right for Apple to be doing this stuff themselves, and we should expect them to fail at it more often than they succeed because that's just how it works.
And I assume the reason they're not setting the world on fire as often as they used to isn't because of lack of focus, it's because Steve Jobs was a rare individual with a set of skills and, uhh, personal quirks that make him hard to replace.
Rather than poking at the Apple Car project as an example of a company reaching too far, we should be paying attention to whether any actual lessons were learned.
I think a reasonable case could be made that the Newton was not a failure in the big picture, in the sense that without it, a couple of Apple's later efforts would not have been as good.
Of the time they did have Jobs at the helm, he had a remarkable track record with new products outside of their "core competencies" as you put it. This includes the Mac itself, which abandoned wholesale their existing lineage of computers and software for a pretty different paradigm tuned for the non-technical customer.
Would any other company be called "irresponsible" for spending 6 days of revenue per year for R&D on a potential future product?
I highly doubt it.