Posted on 08/27/2011 1:05:29 PM PDT by TomServo
Earlier this month I sold my 11.6-inch MacBook Air (using Samsung Series 5 Chromebook now) and iPhone 4 (switched back to Google Nexus S). I don't miss either Apple product. Not the least bit. In reflecting, I realize that the spell is broken. Without Apple Chairman Steve Jobs driving innovation or inspiring passion -- the oft-called "reality distortion field" -- my Apple enthusiasm is gone. Perhaps it's return to sanity.
I should have connected the dots sooner, but often people don't easily apply even basic math to emotional matters, because the nuances move swiftly on the surface with many slower currents and fast-churning eddies below. The ocean is an excellent analogy. Yesterday, in viewing Nate Mook's slideshow of 20 products introduced by Jobs, and resurfacing emotions about the different launches, I had an epiphany. I could see how much Jobs' passion infected mine -- his ability to inspire about what Apple products offered. I used to joke about the Steve Jobs spell: During one of the product launch speeches, if he was having an off day, people left feeling like: If I buy this thing my life will be better for it. If Jobs was in the zone giving the preso, people left feeling if they didn't buy the new thing their lives would be worse.
Jobs' cast a big spell, but it was more than the pitch -- there are aspirational qualities built into Apple products. Jobs is the rarest of business leaders: He has good taste and the ability to inspire people working with him to put it into high-tech stuff. Related: Design priorities put features that are most useful at the top, packaged such that there is balance among them -- none takes away from overall functionality. Additionally: Simplicity is a defining Apple design characteristic, or was.
As I explained here at BetaNews in February 2005 post "iPod Shuffle: Apple understated": "The company has turned a knack for the understated into a marketing machine that touches virtually every Mac product, including iPod Shuffle...Understated often means uncomplicated. And sometimes that means cutting back consumer choices, as Apple did with iPod Shuffle. Less really can be more...Competitors really need to study what Apple is doing right and how to incorporate a similar approach into their product designs and marketing".
Complication Creep
But on reflection, I now see how much simplicity, one of Apple products' best attributes, is giving way to complication creep. Mac OS X 10.7 Lion and iTunes 9 and 10 are glaring examples of increased complexity, as are iOS 4 (and soon v5), Safari 5.1, iLife `11 and most other Apple software.
Even Apple Store. I wrote in 2005: "Apple retail stores are remarkably understated. The only bright colors are found on marketing material placed throughout the store. Otherwise, the tasteful stores are quite stark, so that the shoppers' eyes are drawn either to the colorful marketing posters and signs or to the products on sale". The stores are no longer as tasteful, and the new iPad product information displays create clutter and complexity.
Still, where Steve Jobs' influence still touched so did simplicity remain, which iPad 2, MacBook Air and Mac App Store imbue. But other recent attempts at simplicity have failed, with Final Cut Pro X example of increased complexity coming from an attempt to make video production simpler. Many of Apple's elite customers complained about the product, and there was even a petition to bring back the old version! Could such a thing really have happened with Steve Jobs hands-on at Apple?
When Passion Fades
Steve Jobs unexpectedly resigned as Apple CEO two days ago, and the Board of Directors immediately chose Tim Cook, then chief operating officer, as replacement. Much of the punditry about the transition is similar: Apple will remain the same Apple under Cook. This is misguided, wishful thinking.
Apple will change under Cook's leadership. Actually Apple already has changed. For about three years now, Jobs' influence on product development and marketing is less than it once was. The Apple faithful will slam me in comments or elsewhere for speaking such blasphemy. But, c`mon. The man is terribly ill -- clearly fighting for his life throughout much of 2009 and 2011.
As I more seriously review the 2.8 years since Jobs' January 2009 medical leave started, it's clear the aforementioned qualities are missing and other less-desirable ones present in Apple products. This reflects the limits of Jobs' involvement in the process -- at least the way he was able to be when in more robust health. There is a vitality gone from Apple's cofounder that many recent Apple products reflect, even as the company reaches its highest pinnacle of success ever. It's a cruel circumstance that a man who has had so much positive influence should be ravaged from the effects of cancer while still in his prime.
Kirk and Spock
Jobs and Cook couldn't be more different leaders. They're complimentary: The inspired visionary looking to bring good taste and understated design to otherwise complex products and the man responsible for getting them to market. Like James T. Kirk and Mr. Spock from "Star Trek". Kirk is the leader, the charismatic one. Spock is the empowering sidekick but not as effective leader. That's how I see Jobs and Cook.
Cook will competently lead Apple, as he has done for the better part of two years. He's honed Apple's supply chain to a science. Apple is a self-propelling machine now. But like Spock, Cook won't have the passion of Kirk. This will affect his ability to hold onto the team core to Jobs, such as product design genius Jony Ive.
Apple won't find feature compromises -- the kind good for keeping them in balance -- as easy in the post-Jobs-CEO world, either. Response to Final Cut Pro X is one example of that. Jobs had a knack for making people believe in his company's products, for clearly calling on real-world passion while making anyone and everyone willing to listen to feel good about Apple stuff. Apple products evoke emotional response, like few others in techdom. They are imbued by Jobs' passion and his ability to inspire others to design greatness or to give someone like Jony Ive freedom to bring true design genius to market.
Apple feels quite different to me now in 2011 than it did in 2008. It's all corporate now. Just dollars and cents on a ledger. What Jobs imbued already is gone, at least for me. I predict it will fade for many technophiles. But not anytime soon for the mass market of buyers, who are more influenced by what their friends and family use than by the aura of Steve Jobs.
His legendary "one more thing" was one last thing long ago.
Actually, I don't think the iPhone 4 and iPad have Gorilla Glass. Here's one independent source stating as much, and I don't think Apple has ever directly claimed they use Gorilla Glass.
Additionally, the Apple glass can be scratched in normal use.
I think this is an urban myth that the iPhone and iPad use Gorilla Glass.
“Stevie’s not looking too well”
Nope, he’s sure not. Having seen terminal cancer up close myself, I’d have to say he’s not long for this world. I wish him the best, and miracles do sometimes happen...
Sad to see such a successful person in that kind of shape so young. He’s worked hard, and from what I’ve heard he’s tried to live a fairly clean life. Sometimes, life just isn’t fair.
Already proven to be a Photoshopped image by TMZ.
Could not recall the name of the company and was too lazy to look it all up. Thanks for the clarification.
Of course, someone on this board does not think this is a problem at all. Seems to be something about not understanding the metaphor or that anything taken too excess is not a good thing.
I’m all for free enterprise and all that good stuff but poking myself in the eye with a sharp stick and then figuring out later that it does damage is just stupid.
I understand change is what makes things go and that competition is useful. I guess I’m just too much of a flag waver to be willing to see our jobs go away without some other path to follow.
Sat Aug 27 17:47:01 2011 · 33 of 43
FromTheSidelines to Sequoyah101
And now there are thousands of consumers and new businesses that benefit from the lower cost commodity product they can use to build their business. The Dells and HPs and Sonys of the world now compete to add more functionality and capability for a given price, allowing new business to grow and thrive.
A stagnant economy is a dead economy. Turmoil breeds growth.
You are missing the point. Asustek was NOT a computer manufacturer when they began sub-contracting for Dell. They moved up the value chain by taking larger and larger sub-contracts with Dell and then they came out in Asia and one fine day... they were in Best Buy.
This in an absolutely true story. Google it with the source “Forbes” and it reviews the book that was written about it. They interviewed the founder of Asustek. He literally said that Dell taught him every single detail on how to make a PC
I knew it was Gorilla Glass but thought it was only shatter resistant not nearly scratch proof.
I got a cover but it is for a G4 and I have a G3, not as big a phone apparently though it is an iPhone4 and I thought that was the same... They were 90 cents each so I guess I’ll figure out how to give them to someone who can use them.
No, you’re missing the point - people learn from their customers AND suppliers AND employers AND competitors all the time. Asus came out from Acer, when 4 of the senior engineers at Acer left and created Asus. And they learned from Acer what they needed to get business from Dell.
Then they learned from Dell and others about how to sell finished computers. And have done so since 2003 when they introduced their own branded product on the market.
Is this a bad thing? No - Dell is still in existence, we have another brand to choose from (more competition), and the market survives. What’s the down side?
“A prosumer mini-tower desktop, for instance. ;-)”
Ha! I bid farewell to that dream years ago and now you remind me?
Without Jobs there to put his powerful foot down, who knows what sacred cows will be smashed...
In other news, I’m writing my first iOS app right now. Objective C isn’t the greatest language, but he standard libraries and the way to work data with the UI is awesome.
This is as old as the tech industry. Gordon Moore and Robert Noyce left Fairchild Semiconductor to found Intel. Fairchild Semiconductor itself was founded by the “Traitorous Eight” who left Shockley Semiconductor.
Steve does not have AIDS he had a liver transplant about 3 years ago and those photos if searched for come up as faked photos.....
Good exchange so far. I appreciate it!
Here is the down side (STRICTLY from the perspective of Dell).
Once you start outsourcing your core work, you will be killed by margins. This is the HIDDEN rule of business.
As I mentioned in my previous post, I used to assemble PCs early in my career because it was cheaper for my company to assemble PCs than buy them.
That is exactly how Michael Dell got started. He, like me, went to UT-Austin. He, like me, started assembling PCs. He, UNLIKE me started a company.
One of the lessons he immediately took to heart was margins. If all he did was assembly, then he would never be cheaper than his competitors. It would come down to who could pay his assemblers less.
The original Dell tried to make as much in-house as they could. Obviously you had to buy Intel Chips and pay Microsoft for a Windows license, but Dell tried to make everything else inhouse. They combined those cost savings with a fluid on-demand manufacturing process and lack of retail outlet overhead to create the MOST profitable computer hardware company in America
At some point, some Harvard type MBA gets hired into the mix. He looks at Dell’s research budget and says “Why do we need this”. He looks at Dell’s current motherboards costing $20 and says “Cant we just keep using these forever?”
Someone says “No, we need new motherboards for the Pentium chips coming out. We will need to spend some money designing those”
Harvard MBA says “Well..I got these Asus guys that say they will design a new motherboard for us and sell it to us for $22. While that is $2 more than we spend on a motherboard today, we just saved $100 million, which is more than the 2 dollar overhead for all the PCs we sell THIS year”
The key here is short term saving. With this decision, Dell has created short term savings with a long term loss. They violated their own rule about keeping costs lower than their competitors.
By using industry made parts, they gave up any cost advantage. Their other model of on demand manufacturing powered by Internet only orders is easily copied by dozens of manufacturers.
Now Dell has become an also ran. Any part they order is an off the shelf part that their competitors can also order.
If Dell still had the ability to create their own motherboards, they would be saving $2 a PC on that. Add that ability for memory chips or fans or electrical systems or cases and suddenly you realize that Dell is paying $100 per system MORE for its components than Asus or Acer do.
Now, that does not sound like a lot, but multiply it by 30 million PCs and suddenly that is REAL money.
So, now, Dell struggles and struggles and is rapidly in the danger of going the way of IBM and HP and giving up on the PC business.
Meanwhile Asus and Acer both continue to post healthy double digit net margins despite selling cheaper computers.
And.. it is NOT due to labor. Dell has assembly plants all over the world and has access to cheap labor.
The fault lies solely in Dell’s decision to give up ALL internal component manufacturing.
MORAL OF THE STORY: There is always a need for outsourcing. Even if Dell built their own cases, they would still need to buy screws, as screws have no value add and Dell does not consume enough screws to be even in the top 100 consumers of screws. However, when it comes to Motherboards, Dell engineers CAN engineer a world class motherboard that COULD have provided an edge. Notice the new Macbook Air. It kicks ass and takes names because of its motherboard. Yes! Dont get fooled by the slimline etc. THe first MBA was a DOG! But Apple designed the new motherboard with built in flash memory and now MBA can be had with a built in 256 GB SSD and 4 GB Memory all built into the motherboard!!!!
NO OTHER computer manufacturer has that capability. That is why they cannot build a laptop as thin as MBA that has equivalent battery performance.
If Dell had kept the ability and facility to make motherboards they could have followed easily. Dell is the largest PC seller and they certainly could have made the value case to make a state of the art motherboard.
But, they gave it up for the sake of short term profits. Now they pay the price
Yep - companies, especially tech companies, give birth to new companies all the time. See all of Silicon Valley...:)
http://www.tested.com/news/whats-so-special-about-iphone-4s-aluminosilicate-glass/429/
Of course, the new iPhone is promising a similar, indestructible style of screen — one that’s curiously similar to Gorilla glass. Apple promises the screen to be “20 times stiffer and 30 times harder than plastic” and also incredibly scratch resistant as well. This is all due to a panel of aluminosilicate glass, the same sort of material used by Corning to manufacturer their own device screens. In fact, the similarities are so consistent that some have questioned whether Gorilla glass is behind Apple’s new phone. We’ve reached out to the company, but have yet to receive a reply. — something that’s neither been confirmed nor denied by the company.
I agree - thanks!
Once you start outsourcing your core work, you will be killed by margins. This is the HIDDEN rule of business.
I'd say only if you're in a commodity market. I do quite a bit of factory automation work, and while I outsource some of what I do, it doesn't affect my margins at all - each job is so unique and requires on-site design and service that outsourcing the actual controller programming/design isn't an issue. In fact, I leverage commodity controllers...;)
So for some industries it does have an impact, especially industries where the product or service becomes so ubiquitous that it is commodity. For the rest, it doesn't.
I say we're seeing that now with the iPhone and Apple; they're starting to lose marketshare in smartphones, and are starting to compete on price already (witness the emergence of free iPhone 3GS units and bigger discounts on the iPhone 4). The first person in a new market can charge premium costs, but as the market comes around to commodity status - like smartphones - everyone's margins get squeezed.
The fault lies solely in Dell’s decision to give up ALL internal component manufacturing.
But what was the downside for Dell? Their profit margin has been pretty consistent (an occasional hiccup, like in 2001 and 2009) at around 5%. Their revenue has grown pretty consistently, however.
Cutting costs to offer lower prices is a key to bumping market share and total revenue, and if you can keep the margin the same - then you gain, ultimately, more dollars.
Yep, so is it or is it not? Unless it’s confirmed, it’s probably not... At least the glass on the back definitely isn’t - it shatters much too easily.
What world are you living in? The Apple cultists ALWAYS come out in force to praise any and all Mac.
Sure there are some haters but the pro-mac people are the more annoying. I got no dog in this hunt, just stating facts.
Great, great post!
Great reply!
So, your post in many ways goes to my point about margins.
You talk about commoditization. You are absolutely correct that every product gets commoditized. PCs were commoditized back in 1983 when COMPAQ started building clones.
So, in a commodity business, what can then help you? Certainly the answer is NOT buying every SINGLE part of your product from a bulk commodity manufacturer.
If Dell buys every single item (Case, Electrical, Fan, Motherboard, RAM, HDD, Processor, OS, Optical Drive) from others then in the end, is Dell even Dell?
What hope will Dell then have left? Look at HP. That great business is dying because that is exactly what they did and now they are spinning off their entire PC business.
As I mentioned earlier, when you buy parts from someone, that other person is making margin. He has to, otherwise why would he be in business. So, if you paid an extra $5 for each major component, soon you have paid an extra $100 for all of them.
In an era where a PC sells for $500, $100 is life and death.
Now, one can meaningfully say, “hey.. one cannot build everything inhouse”.. and you would be correct.
As I mentioned in my previous post, certainly I would not expect Dell to make screws, because even if they use 100 million screws a year, there are manufacturers out there that make 1 BILLION screws a year and they have economies of scale that Dell can NEVER match. That certainly qualifies as not being Dell’s core business
But when it comes to Motherboards, Dell uses MORE motherboards than ANY other PC manufacturer on the planet. They are number one.
So, if you are the worlds number one user of a sub-component (which happens to be a value added component too!) why would you not build it in-house.
If Dell started making MBs in-house they would be the world’d LARGEST MB maker and they would have economies of scale that no one could touch.
Secondly, they could then start building exclusive features to their MB (like on board flash memory) that do NOT have to be shared with other competitors.
Part of the problem with buying from an out-sourcer is that you are NEVER ahead of the competition. Whatever you have, they have.
The guys who are putting in the research money and developing in-house knowledge are the guys who will win in the end.
This concept of running a virtual company like HP and Dell tried is a failure. And we all know it. Some stupid Harvard MBA decided that you could outsource every single thing and one CEO and one CFO could run Dell worldwide with no real employees.
Well that is baloney. Because if you talk about virtual companies that make NO product themselves, then keep in mind, it is very easy to get competition.
If I find an assembler in Thailand who makes me an ENTIRE PC box and ships it to me in the US for $400 and my business model is to ship it to the end consumer for $500 (which is literally the EXACT model Dell has today), please keep in mind, that there is always a competitor around, that will ALSO go to the Thai assembler, and order the SAME PC for $400 but sell it for $420 in Best Buy.
Since that competitor does not have a huge overhead or is not publically listed company in NASDAQ he is more than happy with low margins.
Mark my words, Dell will get out of the PC business in less than 3 years. They have no other choice.
TMZ is not going to post a fake Steve Jobs photo. Due to lawsuits it had that photos of two days ago vetted and checked out. I give low odds to it being fake.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.