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You are here: MacNN Forums > News > Mac News > Editorial: Is the Apple Car a midlife crisis?

Editorial: Is the Apple Car a midlife crisis?
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NewsPoster
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Feb 16, 2015, 02:44 PM
 
If you're expecting a story about Apple taking on Tesla with new cars, sorry about that, no -- we discussed that over the weekend a bit. If you're expecting more news about how Apple's gigantic Scrooge McDuck-level stash of cash is breaking yet more financial records, well, it probably is. What we want to propose, though, is different. We want to argue that Apple having all this money is, in fact, an inspirational thing.

No, really. Microsoft has a lot of money, and we're not fussed about that. IBM has a lot, and that's nice for them. It's different with Apple, though, because of how they did it, and where they started from. None of us can really imagine what $18 billion in profit looks like, but all of us can be lifted by Apple's success because it speaks to creativity and sheer nerve.

For Apple so nearly died. In 2010, after he had returned to Apple and was just beginning to see it become the huge success it is now, Steve Jobs revealed how bad things had become. When he returned to the company, he said, it was 90 days away from bankruptcy.

We all face pressures but imagine that. Just 90 days -- with thousands of staff relying on the company and with warehouses full of expensive computers that weren't selling.

You can imagine that Jobs didn't know the extent of the problems when he first came back. You can even wonder if 90 days simply wasn't long enough to sell the company. Whatever he knew and whatever the constraints on him were, Jobs ignored advice to sell Apple. Most famously, he ignored Dell Computers' founder Michael Dell -- who was as convinced as anyone that the firm was dead.

Ignoring advice goes against everything we are always taught. In our calmer, more relaxed times, maybe we wonder about that, maybe we think that we could do something new, something that nobody else has. Maybe we conclude that there isn't anyone who can give us advice. We might even conclude that it's risky to listen to other people.

You know this, but even under our everyday pressures, we forget it. Under the enormity of losing Apple in the next couple of months, Jobs did not forget all this. He did what he thought was right, instead.

Now, he's not here to say why he did any of the things he did, but we can see what he accomplished, and specifically what his return to Apple then brought out of the whole company. For instance, in the year Jobs returned, 1997, Apple had launched eight desktop Macs, two servers, three PowerBooks and one educational machine, the eMate 300. This is what was in Apple's warehouses, this was what was worth millions, and this is what was not selling.

Jobs treated all of that as sunk cost. The money is spent, it is gone, it is not coming back. Rather than try to find ways to turn that inventory into new capital, he started again with new computers. That's not like starting a new draft of your novel: computers are hard to make, and that means they are expensive.

Jobs replaced the lot with a plan for just four computers: one professional desktop Mac, one pro laptop, and then the equivalent two for consumers. Where 1997 had 14 new product releases, 1998 had four. That number would go up again -- in 1999, it was nine, including the Cinema Display and AirPort -- but Apple was not expected to even see in 1999.

The computer industry also didn't expect to see the iMac. You can argue over its aesthetics -- as many people found it bulbous and garish as found it sleek and gorgeous -- but it wasn't a grey box. It had a handle: this was yours to touch. It was also clearly designed, in every sense, with all of it translucent and all of it looking cared for. This was yours, and it was Apple's.

It was also brightly colored. Microsoft's Bill Gates mocked it at the time, saying that the one thing was Apple's providing at the time was "leadership in colors." It's hard to believe that Gates really thought that, but if it were just a PR front, he didn't then do anything about it. He didn't, or maybe couldn't get, PC vendors to make friendlier, better computers. Some did add in colored plastic panels in a half-hearted attempt.

Perhaps the iMac was do-or-die, perhaps it was just made with the idea that if Apple were going to die, let it die with some style. Yet that ignoring of common advice, and perhaps common sense, continued with the iPod. Then the iPhone. Then the iPad.

Today, the real difference in the advice Apple gets is that instead of being told to sell itself off, it's now being told to buy things. Tesla. Football teams. Anything. It was criticized for how brilliantly Samsung did better at it in the mobile phone market -- and Apple just kept right on doing what it wanted, while Samsung stepped off a cliff.

It is stunningly hard to ignore other people's opinions, and it is also arrogant. Yet Apple ignores everyone, and it also refuses to talk about what it's doing. So all the advice it gets is based on guesswork about what the company is doing, and a reading of what its rivals are up to. The former can't be complete, and the latter is usually short-sighted.

Apple keeps repeating that it is focused on making the best products, and that it is not interested in the money per se. This is a Hallmark Card-like sentiment, but -- and this is the bit that Wall Street just flatly refuses to believe -- it also appears to be true. That dedication to doing the best they can, and doing what the think is right despite everyone else's opinion, is inspirational.

Nothing lasts. Yet what's also heartwarming is that of all the companies that were Apple's rivals back in the first days of the Mac, only one is still in business, and still making computers. I wonder how Michael Dell feels about that now.

-- William Gallagher (@WGallagher)
( Last edited by NewsPoster; Feb 23, 2015 at 04:44 AM. )
     
climacs
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Feb 16, 2015, 02:54 PM
 
great article. "in the year Jobs returned, 1997, Apple had launched eight desktop Macs, two servers, three PowerBooks and one educational machine, the eMate 300." Does this remind anybody of Samsung's strategy? Throw a bunch of shit at the wall and see what sticks? I don't know about you but I don't think it's a great longterm strategy. People catch on eventually. That's why when Apple finally came out with a large-screen iPhone, a lot of people who weren't emotionally attached to the Android platform flocked to iPhone 6, and are still doing so.
     
climacs
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Feb 16, 2015, 03:00 PM
 
it's also inspirational that Apple has succeeded in becoming the most successful company in the world by defying MBA logic and Wall Street logic. Look how many billions Microsoft and HP pissed away on various acquisitions. Those failed acquisitions have hardly brought MSFT to its knees, but they still represent a huge opportunity cost. For instance, what if Mr. Softy had done something intelligent with the Danger acquisition, rather than chase off all the talent with their internal politics? Maybe the smartphone wars would be a three-way race. Maybe MSFT wouldn't have had to make the Nokia alliance and purchase from a position of weakness in the smartphone marketplace. Any other company would have been sorely tempted to squander a good chunk of that enormous Apple fortune on acquisitions that would have been widely praised on Wall Street and in the business media. Chances are any such acquisitions would have been failures or at the very least not worth what was paid. Huge acquisitions also distract a company from its customers and its goals as it attempts to absorb the other company.
     
iphonerulez
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Feb 16, 2015, 03:36 PM
 
One would think most companies have direction and long-term plans. It's somewhat odd that it worked out so well for Apple and not for so many other companies. The iPhone seemed so well-timed just as the home desktop was falling out of favor. Desktops have at least twice as long upgrade cycle as smartphones and Apple as a consumer tech company was able to capitalize on that fact. In most cases, consumers use smartphones more than they could ever use a desktop computer because the smartphone is always within reach. Microsoft's mobile initiative seems to be running well behind schedule and being a far trailing third platform leaves it in a rather precarious position of never gaining traction.

I'm so lucky I always owned Apple products and although I own a good amount of Apple stock, I wish I had used that money I spent on Apple products in buying up their stock in the late 80's and 90's. I really didn't know much about stocks and then I certainly never imagined that Apple's stock would rise to the levels it has over the past five years. Although I definitely miss Steve Jobs, I think Tim Cook is doing a fine job and it's a shame Wall Street is never satisfied despite Apple being such a wealthy company. Greed is a terrible thing to be trapped in.
     
DiabloConQueso
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Feb 16, 2015, 10:18 PM
 
Apple wasn't kidding around when they dropped the "Computer" from "Apple Computer" back in late 2006/early 2007.
     
climacs
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Feb 17, 2015, 12:13 PM
 
there's not going to be an Apple Car, you can take that to the bank. It is far more likely Apple is working on what goes into the car that you buy from conventional automakers. For instance, perhaps the self-driving car you buy from Lexus has an Apple guidance system in it. Or perhaps due to the difficulty of developing a self-driving car that can handle city driving, as an intermediate step you have car that can self-drive on the open road interstate, then when conditions change it pulls over and you have to drive it yourself.
     
   
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