Here are four things that Apple believes that explain the unexplainable:
1. Everything Apple sells is an Apple product: Everything Apple offers on iTunes is viewed by Apple in the same way they view music: They’re all Apple products… There’s a great scene in the upcoming movie, “Me and Orson Welles,” in which Welles responds to a fellow actor’s complaint that ‘he is an arrogant, selfish…’ with the line: “I am Orson Welles, and every single one of you stands here as an adjunct to my vision. [If] you don’t like the way I work here, there’s the door.” That, in a nutshell, is Jobs’ view of the relationship between Apple and its developer community.
2. Apple products are disposable: Apple makes high-quality, durable gadgets… But don’t let that fool you into thinking Apple wants those products to enjoy years and years of use. Apple expects you to dump your old product and buy the new one just as soon as it comes out. And they don’t expect you to sell the old one to someone else. There’s no such thing as an old Apple product. There is only the current Apple product, and trash.
3. Nothing exists unless Apple sells it: In Steve Jobs’ world view, nothing exists outside the Appleverse. People don’t read because Apple doesn’t sell a reader. Mark my words, when Apple ships its tablet or some other device that can be used for the serious reading of books, people will read again.
4. Apple doesn’t want to be a successful business: It has no interest in… imperialist expansion. Apple is interested only in surgical strikes into this business or that product category, where they can solve design problems others have failed to solve… Apple’s choices in markets it gets into make no sense, unless you understand that they don’t want to dominate industries, or even maximize revenues. They just want to design and sell better products that will affect user experience in markets where that’s an achievable goal.
Read more in the full article here.
MacDailyNews Take: Apple’s goal isn’t to make money. Our goal is to design and develop and bring to market good products. We trust as a consequence of that, people will like them, and as another consequence we’ll make some money. But we’re really clear about what our goals are… We try not to bring out another product that’s just different. “Different” and “new” is relatively easy. Doing something that’s genuinely better is very hard. – Jonathan Ive, July 2009
[Thanks to MacDailyNews Reader “Robert S.” for the heads up.]
I love the nobody reads until apple has a reader.
Classic
“Apple’s goal isn’t to make money. Our goal is to design and develop and bring to market good products. We trust as a consequence of that, people will like them,”
————————-
Thats an easy thing to say when you’re making gobs of money. Although I’d be willing to bet that back in 1997, their goal was to make money in addition to making great products.
I believe number 1. and number 3. The rest is B.S.!
Nothing like a good dose of hyperbole to bring in those clicks…
Pretty good, although in my case and many others, older Macs become hand me downs, and most of them are still working.
When I started buying AAPL stock years ago for dirt cheap, there was a huge disconnect between widespread misperception versus the reality of the company. Even now, even among bullish investment analysts, so many still don’t get it. There are opportunities everywhere others make crummy devices. And Apple doesn’t ask the customer what they want, as microsoft says, they make things you never knew you absolutely have to have.
MikeK,
I think you’re missing something. When Steve came back in 1997 he killed Apple’s bad products and began developing the iMac. That was the computer that saved Apple and brought them enough money to survive. Why? Because it was a great product. It’s always been Steve’s approach, it just took some time to fully catch on.
Elgan is a numbnut.
Apple products are not disposable, nor are they trash.
Other products exist outside of the Appleverse, but Apple chooses not to participate in those markets. When Steve said, people don’t read, he didn’t mean all people, he meant most people, and statistics prove that he is right, most people read less than 1 book a year. The rumored book-reading tablet is just a diversion. The iTab is NOT primarily for reading, but he’ll let you think that. Just like the iPhone is not primarily for phone calls, but Steve let you think that.
Apple wants to be a successful business. It’s business endeavors are all tied together by software, by OS X. It wants to maximize profits, but that is SECONDARY and a result of making great products.
So, I give Elgan the first point, but the other three are just nonsense, with a little truth thrown in.
Note that (to my understanding) the Appleverse is not just Apple branded hardware, but anything that is sold at an Apple Store.
That’s simply the way it is. So, you’ll have to wait until he is ready. And if you are doing something he doesn’t like – such as playing DVDs or actually BUYING movies to own or looking at a matte screen – get ready to stop when he says stop because, my friend, it’s over.
Yes, he’s changed the world and you, my friends, are his subjects.
“People don’t read because Apple doesn’t sell a reader.”
Why is it they don’t read, then?
Oh! Missing comma. People don’t read, because Apple doesn’t sell a reader.
bildad,
And before a few years ago no one liked to watch movies on small screens like the iPod.
Money automatically follows and rewards Excellence and Superior Quality in everything.
Apple expects you to dump your old product and buy the new one just as soon as it comes out
that’s bullshit! When snow leopard came out, Jobs was clear not everyone needed this new os and he made a list on the apple site and in the presentation who would benefit from it. Hence the price being so low.
Apple doesn’t tell me that my 3 year old iMac is crap and that I need a new one. I don’t see ads or campagns telling us to always buy new.
That Ive quote sums it up and is why I love Apple.
It’s like Bobby Knight said once. Our goal isn’t to win, our goal is to play great basketball, and winning is a result of that.
M$ is the imperialistic contractor and Steve jobs is the mike holmes who comes to the rescue. Not only doing things right the first time but opens your eyes on so much you’ve missed out. Then makes some money but in the meanwhile was so happy to fix things and make it right
I think #4 is what the analysts haven’t figured out yet. This is why we keep hearing things like “Apple should build a netbook.” or “Apple should offer shrinkwrap OS X for PC’s.”. The analysts are right that Apple could sell a boatload of these products, but Apple doesn’t care to. If the product doesn’t yield an “Applesque” experience, then Apple won’t do it, no matter how many they might sell.
MDN Magic word: “points” as in “Full points for someone who gets it.”
I’d call this article cynical, extreme and almost totally worthless.
breeze: “Money automatically follows and rewards Excellence and Superior Quality in everything.”
If that’s true, why is Microsoft still worth so much? Why have Anheuser Busch products dominated the American beer market for decades? Why is there a McDonalds every two miles across the U.S.?
I keep reading about how “competition is good” and “market forces will prevail” and so on. I’m sorry, but if you look closely enough, you’ll see plenty of really good products and companies that failed while other mediocre, or even bad ones, succeeded. Sometimes it’s because of dumb luck, like Microsoft’s. Sometimes it’s because of better marketing or PR, which we all know can make a turd (whether company or product or candidate or whatever) look like gold.
How about we all agree that competition CAN BE good and that market forces, under the right circumstances, CAN prevail. But recognize that they don’t always.
Sorry. Carry on with the thread at hand.
aka Christian:
One is not exclusive of the other.
Quality and excellence will always reward especially if they are pursued with that objective as opposed to the goal or focus of primarily making money.
$30 billion in cash, wish I was that unsuccessful!
BUT – Apple could double market share 5% exponentially year-by-year to squash MS by simply cutting profit margins to 20%. There would be no loss in market value – it would skyrocket, actually – because the increase in volume would negate the loss in profit margin. Volume volume volume. Look at Wal-mart. McDonald’s.
Of course, that would make Apple all so common. Jobs being the elitist arrogant billionaire that he is simply doesn’t want just anyone to possess his toys. All you have to do is look at the man’s politics to understand what he really thinks.
PS: not everyone knows the difference between shit and shinola, but there’s enough of those that do that make the pursuit of quality and excellence always pay off.
I disagree with #2, as I write this on my “Trash” 2007 iMac, which helps me make money every day……
Mike Elgan is still a low life.
#2 is rubbish, but the rest is close to right. but in the appleverse, close is never good enough.
the article misses the theme that apple creates a value proposition that the consumer accepts. by doing this, the margin can be good enough to sustain the company without slashing their wrists (prices). that value proposition is usually good enough that there is no real competition.
another theme is apple is patient enough for consumers to become educated on their value proposition. apple’s risk management parks extra cash partly for that purpose. they will never have to call dave ramsey.
“Apple does not want to be a successful business”.
Well they are successful. But they would be more successful if they offered a Matte screen option across the board. I just received my factory refurbished 15″ MBP w/matte screen. It’s beautiful! There is a window to my right and behind me. And a lamp to my left. No reflections whatsoever.
Goof ball…
Computerworld’s Mike Elgan wrote that the Zune “scares Apple to the core” and predicted that Microsoft would “leverage the collective power of Windows XP, Windows Vista, Soapbox (Microsoft’s new ‘YouTube killer’) and the Xbox 360” to steal Apple’s business.
1. Microsoft is hatching a consumer media “perfect storm.”
2. The Zune is social and viral.
3. Zune may have more programming.
4. Zune’s screen is better for movies.
5. Zune is actually pretty cool.
Even if Apple is able to retain its lead, it could still be hurt — badly — by the Zune, which will capture mind share, grab market share and squeeze Apple on pricing.
Apple is scared. And for good reason.
“BUT – Apple could double market share 5% exponentially year-by-year to squash MS by simply cutting profit margins to 20%.”
Prove that that would happen. I worked for an auto manufacturer in the parts marketing department. We did a promotion to dealers every month which did exactly what you wish for.
We accomplished two things by that. 1: We pulled unit sales ahead by a few months, thereby causing a corresponding dip in sales a few months later. Provable dozens of times.
And 2: sold product for 20% less than necessary.
Nearly killed the company because the people marketing the cars were doing the same thing.
Fortunately, intelligent people who understood the the value vs price relationship intervened and slapped down the marketing clowns. Good to see that happening once in a while. The company survived, but just barely.
Apparently, Apple needs a translator, because people just don’t get what they mean when they explain themselves. Ok, I’ll take a swing at it:
1) Apple takes responsibility, to a degree, for everything it sells that it did not make. Not in terms of warrantee, of course, but they understand that people want a certain type of overall experience and Apple is going to try to create that package, not just sell some products and behave like a “middleman” on the third party products it sells. If someone else doesn’t fit into the experience, as Apple sees it, Apple sees no need to include them.
2) This one is the greatest distortion. Apple is interested in innovating its way to success, that is their strategy. That means they don’t/can’t prioritize backwards compatibility as much as others ( eg, MS). Also, they care are more about doing something well than putting in all the features in early versions of a new product, but as a business they need to start selling those early versions. Neither of these does mean that they don’t try to build products that last–witness they higher reale value of Macs compared to other computers.
3) Apple makes judgments about what most people “really” want–sometimes, like video on an iPod they realize they were mistaken, or they figure out how to do it better than others and decide that makes worthwhile, so they decide to create the product.
4) Of course Apple wants to be a successful business, as ONE of its goals, not the only goal. But Apple has decided that the best way for Apple to do that is not by spending their time focusing on how to make money, but by spending their time focusing on how to make great products.
Ok, so am I wrong about any of that?
As a 17 year Apple veteran, now retired, I can tell you that if Mike Elgin is serious in these beliefs then he has no idea what he is talking about.
But, it looks a bit satirical to me.
Mike Elgin just needs to learn to articulate his thoughts and expand his ability and vocabulary to describe, describe or summarize philosophies. Wouldn’t hurt if he knew how to write too.
kenh
“BUT – Apple could double market share 5% exponentially year-by-year to squash MS by simply cutting profit margins to 20%.”
Prove that that would happen. I worked for an auto manufacturer in the parts marketing department. We did a promotion to dealers every month which did exactly what you wish for.”
Speculation is only verified by action, then facts. Apple produces the most highly desired computer products (the iPhone is essentially a computer) in the world, arguably. A price cut would drive demand. The problem, question is, could Apple prepare to keep up with demand. If so, then I believe such a reduction would demand. The move would have to be coupled with an outright admission on Apple’s part that the reduction is made with the goal of gaining market share to give buyers and businesses a true CHOICE of computing capability. OSX versus Windows. Which is the better experience, the most productive and the most secure? In ten years MS would be history, a small version of itself, producing only its Office products. We all know MS would abandon any legacy version of its OS.
“We accomplished two things by that. 1: We pulled unit sales ahead by a few months, thereby causing a corresponding dip in sales a few months later. Provable dozens of times.”
MS’s sales are also in a corresponding dip when compared to its long term dominance. All companies experience ups and downs, ultimately few surviving to be its original essence. Economic times also dictate success. But so far, Apple has thrived in the current downturn. I believe if Apple wanted to dominate in computers (its OS, actually) as it does with the iPhone (still a computer), it could by true competitive pricing.
Period.
Then if you don’t care about money, give some of the 36 billion bucks you are sitting on with nothing to buy back to the frigging shareholders.
Never read such a bunch of bullshit in my life.
” I believe if Apple wanted to dominate in computers (its OS, actually) as it does with the iPhone (still a computer), it could by true competitive pricing.
“
It dominates where it wants to dominate. It does not care if it dominates in terms of unit sales, but in the value vs. cost relationship which means that the customers who buy them are satisfied with the value for the price paid. As a result, Apple makes a profit, which makes the whole cycle sustainable and repeatable. Sustainable and repeatable, if you want to extend it to unit sales, creates its own kind of volume.
Period
“Oh! Missing comma. People don’t read, because Apple doesn’t sell a reader.”
People, don’t read because Apple doesn’t sell a reader.
Now it’s correct.
Mike Elgan is a carbuncle on the world.
He may be changing tack – but it’s too little, too late… and cynical.
He wouldn’t if he didn’t have to.
“Nothing exists unless Apple sells it”
Sorry, but the “everything must be made by Apple” philosophy went out the door when Jobs came back.
Steve’s done more to bring industry standards to the Appleverse than Scully ever did.
Belief #5. Apple will take care that your experience when using Apple products is as elegant and hassle free as possible. Third party entrepreneurs are only invited to the part if they don’t violate rule #5.
Shareholders want you to either make money or get the hell out of the way. We do not give a shit if you call it making great products, the Age of Aquarius or if you put dumbass, clueless clowns like Al Gore on your Board.
Its all OK … but make money or get fired. Period.
There’s always an ulterior motive to such articles, and so it’s important to recognize where they’re coming from. In this case the author is writing for IDG, which owns Macworld and PCworld, both of which–for differing reasons–have a love-hate relationship with Apple. Macworld got stiffed last year when Apple pulled out of their showcase conference, and PCworld is, well PCworld.
And remember, IDG does the “For Dummies” series…
If it wasn’t for attempting to be salacious, it’d probably have hit the mark quite handily. However they go over the top in order to achieve clickworthyness. However, you can find well written information everywhere. I bookmarked a good read I found awhile back.
http://www.makentosh.com/tipsfromtheiceberg/Blog/Entries/2008/6/18_The_Grandest_Understanding.html
Daniel Dilger wrote a scathing piece about Mike Elgan and the hate he harbors for Apple…
#2 is BS.
I’ve worked in computer service PC/Mac and see far more people using older Macs than PCs. Sure, new Apple products are cool and exciting, but people *do* hang on to and use the old Apple products for a really, really long time.
I’m still using my MacBook Pro from 2006. Meanwhile others from the office are on their 2nd or 3rd PC. I know that’s only anecdotal, but it’s my experience pretty much everywhere I go.
For non-anecdotal evidence in regards to #2, take a look at prices for used Apple equipment. Apple computers, iPods and iPhones have always held their value…actually annoyingly so. It would be nice if used Apple products dropped in price more for those of us looking to buy used equipment that would still meet our needs.
“kenh
[Apple] dominates where it wants to dominate. It does not care if it dominates in terms of unit sales, but in the value vs. cost relationship which means that the customers who buy them are satisfied with the value for the price paid. As a result, Apple makes a profit, which makes the whole cycle sustainable and repeatable. Sustainable and repeatable, if you want to extend it to unit sales, creates its own kind of volume.
Period”
No argument there. Part of my post was about the arrogance and snobbishness of Jobs and the real reason he doesn’t really want to spread the wealth of OSX superiority or Apple computers. That would be too “common.” He wants to be the Mercedes to Gates Yugo.
But to address your point, no matter the value versus the price, only an IDIOT doesn’t want to pay less for equal value. Apple has seen declines in its iPod sales as penetration reaches peak-point. It will have to migrate iTouch functionality to lower end products to continue or improve those sales and continued dominance in the MP market. Profit margins being what they are, my argument has always been lower the prices and increase the volume. This doesn’t affect profitability, but does increase stress on production, and demand for lower prices (see the slim margins for the PC producers) as penetration increases. But if Apple were to gain 95% market share, the wealth created to get to that point dwarfs a predictable decline.
What’s funny is, that MS could squash Apple by reducing the cost of Windows OS to a simple flat rate comparable to Apple’s, get rid of all those various and expensive versions. Of course, computer makers might not like that since it might slow the upgrade cycle. But businesses that need to upgrade wouldn’t give a second thought to Apple because of the dramatic differences. x said it best:
“Shareholders want you to either make money or get the hell out of the way. We do not give a shit if you call it making great products, the Age of Aquarius or if you put dumbass, clueless clowns like Al Gore on your Board.
Its all OK … but make money or get fired. Period.”
@Cubert
I’m sure I don’t speak for the masses. But I will say, I find watching movies on a small screen (iPhone/iPod Touch) extremely wearisome.
I love me iPhone I just don’t think it’s a movie platform. Methinks the rumored tablet with a larger screen may make watching a movie on this device tolerable.
PS: Me comment at the top was in support of the idea that Apple usually does it right. If someone can make a reader that appeals to the masses it probably will be Apple. Not just because it’s a reader though. It will be a “do all” device, games, internet, communications (wave), navigation, blah blah blah, etc. You get the drift. Mr. Jobs has an uncanny vision for seeing what we do not.
I think Apple are concerned about making money, the $36 billion is kept in case of a rainy day dont forget Apple nearly went banckrupt 12 years ago.
Or they could just be saving to buy Nvidia or a large part of Intel then get these companies to design special chips just for Mac’s this would turn the comptuer industry upside down
This article was as much a waste of time as the usual flamebait subjeccts. I realized that at #4 (remember it’s on a business site.)
You seriously don’t think that Steve Jobs cares about profits and margins? About eclipsing Google in market cap and overtaking MS?
No… SJ’s ideas about business are the same as his about design… cleaner next level thinking. SJ thinks he can run a MORE successful business that way. And he’s right.
Clearly the author has no idea what it means to be a successful business.
@ smitty
BUT – Apple could double market share 5% exponentially year-by-year to squash MS by simply cutting profit margins to 20%. There would be no loss in market value – it would skyrocket, actually – because the increase in volume would negate the loss in profit margin. Volume volume volume. Look at Wal-mart. McDonald’s.”
i almost agree, but not quite. even though apple has a superior product, people dont like change. they have to want it, and when they decide they want it, they will be willing to pay the premiums to get it. i believe apple will cut its margins to increase share but it will be done slowly but surely. apple’s steadily growing share will encourage more people to convert. that way the gains will come naturally. and that is how the capitalists-who-think-they-are-socialists that run my favorite company will come to dominate the world!
IDG, now thats an outfit with little or no credibility.
“Profit margins being what they are, my argument has always been lower the prices and increase the volume. This doesn’t affect profitability, but does increase stress on production, and demand for lower prices (see the slim margins for the PC producers) as penetration increases. But if Apple were to gain 95% market share, the wealth created to get to that point dwarfs a predictable decline.”
Too many if’s.
Do you really increase market share? In my experience, you can get a short-term bump followed by the corresponding dip that I talked about. And you paid for it with less revenue.
I found that to be true in 3 different industries.
The competition just matches you in lowered price, (or appears to depending on the real value) What happens is that both of you lower and lower prices to the point that neither of you survive.
Without profit, none of us will have a job to go to.
There won’t even be a federal stimulus money to cover your butt, since ALL government revenue comes from taxed profits. I know you know that, but a frightening percentage of people do not know that.
Hate to get political, but when asked where stimulus money came from a recipient said (exact quote) : “Well, I guess it came from Obamas’ stash!” Then she laughed. Tragic.
We all know where it comes from, really, The printing presses, and if we keep going it will not be worth any more than Monopoly money.
No wait, Monopoly money is cheaper to print.
Large marketshare what does that acchive? More money!!!!
Well no if Apple halfed their profit on one mac from 30% to 15% they would have to sell 2 macs to make the same profit as they currently sell with 1.
This is crap business sense look what happened to GM cheap cars low profit margins and large marketshare no wonder it went Bankrupt!!!!!!!
Apple should stick to its current pricing structure and business model the same as other companies like Audi, Prada, Bang & Oulofsen
Also large marketshare also means more people have that item and more common it becomes.
As a result it becomes less desirable you can see an example of this with Calvin klein the designer brand expanded into everything and sold eveywhere now the brand is not worth much as it has lost the factor of being desirable
@handsome snitty,
Your idea works on paper, but not in the real world. Besides, M$ is dying
a slow death one little nibble at a time.
It simply ain’t about money or marketshare…it’s about the satisfaction of continually kicking all the competitions butts from all angles. Fight it, and you only get kicked more. Just accept it, and be happy you still have a paltry slice of pie left.
Has anyone on this forum seen Dell’s last report? Enough said.
What everyone out there fails to realize is that Apple is a big company with the agility, flexibility, and creativity of a very small company. It’s a contradiction that defies all the conventional wisdom and that drives all the other big companies mad as they lumber around like glaciers.
Is this guy Elgan for real? Talk about your RDF.
No insult intended to Jonathan Ive, but in my life experience, when some says it isn’t about the money… it’s about the money.
If it wasn’t about the money, Apple wouldn’t charge a premium for their product. It would be absurd. No company who truly believed such a thing about themselves would.
I’m not saying Apple products are over-priced or expensive. I think they are worth the price you pay, but they are premium products and their prices reflect that.
What the hell is Elgan smoking? He seems to have confused Apple for Microsoft in three out of the four things we “need to know”.
As for number four, this might come as a shock to you, Mike, but Apple DOES want to be a successfull business. I’m not sure where you heard they have failure as a goal, but they don’t.
Something is wrong with this man.
This article is a bunch of Apple-bashing BS by yet another oh-so-clever wanna-be pundit.
What a relief! Item 2 means that I can finallygrease up from my G3 minitower that still sees daily use.
finallygrease = finally trade
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…interesting slip of the fingers
Elgin is a low vision Twat.
You’ll have to rip my mac from my cold dead hands.
Windows is dying… a slow prolonged death.
“Thats an easy thing to say when you’re making gobs of money. Although I’d be willing to bet that back in 1997, their goal was to make money in addition to making great products.”
which is why at the time they were doing neither.
I think this is a humorous and entertaining piece, and not meant to be taken too seriously. But #4 makes me laugh.
> Apple doesn’t want to be a successful business
They sure are doing a terrible job at NOT being a successful business!
“Apple products are disposable.” Tell that to a school district who has invested big money in PPC machines just a few years ago only to find that OS X Tiger is no longer supported. Even the evil Microsoft will support Windows XP until 2014. Bad Apple.
@carlson
don’t worry about the school districts because their PPC products are still upgradeable to 10.5.8.
Get a clue before you start bashing Apple, k cupcake?
Actually, the objective reality is that one can no longer buy 10.5.8 from Apple so there is no real upgrade path available for PPC users if they were still using Tiger, especially if they are stuck with computer labs full of old G3 iMacs as many school districts are given budgetary constraints.
Why don’t YOU check out the facts before you get all snarky about it, G4Dualie.
I stand corrected. Leopard is available from Apple to PPC users, not through the Apple Store, but over the phone for $129.
It would still be better if Apple continued supporting Tiger for their older hardware… like Microsoft still does with Windows XP, Tiger’s equivalent on that platform.
Oh, G4Dualie, we could still be civil to each other. Unless you were raised by a pack of wild dogs or something. Cheers…