Venture capitalist Roger McNamee, a founding partner of the venture firm Integral Capital Partners, thinks that “the marketplace confronting technology executives has changed radically from five or seven years ago, and the nature of the relationship between tech companies and Wall Street is almost unrecognizable compared with a decade ago,” John Shinal reports for MarketWatch.
“McNamee [said] that the worst thing tech CEO’s can do is respond to the short-term demands of investors. On the other hand, executives that stick to their strategic vision, even while thumbing their nose at Wall Street, usually reward their investors over the long term,” Shinal reports. “He pointed out that Apple Computer CEO Steve Jobs boosted research spending earlier this decade, even as other tech firms were slashing costs to preserve their income statements in the face of plunging stock prices.
That R&D spending push produced the iPod, which has transformed the company and driven its stock up more than four-fold in two years, even as Hewlett-Packard (HPQ) and other big firms once known for their innovation have languished. ‘If you see the management of a company you own responding to Wall Street, sell the stock,’ McNamee advised. Still, trying to guess near-term valuations is a fool’s game, McNamee said. ‘The iPod might be the most important consumer brand right now, but I couldn’t tell you what that means for the stock.'”
Full article here.
This isn’t exactly true; i think Apple’s R+D in the mid nineties was bigger, and SJ slashed it when he came back, only to slowly build it in very limited and focused ways (with great results).
The iPod was mostly outside technology, anyway.
I fscking rock
first post!!!!!!
Only if by “fscking rock” you mean “can’t count” or “type stupid shit” then yes, SPJ, yes you do!!
Hey, SPJ — “Go sell crazy someplace else. We’re all stocked up here.”
MOOOooo!
Longhorn BBQ at my place!
Yes, Steve Jobs did specifically state that Apple was going to innovate it’s way out of the dotcom bust. I think on CNBC, circa 2001 with intro Mac OS X v1.0. He is the true tech giant, not Mike Dell or Billy Gates.
“The iPod was mostly outside technology, anyway.”
You can probably say the same of their computers: hard drives, memory, graphics cards, optical drives, industry standard connectors, etc.
Apple’s biggest contribution isn’t always inventing (although they have invented some great technologies – FireWire, ColorSync, QuickTime). They’re biggest and most important contribution is innovation – finding a better way to do something. That, along with outstanding industrial design (referring to the usability as well as the look of the product) is what makes Apple an important technology company.
Much more-so than Microsoft and definitely more than Dell could hope to be.
‘If you see the management of a company you own responding to Wall Street, sell the stock,’ McNamee advised.
Now that sounds like a valuable advice. Another example for this is German carmaker Porsche. Two or three years ago, they stopped publishing quarterly results, switching to annual earnings reports. They were kicked out of the DAX index for it, but look how well they do.
Heroin –
It’s true to say that the iPod started life as somebody else’s project and was brought to Apple, but they also acknowledge that it was totally transformed by Apple’s involvement and that what emerged was a massively different product.
Other hard drive MP3 players were around before the iPod, but what impact did they make ?
Apple scrutinised every detail of the iPod as it was being developed. The interface was changed and tweaked constantly and always to make it extremely easy to use.
Essentially an MP3 player is just a hard drive and a battery in a box with some electronics. There must be a hundred different ones that have come to market in recent years, but the iPod was the first to get it right and has been unrivalled ever since.
The prototype iPod before Apple’s involvement would never have got so refined without Apple’s input and could never have succeeded in anything like the way that the resulting iPod did.
Starting a project is one thing, developing it into an iconic object is a much rarer skill.
Great quote: “Go sell crazy someplace else. We’re all stocked up here.”
Great movie.
Kudos, AlanAudio. We work with a guy who said of the iPod, “it’s just a hard drive, that’s all it is!” He just didn’t get it…
Then we bought him one as a reward for extra effort on a project. Boy, did perceptions change.
This is the one time “Elegance” and “Ease of use” has trumped “features” (and price) in the marketplace. I wish there were more examples…
got on the elevator at work yesterday w/a collegue who had a dell dj. he saw my shuffle and started asking questions about it, he refered to his dell (which has a 15 gig drive) as if he where embarassed by it. thank gawd for apples r&d for creating the shuffle.
I totally agree with AlanAudio that the iPod was refined and made what it was by Apple’s design genius. But still, it was not a product of R&D.
Research and Development means working on new technologies with the hopes that some of those new technologies will end up as products.
Apple had a LOT of R&D in the 80s and 90s, very little of which ended up in actual products.
Refining a product with outside technology, brought to Apple, is called “product design”. Not R&D.
Heroin-
When you’re talking about a new product that doesn’t exist in your current lineup, that says R&D to me. It is, after all, research and development. What else are you doing but developing a product? Once it’s released and you’re only talking about adding a bigger hard drive or whatever, then yeah, that’s no longer R&D. But by your definition, nothing Apple does would really be R&D because they aren’t inventing brand new technologies. That isn’t what they do, though, and I have to disagree with your assessment.