Roger McNamee: Post-Steve Jobs, Apple’s already acting like a ‘dumb monopolist’

Elevation Partners Managing Director and Apple Inc. shareholder Roger McNamee discussed the iPhone 5 with Willow Bay [wife of Apple BoD member and Walt Disney Company CEO Robert Iger.] on Bloomberg Television’s “Bloomberg West” yesterday.

Some salient quotes from McNamee:

• I think Apple’s the most amazing thing I’ve seen in 30 years of covering the tech industry.

• [Apple] are the whole package… [It’s] an extraordinary thing for shareholders and, from a regulatory point of view, a little scary.

• Now [Apple is] trying to slow down Web applications on their platform; what’s called HTML 5… and you look at that and you go, guys, why are you doing that?

MacDailyNews Take: McNamee never gives any proof to back up his statement above and, we just checked, Web apps work just fine on our iPhones and iPads, thanks.

• When I look at Apple today, I see them doing crazy things like they laid off a ton of people who worked in the Apple Stores. The retail experience went down the toilet the next day, to the pint where there was this huge backlash and they were forced to rehire some of the people. And I’m sitting there saying, excuse me, why are you trying to cut costs? You’re the highest margin hardware business in the last 25 years, what exactly is wrong with your model? I look at Apple and… as a shareholder, it’s amazing, there’s nothing competitive with them at all today, but they are, already – it’s so quick after Steve died! – they’re already doing the things you would expect a dumb monopolist to do…. Which is to say, arbitrarily cutting costs on services that are part of your brand. I mean, they’re harming the brand by reducing the value of the Apple Stores… You always wonder, what’s going to be the end for a monopolist and you can see that Apple’s already doing the things They’re already doing the things that – it’ll take 5 years – but they’re doing the things that lead to becoming less successful.

• I have no regulatory concerns [with Apple] in the sense of… my impression is that the various regulatory bodies in charge of this, DOJ, etc., are just completely asleep at the switch, so Apple has nothing to worry about. I mean, I don’t this there’s a chance that anybody in Washington is going to look at this anytime soon.

• What I think is the greater risk is that Apple has created these massive silos within its architecture that the architecture itself is vulnerable… At the moment, Apple is standing in the way of [cloud computing] and that is a strategically bad idea for them. it’s abad idea for anybody whose products are as great as their to not do the best you can do.

MacDailyNews Take: Again, no explanation as to how Apple is standing in the way of cloud computing. What’s iCloud, Roger, chopped liver?

Direct link to the video here.

MacDailyNews Take: As for the retail stuff, while McNamee may be overblowing the actualities (down the toilet the next day, etc.), his point is dead on target. Mr. Cook et al. would do well to take it to heart and change their thinking. Think Different™, guys!

As we wrote on August 29: “This sort of thinking is a cancer that will eat away at Apple all the way to the core.”

As we wrote on August 17:

This… type of “thinking” will kill Apple faster than 10 lines of beige Performas.

If Cook can’t see that clearly, he needs to go, too.

Concerned Apple shareholders might want to email CEO Tim Cook directly and ask him what exactly he’s doing…

Related articles:
Report traces Apple Store ‘mistake’ all the way to Tim Cook; shift in emphasis from service to profits comes from Cook, say insiders – August 29, 2012
Reports persist of Apple Retail Store budget cuts, emphasis on revenue over customer satisfaction – August 28, 2012
After being Browettized, Apple Retail touts numbers – August 20, 2012
Apple newbie John Browett brings Dixons to Apple Retail Stores – August 17, 2012
Dear Tim Cook: Apple’s retail focus should be on delighting customers, not generating cash – August 16, 2012
Apple Retail Store chief Browett: ‘We messed up’ with Dixons-eque staffing gamble; refutes layoffs – August 16, 2012
Apple retail chief Browett to get $56 million golden hello – May 27, 2012
Apple grants 100,000 shares to new retail head John Browett – April 25, 2012
Tim Cook emails UK customer: John Browett’s role isn’t to bring Dixons to Apple Retail – February 1, 2012
Eyebrows raised over Apple’s hiring of Dixons CEO to run Apple Retail Stores – January 31, 2012
Apple hires Dixons CEO John Browett as new retail chief – January 31, 2012

NPD: Nearly 60% of Apple product owners more likely to purchase another Apple device after positive Genius Bar experience – August 28, 2012
Apple Inc.: The most profitable retailer in America – August 15, 2012
Apple’s retail juggernaut is magical and revolutionary in its own right – May 25, 2011
Apple Retail Stores hit 10th anniversary (with video of Steve Jobs’ tour of 1st store) – May 18, 2011
Apple Store: ‘The best damn retail experience in America!’ – December 2, 2010
Apple’s retail stores generate huge sales – December 27, 2007
Piper Jaffray finds ‘gravitational pull’ at Apple Retail Stores – November 26, 2007
Apple thinks different with cash register-less retail stores that bring in billions – November 23, 2007
Apple makes retail seem ridiculously easy – May 29, 2007
How Apple’s Steve Jobs is revolutionizing Manhattan retail – May 08, 2007
Fortune: Apple Inc. is America’s best retailer – March 08, 2007
How Apple Retail Stores beat Best Buy, Neiman Marcus, and Tiffany – December 19, 2006


    1. MacDailyNews Take: We just checked, Web apps work just fine on our iPhones and iPads, thanks.

      McNamee never said they HTML5 apps don’t work. HTML5 apps are an alternative to iOS apps, so promoting HTML5 apps (as Apple does) diverts programmers away from iOS app development into HTML5 app development, which are less customized for Apple products and less profitable for Apple.  I saw him make the same point in a TV interview a few months back.

      McNamee loves Apple, but he does Apple no favors by praising substandard/failed Apple policies.

  1. I don’t know if it’s significant but Apple removed the $199 option for the iPod touch. Why they did this, I can’t tell. The iPod touch is a gateway drug to the iPhone. By keeping the introductory price at $199 for the 16GB model, they would have hordes more people buy at the low end, creating future customers of the iPhone.

    By moving it to the $299 price point and later introducing the 7.85″ iPad mini at presumably the same price point, Apple is effectively telling iPod touch buyers to take a hike.

    1. Did I miss something here? I just looked at the Apple Store online and there is a $199 iPod Touch. Albeit it is the 4th generation but there is an entry level iPod Touch like the lower-priced, entry-level, previous generation iPhone 4S.

      1. I’m talking about the new generation iPod touch as I am comparing that with the new, yet unreleased iPad mini. Prices look very similar, in fact, identical. I’m thinking that they won’t price the iPad mini more than $299 to maintain a $100 gap between it and the iPad 2. So the iPod touch will likely be priced at the same price point as the iPad mini. Plus you have to buy the previous generation product for $100 cheaper which to me is Apple cheapening itself.

        1. Yeah, they are cheapening themselves in the same way that they offer the iPhone 4S for $99 and iPhone 4 for free on contract.

          They are meeting their necessary price points. Just as older iPhones still work, older iPods work.

          1. Newer products were introduced at the same price points as existed for the previous generation. The price of the previous generation products dropped as a consequence. It is not the same as introducing a higher priced new generation product and forcing you to buy the previous generation at existing price points with no discounts whatsoever.

            That’s a cheap shot at the consumer.

            1. You are 100% correct on this BLN.

              The only remotely plausible explanation is that the 5th-gen iPod touches *start* at 32 GB, whereas the 4th gen used to start at 8 GB for $199.

              The 8GB 4th gen is no longer available, so the 16 GB 4th gen got bumped down in price as the entry-level. But this is poor justification and I agree with you that the 4th gen price should’ve been dropped further to make the entry-level 5th gen $199.

            2. I was going to buy 4-5 iPod touches (new generation) as a stocking filler for Christmas. But seeing that I’d have to either pay $100 more for a new generation or stick with the older generation, I’m torn as to what to do. I don’t think people will appreciate being given previous generation iPod touches if I went cheap.

            3. Wait, you have people in your life that would complain about being given an iPod Touch… of any kind?
              Who the hell are those people and why would you associate with them?

            4. Heh, now I have to quibble about even $199 products being called “stocking filler.” In my family that would exceed the $100 spending limit we impose on ourselves for each Christmas present. Stocking stuffers for us are chocolates and holiday lottery packs.

              The few exceptions include pooling money with siblings to buy the parents an iMac.

              Don’t mean to be judgmental, it’s just shockingly different from our family’s way of thinking.

            5. Apple didn’t need to drop it into the new nano’s price range (operative words: NEW nano, OLD iPod touch). Apple chose to raise the new nano into the old iPod touch’s price range.

              Which is their perogative, and sales of each will show whether that’s the right choice.

              But don’t go “That makes no sense whatsoever” when you don’t seem to remember that previous-generation entry-level nanos and touches were a mere $50 apart anyway ($130 vs $180 per BestBuy’s website), but the difference between current-generation nanos and touches are three times that ($150 vs $300).

              Yes there’s a big difference in flash memory, but that doesn’t change the fact the barrier to entry for the latest-generation touch is now 50% higher than before.

        2. You’re comparing the new iPod touch with an unannounced, and certainly no price point, iPad mini? Um, exactly how is that done?

          Also, you’re leaving out the iPod nano, which was revised to have a larger touch screen and settles in at the lower price point. I also disagree that the iPod touch is a “gateway drug” to the iPhone. I think the iPod touch is its own beast and has its own market that doesn’t necessarily move people to the iPhone later.

        1. They never removed the 199 option from the 5th Gen. It never had a 199 option. They pushed the specs up on the 5th gen which costs more. If that’s too high for your tastes buy the cheaper 4th gen which has more memory at 199.

          Would it be great if they could produce Retima MBPs at $250 at the same quality? Sure! But they can’t.

          The 5th gen iPod costs more to make than the 4th so you pay more if you want that extra quality.


          1. I was going to buy them as stocking fillers for Christmas. I don’t think people will be too happy receiving the 4th generation when the 5th generation looks far nicer. They could have maintained the price at $199 since they’re using the same processor as the iPad 2 and parts from the iPhone 5, as neither the iPad 2 or iPhone 5 has gone up in price.

            1. I know they won’t object when receiving the gift because they’ll be happy receiving it. But if they go to the online Apple store or the real Apple store and see that there’s a newer generation on offer, they’ll secretly wish they were given the new ones. And I really think the new ones look so much nicer (prettier) than the older ones. I love shiny objects. I think many people do.

            2. You need to find new friends. I’ll be glad to be your pseudo friend if it means a 4 Touch coming this way. I assure you I won’t look at it with regret. 😉

    2. Apple gear typically starts at a higher price and works down over time.
      But who cares?
      McNamee’s reasoning (and grammar) is appalling and barely merits a response:-
      “And I’m sitting there saying, excuse me….”

  2. As a developer, HTML5 can suit many needs in the mobile space and has some real advantages in development. But, there are many instances where a native app for any platform is going to outperform HTML5 due to structural limitations in HTML5. Data storage is one area where performance can take a hit.

  3. Roger McNamee, Elevation Partners… hmm… That sounds so very familiar, where have I heard that before…? Oh yeah, them and U2/ Bono made such a big deal about their faith in Blackberry, and the huge investment into RIM.

    Sour Grapes much Roger? Hows that RIM thing workin’ out for ya?

      1. Ooops, was it the Pre and Palm? If so, my bad, sorry.

        OTOH, if it was Pre and Palm, WOW! They went down the bowl way faster than RIM is going…..

        Thats about 10x the Sour Grapes. Hows that Palm workin’ out for ya Roger?

  4. Roger believes that he can change the world with what he says. He also said all iPhone users would switch to Palm. He doesn’t care about speaking accurately, only about changing public perception, so he lies with a hint of truth underneath.

  5. Remember the movie Red October? The Russians fire torpedo’s at the American sub, captained by Shaun Connery. Instead of trying to outrun the torpedo’s Connery orders the crew to head straight for the torpedo’s at full speed. The crew is like……WTF? I won’t spoil it by telling you what happened, but Apple is like that. They do something and the the crew often does a “WTF” kind of reaction. Then a year or two down the road all you disbelievers will be saying, “oh yes, I knew it was the right strategy all”. Even the sacking of some Apple Store employees (which at first seems like a fairly stupid move on Apples part and still does by the way) might have made the store better in the long run. We just don’t know what their true thinking was. Were they really that stupid or were they trying to pull off a Shaun Connery? We’ll never know.

  6. well, MDN, yes. iCloud is chopped liver to us.

    …and despite your delight in contradicting anyone with criticisms against Apple, McNamee is not alone in his disappointment as Apple — the most wealthy company in the history of the world — seems to have slowed innovation in many areas.

    – Retail store cost-cutting was a dumb move
    – killing the server and then dragging feet on Mac Pro updates tells corporate and pro users that they don’t matter
    – dumbing-down the Mac OS with crap like FB and Twit integration is the exact opposite of the direction that desktop users want. There are already apps for that, stop bloating the OS!
    – iWork apps not updated since 2009 ?!?!?!? hell, even dinosaur MSFT has updated its bloatware more frequently than that!
    – and so on.

    This doesn’t mean that Apple isn’t doing a fine job with iPhone and iPad updates, and the Macbook with Retina display really moved the ball. But still, there’s plenty of things that Mr. Money, Tim Cook, can & should be doing that just aren’t happening. If you care about Apple, then you have to speak up and say when they are screwing up.

    1. 1. Agree with the retail store cost-cutting, but I think that was the guy hired from England who only knows discount retailing and bottom-line management. Tim Cook seems to have corrected him (hopefully severely).

      2. Server and Mac Pro lines are actually the dinosaurs. The reality is very few of Apple’s customers buy servers or Mac Pros, therefore Apple isn’t going to spend much time and money on them. However, how hard is it to update chips?

      3. I don’t understand the attraction of FB and Twitter, but apparently a lot of people do. Plus, it integrates well with iOS for those uses, which make Mac OS more appealing to consumers, especially switchers.

      4. iWork on Mac OS hasn’t been updated, but iWork was developed for iOS. Agree that a major update is overdue, but how much can Apple really add/improve to the iWork suite? Bloat it like MS has done with Office?

      5. iCloud is just a start. I expect Apple to steadily improve it as it gets its current offerings stabilized and working well.

      6. Most of your complaints involve issues which pre-date Tim Cook becoming CEO, even on an interim basis (e.g., Mac Pro). It’s not like Apple only makes a product plan a month at a time. With the unexpected monster successes of the iOS platform, Apple has had to divert resources from Mac development to iDevice development. That means picking and choosing what gets R&D money, and MacBook Pros and iMacs make a lot more money and sell a lot more units than Mac Pros and servers. That was true under Steve Jobs, is true under Tim Cook, and will continue to be true in the future.

  7. Wait, lets weigh the two,
    1) a ‘dumb monopolist’ whos products delight millions, and actually have features that people use, and that work,


    2) a failed (failing) Venture Capital Investor. (who picked the wrong company to back)

  8. Ugh, I know a few Apple Store employees and none of them have been directed to do anything different other than the same which is focus on customer service. Give the customer what they need. None of this profit only non-sense. iCloud is the cloud so how is Apple blocking this? There adding new features to it even. I don’t see Tim Cook or John changing anything from what I know. When I go into a store it’s business as usual doing the same things they always do. Nothing different. Just the same thing different they have always been and customer focused as always.

    1. I worked at Apple 7 years ago. The average IQ of the store employees in the area stores appears to have significantly dropped from well above average 7 years ago down to a luke warm double digit today. Now, you must make an appointment to speak to a “Genius” just for help on how to format a new drive. All of today’s reps sound like a terrible TV commercial, and not one can tell you how to easily restore your iPhoto library. The managers are even worse, often coming from a failed career as a department manager at JCPenny and has no idea how to add MIDI to a Mac or iPad, if they know what it is.

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