Understanding Apple Parts 1 and 2
Written by Tim Bajarin Sunday, 10 August 2008 23:15 Last Updated on Thursday, 06 August 2009 17:11
Following Apple for some 28 years now, I've seen the Mac maker grow from a very small company (launched with a computer thought of as a hobbyist toy) to one of the most powerful technology companies on the planet.
I've seen it go through five CEOs, starting with Steve Jobs and coming full circle when Jobs came back to take that role again in 1997. I've met with each of these CEOs to hear their thoughts, visions, and goals—and in some cases spent time with their teams as they explained how they see the market. And over time, I've learned what makes Apple tick.
As you can imagine, Apple's vision has changed over the years with each chief officer. But since The Return of Steve Jobs, Apple has maintained steady goals for its role in the digital world, goals that are surprisingly consistent and even predictable—if you know what drives them. In the next two columns I'd like to share the fundamentals you need in order to understand how Apple thinks about, and approaches, the digital realm. This week I'll analyze how Apple sees the world; next week I'll puzzle out what types of products Cupertino might bring to market over the next three years in light of its overall vision.
On the second day that Steve Jobs was back in charge at Apple, I asked him how he planned to turn the company around, given that Apple was $1 billion in the red at the time. Jobs explained that Apple needed to readdress the needs of its core customer—and, as an aside, he also mentioned that he was going to pay more attention to industrial design. Within two years of being back at Apple, Jobs introduced the all-in-one candy-colored iMac and made industrial design a core component of Apple's product philosophy.
The most important part of his vision came in his January 2001 MacWorld speech, when he told the world that he wanted the Mac to become the center of people's digital life. People thought this was just a catchy marketing phrase, but the idea drives the company today and into the future.
Jobs & Co. has a unique position in the market, controlling an entire ecosystem of hardware, software, and services. Computer hardware is critical to the vision, but because Apple's services can now be accessed on PCs (not just Macs), as well as on any other device that uses a Web browser, "digital life" extends well beyond the Mac itself. So we now have two clear hints about what drives Apple: innovative industrial design and the Mac's ease-of-use experience at the center of your digital life.
But how does this digital-life thing really play out when it comes to Apple's products? Well, imagine that a Mac is literally at the center of your home, and designed to connect to your TV, smartphone, MP3 player, digital camera, digital camcorder, and any other devices. When Jobs laid out this vision, he wasn't spewing marketing speak, he was laying the groundwork for products he would actually produce that would be part of the Apple ecosystem. In fact, his product releases have been tactical and methodical. First came key applications such as iPhoto and iMovie. By late 2001, Apple software was helping manage people's digital lives, tools for organizing their photos, creating digital movies, and buying and managing music. As a plus, Apple even created a music player to make sure the user had the best portable music experience as well.
Then in 2007, Apple shook up the phone market with the introduction of the iPhone. Again, this followed Apple's script closely. After all, the revolutionary iPhone was just another device that enhances the Mac experience within Apple's digital ecosystem. If the Mac is at the center, then the iPhone (as well as the iPod) is just another elegant satellite designed to interact seamlessly with all things Mac—and draw people into Apple's world.
Ultimately what the company wants is to deliver the Mac's ease of use to a much broader customer base, and to do that Apple created a set of services that extend across computing platforms. At the heart of the strategy sits iTunes, a service that has become indispensable because it delivers the digital content to the iPhone and iPod. With iTunes so deeply entrenched, Apple can create new satellite products that can plug into the service as well. But just as important is MobileMe, a "cloud" service that backs up and shares content within the platform. Apple would like to become the primary source of apps by which individuals or families access their digital content—on a Mac, on a PC, or from the cloud.
Apple has been, historically, a hardware company, but the company's real smarts are invested in its software and services. With the goal of making the Mac the heart of their overall strategy, the company creates and designs products and services to extend the experience to new users and new devices. Next week, I'll consider how these guiding principles influence what the company will bring to market, tomorrow and next year.
For part 2 go to http://www.pcmag.com/article2/0,2817,2347165,00.asp
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