I’m currently reading Jerry Kaplan’s excellent book “Startup: a Silicon Valley adventure”. In this book, Kaplan, founder and CEO of GO Corp., details the founding, financing and eventual demise of his highly innovative company, including the development and workings of their product. What’s so surprising about this book is just how timeless it really is – the names and products may have changed, but the business practices and company attitudes surely haven’t.
When I hit chapter 7, detailing which hardware partner GO was going to work with, it really hit me just how little this industry has changed over the years. In 1989, GO was given the opportunity to team up with either HP and IBM, and when detailing the latter, Kaplan wrote:
As with many of the world’s religions, it takes a bit of extra faith to fully accept that the IBM corporate culture is completely benign. It instills in its employees a sense that they are tough, fair, and among the chosen. Yet individuals are occasionally expected to do questionable things for the greater good, like a CIA operative ordered to defend democracy by assassinating a head of state. IBM has a tendency to create internal myths that protect its sense of order. If it is outwitted by some fast-moving upstart competitor, it is probably because someone didn’t play fair. If it doesn’t have the best products, it may merely be trying to protect its customers from unproven technology.
Replace “IBM” with the current biggest technology company, and this piece of wisdom would still apply word-for-word. Uncanny.
Kaplan’s book is definitely required reading material. It’s well-written, filled with anecdotes about the biggest names in the industry, and, on top of that, it’s just plain funny.
Did you know, for instance, that Apple didn’t come up with the idea for the Newton at all? After Kaplan had his epiphany of a small, portable pen computer, one of the people he contacted as a potential partner was Steve Sakoman, an Apple employee. Sakoman was interested in the idea, but instead of moving to GO and joining Kaplan, he took Kaplan’s idea… And started the Newton project at Apple instead.
“I met with Sculley, and he asked me what it would take to stay and do the project [i.e., Kaplan’s pen computer] at Apple,” Sakoman told Kaplan and his partner, Mitchell Kapor, “I gave him a straight answer – complete freedom, protected resources, a separate staff and site. He agreed to my terms. I have to give him a final answer this week.”
We all know the answer. Sakoman took Kaplan’s idea, and in the same timeframe GO developed its pen computer and operating system, Apple developed the very similar Newton. Interestingly enough, you rarely hear this part of the Newton’s history – but as we all know, history is written by the winners. This “stealing” – as Apple calls it – is simply a core aspect of Apple’s DNA. However, thanks to its incredibly loyal and unwavering fanbase, the very fabric of space-time is generally altered until it looks like Apple came up with everything all by itself.
While Kaplan’s book may be from 1995, and while it may detail the late ’80s and early ’90s, it’s a very revealing book and every bit as relevant to the technology industry today.
This is a strange and not very satisfying article .
It seems to fall into a endlessly repetitive body of work which seeks to show, often in forensic detail, that Apple is not innovative, and that many of things that people might think are Apple innovations are not really Apple innovations at all but stolen/borrowed/copied from other people. So what? What is proved by that? That Apple is just like other companies when they are clearly not? That there is nothing unusual about Apple when there clearly is?
Surely the most interesting question about Apple is what does it do that is different or better than the other companies and which might explain it’s phenomenal longevity and recent stratospheric success? How could Apple go from being a desktop computer maker with a tiny market share to entering three entirely new markets (music players, smart phones and tablets) and utterly disrupting them with massively successful and profitable new products, and along the way take over the music retial business, become the most profitable desktop computer maker and end up the most valuable company on the planet?
To me these seem much more interesting questions and ones whose answers might reveal some interesting things about the modern state of the electronic and computing technology industries.
I taken it as given that any explanation of the success of Apple and it’s products that relies heavily upon the idea that is it all down to some sort of voodoo marketing, or worse that it is all do to do with stupid consumers making the wrong decisions, is a merely a form of intellectual collapse and we can move beyond such idiocies.
So with that caveat Thom, I ask you tell us what do you think makes Apple special and why do think it has been so amazingly successful?
Apple seems to get timing right more often than any other company. Knowing what to borrow/create, how to packaged it in to a useful product, and when to release is the hat-trick that makes Apple impressive.
Execution. That’s the key to Apple success. Not innovation – but execution. Apple takes existing ideas (from other companies or academia) and turns them into products people want. An absolutely amazing skill – but as a geek with a deeply scientific education, it’s just not as impressive to me as the people in the trenches – like Kaplan or the thousands of academic researchers – actually coming up with these ideas.
That is innovation.
Apple do this. They have taken 3 products that had quite a few problems … Smart Phones, Tablets and Music players and made they better to the point where every competitor is compared to it.
Execution is as much part of innovation as is the original idea. It not who has the idea first, it who does it well enough to take off.
You’re right – innovation is not the right word here. I often just equate innovation with invention, and that’s obviously not right. Replace innovation with invention
.
They are often confused. I used to do the same.
It’s probably because “re-invention is the lowest form of innovation” (to re-word an old sarcasm / wit adage)
http://www.osnews.com/permalink?508298
Agreed with you and lucas_maximus.
I disagree. Innovation is obviously the process of make inventions. They are the same concept only differing in whether the describe the invention, or the process of coming up with inventions.
Apple does innovate, but as much in the technical field, as they do in presentation, marketing and business development (I see iPad as a business innovation, the real genius was getting all the content holders to allow iTunes).
Edited 2012-03-24 22:17 UTC
I think that ‘innovations’ like the iPod, and iPhone, and the iPad are more then just a questions of execution. More like a confluence of ‘innovations’ (created or otherwise derived from earlier work) that are combined to create innovative products. These may exist in some for without Apple but that does not mean they would be as defining as what Apple does.
Moreover, execution in hardware is really not that huge a deal. Obviously,
Samsung can execute in the manufacturing arena as well if not better than Apple. They just have not assembled products that people want as much as Apple products.
I also think Apple is getting the ecosystem for their products way better then anyone else. In the tablet space the only true competitor to Apple is not an HP or a Samsung but rather Amazon because they’ve got an ecosystem for their offerings.
http://www.osnews.com/permalink?511642
It part of innovation.
I suppose this is where we differ. I used to be Marxist about a million years ago and my favourite quote of his, the one which is on his grave stone which is in a cemetery only about a kilometre from where I live, is this: “The philosophers have only interpreted the world; the point, however, is to change it”
Accepting for the sake of argument that what you say is true (and leaving aside inconvenient facts like that Apple created much of the grammar that makes up the modern desktop OS) where we differ is that I think that innovation in execution is far more important, far, than innovation in unexecuted ideas. People can sit around in rooms having great ideas that never change anything or see the light of day, but it means nothing unless they get up up, go out and make it happen in the real world. If the idea is 10% then making it happen is the 90%, and it’s that bit that is interesting and world changing.
Here are some thoughts about what makes Apple special and what underpins their success:
Taking total responsibility for the complete end user experience: from the silicon to the retail. Few companies do that and the whole Windows/Android model militates against that approach. But end users love it.
Setting the bar high. Nothing is released until it’s ready, but it doesn’t have to be perfect. No beta releases (Siri being a very rare exception). Version one needs to be as good as it can be and must be solid when it comes to core functionality, and then roll continuos iterative improvements.
Understanding that design is not about wrapping or enclosure but about making objects that connect to and empower people and with which people can form emotional as well as practical relationships.
Keeping it simple. Simple interactions, accessible design and functionally, and crucially a simple product line. The latter is hugely important, it makes the consumer’s job easy when it comes to understanding the relationship of one product to another and it has a vast impact on Apple’s supply chain.
Don’t be afraid. For example not being afraid to cannibalise it’s own product line. Making a phones that would compete agains the iPod, making a tablet that would compete against it’s own laptops, not being afraid is very important.
Being focussed on products and not the bottom line. Think like an engineer, feel like an artist. A company can’t produce beautiful products if the bean counters win every argument. One of the telling things that several commentators have talked about recently is that when it comes to product design there is almost no discussion of component or production costs during the product design phase at Apple.
This two part article is quite good
http://blogs.wsj.com/management/2010/02/22/deconstructing-apple-par…
http://blogs.wsj.com/management/2010/03/08/deconstructing-apple-par…
Coming up with ideas is quite easy – it is a purely mental exercise. In no way am I trying to minimize the importance of them, but an idea in isolation is no more than a mental construct, it has little or no value until you do something constructive with it.
Taking an idea to market involves a whole lot of work beyond the idea itself. Ideas can be judged on their merit to a degree – but there is a process involved with turning one into a product. That process and how well you do it is arguably much more important that the idea itself as far as market success goes.
The irony with Apple, imo, is that they seem to see themselves as an idea company. Even their slogan, “Think Different”, conveys this notion. They put a huge emphasis on intellectual property – they obviously look upon their IP as a key to their success and protect it jealously. I say it is an irony because while this may have been true in the past – it really doesn’t matter much anymore and I don’t know why they bother other than to maintain that “image”…
The Apple of today absolutely excels in crowded markets – markets where there are many companies executing on the same ideas. The point is if everyone is executing on what is basically the same idea – then the idea no longer really matters…
Almost all of the markets their products are in are extremely competitive, and yet they continue to perform above expectations in most of them – totally dominating in many. They are rarely if ever first to market with anything – but their entry into a market (once they get around to it) has a tendency to transform it completely. They seem to have a knack for this… They never appear to be competing with other companies – they always force other companies to compete on their terms.
Innovation and execution is virtually EVERYTHING for Apple – they just seem to like to maintain the image of having thought of everything first. I’m not saying that they never come up with original ideas (they do) – it’s just that the ideas are not at all that important to their success.
On a personal note – I also find your viewpoint on this surprising. I know from past experience both of us are opposed to software patents. In practice patents create an artificial market value for ideas. Ideas without patents have relatively little monetary value, because without the legal construct of a patent an idea is free to anyone who sees or hears it. I oppose patents (especially in software) because I believe that ideas should be free – the way to monetize an idea is to implement it better than everyone else (quality, innovation, execution, etc.).
I don’t quite understand how you can place so much value in ideas and still be opposed to patents – it seems like two diametrically opposed positions. That isn’t meant to be critical, I’m just curious how you rationalize that.
Finding ideas more important personally does not mean I automatically approve of protecting them. Note that I’m not criticising Apple for taking other people’s ideas – heck, I think it’s great! That’s how ideas are supposed to work – heck, it’s how mankind progresses the fastest. Especially in a world as frantic and fast as the technology world, protecting ideas with patents is not just monumentally stupid, it’s diametrically opposed to the industry itself. Patents were thought up in a world of relatively slow, mechanical development – not the fast-paced world of tech.
Every night a new, better, faster, and more fucntional CM9 build shows up. Patents are just incompatible with that.
Edited 2012-03-23 21:29 UTC
Fair enough… Read my other post (I replied to myself). I’m curious what you think about that type of approach.
To add to this, I don’t think I have ever really posted what I think the solution to the patent problem should be – and my previous post might by misleading.
It don’t believe ideas should be free in an absolute sense. There is definitely a need for some way to monetize them on their own – because they are often valuable.
My approach to patents would be simple. If you come up with an idea for something, you are free to “patent it”, but a patent would be a very different thing from what it is now:
1. A patent would not disclose the idea at all initially. What it would do is create a binding legal construct that would allow you to negotiate its use with companies who might want to purchase it.
2. A company who chooses to negotiate with a patent holder is essentially barred from using or disclosing the details of the patent with any 3rd party. If proof of such 3rd party disclosure is found – the patent holder can sue for damages. In essence it becomes an NDA but with much stronger penalties and government oversight and such negotiations are required to be recorded as part of the patent record.
3. As a patent holder, it is your responsibility to keep the idea secret from anyone you are not on record negotiating with. If someone else uses your idea and there is no documented negotiation tying them to your patent it is assumed that the idea was independent and your patent has no power over that implementation. If there IS a documented negotiation the government has power to investigate whether the party your negotiated with and the 3rd party has dealings – if so see 2.
4. Until purchase terms are agreed on and settled, companies can not execute on an idea in a patent, again with the penalty of severe damages if they violate this trust.
5. Once a patent is “sold”, regardless of terms, it becomes null and void and all legal ramifications of violating the terms fall under existing contract law. The patent is simply a protection during negotiation.
6. You cannot resell a patent – it becomes null and void once sold. Part of the process of selling it is at the time of the sale it becomes public record so that those wishing to patent an idea in the future can determine whether or not their idea is actually unique.
7. It is up to the buyer to determine whether a patent is actually unique during negotiation. Once terms are reached and the patent goes on record as sold, the seller is legally protected from any and all legal recourse concerning originality. I.e. buyer beware.
There is of course a lot to work out, but that is the basic framework. How is this different form existing law?
1. If you have an idea and you choose to productize it yourself (as in a company that makes products comes up with the idea) patent protection simply does not apply at all. Patents are a way to create a marketplace for ideas, not a way to protect products from competitors.
2. Once the ideas in a patent are sold, it is completely up to the buyer to decide how and if they want to disclose that idea. The idea itself is no longer protected legally – only the terms of the sale are protected (and only under contract law).
3. This form of patent offers no legal protection at all in the market place. It is simply meant as a way to protect inventors, not manufacturers.
Anyway, something like this would be immensely better imo.
Edited 2012-03-23 22:00 UTC
You took the words right out of my mouth Thom.
Here’s a TED talk about it as well.
http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_acti…
This applies not only to Apple, but to many other companies as well.
In what way was Kaplan in the trenches? You’ve fallen for the hagiography of the opening chapters of Kaplan’s view of events. Kaplan and Kapor didn’t think up pen-based tablt computing for the first time out of the ether on that plane trip. Pen computing was invented in the 50s and 60s with the RAND Tablet and the Styalator. Kay fully conceptualized tablet pen computing and its social implications in the 60s. People had already been thinking about it for a hundred years. Carr, the chief architect of anything actually produced by GO, brought all of his expertise and knowledge from Xerox Parc developing the Alto. Pencept, along with several others, was well ahead of GO in terms of timing and technology — they just didn’t get the hype being an oldschool NE tech corridor company rather than a flashy, well-financed SV startup… And ultimately GO purchased them to improve the quality of their system and handwritten recognition. Every tech company in the early 80s was trying the same — the reason GO failed so spectacularly is they didn’t have one piece of the pie, so they shopped it to EVERYONE in order to get them to make a device or make an OS component, or to make apps, and every time the potential partners were not convinced by the pitch or were already working on one or more pieces or knew they could execute the whole package better than GO ever could (the only sucker was AT&T and even then, they mostly fell for it just to rationalize their development of microprocessors). Kaplan was no more in the trenches than Steve Jobs was — and he was certainly orders of magnitude separated from the trenches than someone like Sakoman. Kaplan seems to, even now, want to hold onto some of that hagiography of a serendipitous idea shared over a troubled flight that no one else had had before him, but even in his shared comment here, it is very clear that even he can’t hold onto that myth. (Heck, it’s been more than a decade since I read it, but I seem to recall Kaplan even then pointing out in the book that he was shocked he was able to pitch investors when he didn’t have any tech or much of an original idea or much chance of successfully bringing it to market; that he was able to get so much money for so long on passion alone, and that whatever products they did produce was based solely on the ability to buy up or attract the real trench workers away from larger companies already working on the same thing.)
Trying to carve out some special “original idea” or “in the trenches” grunt work for Kaplan is at best odd and biased and at worst just plain wrong. (Or is that the other way around?)
Edited 2012-03-25 18:22 UTC
I would say Apple creates its own timing. When it decides the time is right, that time is inevitably the right time. It’s loyal fanbase willingly let themselves get drawn into it.
http://www.youtube.com/watch?v=qNSn6AtdSGM
It not soo much that they get drawn in, it is because they believe in what Apple do as a company.
http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_acti…
about 4 minutes plus is where it gets interesting.
I say “drawn in” is a better description because if they believe in what a for-profit company does, then they’ve bought the sales pitch. The company doesn’t, in return, care about its customers in the same way. So to “believe” in a company is being “drawn in”.
I can, say, believe in what Medicins Sans Frontiers do. I can believe in what TED does. I can even say I believe in what IBM does – at most for their fundamental scientific research. But Apple? Believing in a company whose sole output are overpriced shiny trendy gadgets? When it’s that kind of belief, that automatically qualifies as being “drawn in”.
Please note that by “drawn in” I don’t mean “taken for suckers”, although a sizeable portion of Apple buyers are suckers. People are allowed to like Apple products, but once they make it out to be a reason to support a company beyond paying for stuff, that’s being “drawn in”.
* I think the TEDx speaker tries too hard to make a strong case out of a weak correlation. The talk does suggest something though – the “inspiration” that generates “belief” – is a marketing ploy by Apple. Nothing more. Nothing less. He says, right around the 4 minute mark, that is why Apple is so good. They reverse the common marketing sales pitch. However – it is still a sales pitch. Believing in something that is ultimately a sales pitch is being drawn in.
Edited 2012-03-23 18:35 UTC
I can’t really disagree with what you are saying … but I don’t completely agree with it.
I don’t believe in any tech company. I happen to like Microsoft products because they work for me and suit me.
I got drawn in long ago into the open source ideal and I kinda came full circle after going into dev.
I think people get drawn into an idea, and it is hard to get out of that mindset, because you are somewhat emotionally invested.
He doesn’t really explore this other than that he says “They are more willing to forgive your mistakes.”
Edited 2012-03-23 18:38 UTC
It’s already been answered: the reality distortion field. I personally don’t find Apple products that appealing, but then I’ve never been particularly susceptible to advertising, whether it be TV campaigns or word-of-mouth campaigns.
eg, I’ve been a Cowon customer for a few years now. They’re kind of top of middle range and their players are always more featured and more spacious than a similar priced iPod and they don’t force you to use iTunes.
There really is nothing special about Apple, not even its ability to create myths around itself that gets its customers believing in it – exactly as the article and Kaplan discusses. More than a few people have noticed today’s Apple could easily be the talking head on a screen that gets smashed by a woman hammer thrower that IBM was back in the day.
Apple is not the only company completely dominating its own market that seems exceptional. Google does it in search. Facebook does it in social media. IBM does it in mainframes. Microsoft does it in corporate desktops. They’re all entrenched in their own market by their own myths. They won’t be breaking into anyone else’s market.
Fail. Intellectual collapse. Explaining a phenomena like Apple’s last ten years by waffling about the reality distortion field pathetic drivel.
The fact that you call it a Phenomena is proof of the reality distortion field…
You made the argument that Apple is somehow unique. Well, I gave my reasons why they’re not actually unique, but follows in the footsteps of other companies who have similarly cornered a market of their own.
Using phrases like “Fail”, “Intellectual collapse”, “waffling” and “pathetic drivel” without having made counter-arguments is itself a fail.
Sorry, but Apple is not special. Don’t feel sad. They’re just not. People buy Apple for media devices out of reflex. In the same way people buy Coke out of reflex. In the same way people use Google search out of reflex. In the same way people expect others to have a Facebook account out of reflex.
Never underestimate the power of Pavlov.
Apple’s market cap is bigger right now than the entire US S&P retail sector combined… It is bigger than the entire Semiconductor industry as well. And that is with a ridiculously low P/E ratio of about 15…
http://www.zerohedge.com/sites/default/files/images/user5/imageroot…
That IS reality – there is no distortion field involved. If that is not a Phenomena-with-a-capitol-P I don’t really understand what would do it for ya
Who else has done that?
What? Name a market that Apple has cornered… ANY market. There isn’t one. All of the markets Apple has products in are extremely competitive (and not with empty suits – companies with REAL money and resources to compete).
Ok, but so what? Apple certainly practices market psychology – there is no denying that. So does everyone else – like Coke and Google and Facebook. Whats your point? That isn’t what makes them unique or special – their success is. WHY are they so successful???
I don’t know exactly what makes them special, but they certainly ARE special – because they have a market cap hovering over 500 billion dollars and they make as you say “shiny trendy gadgets”…
Doesn’t that seem peculiar to you? Being able to sell $500+ gadgets that no one needs at incredible volume with extremely high profit margins… Reflex purchases, reality distortion fields, voodoo, whatever… a company that can demonstrate an ability to do that repeatedly is most certainly special.
You don’t call that a distortion of reality? A company with a MARKET CAP is bigger than entire sectors of the economy. The next you’ll tell me is that housing bubbles or credit bubbles are evidences of real value. That the Dot Com bust never happened. Or that the media companies really do lose at least $150,000 every time one song is copied.
When people start making arguments based on market cap and share prices and not real economic value – sorry, but you’ve just deceived yourself. You further prove that people willingly buy into propaganda.
They cornered the media device market. iPod. iPad. They were doing all right with their Macbooks and iMacs. But they really have cornered the market that netbooks used to be aiming for – portable but reasonably useful computing.
What do you mean “so what?” People here were making the argument that Apple is special in a way that wasn’t due to marketing (and hence psychology). I was countering those arguments. Did you not think there were other people commenting on this article?
I see the financial crisis haven’t taught people anything at all. Bubbles in perceived value is not special nor peculiar. You talking about the market cap as proof of anything just suggests that people are once again doing the Disco Stu thing. Newsflash, it’s not going to continue forever. Next thing you’ll be telling me is that subprime mortgages are a good thing because “LOOK AT THE ECONOMY AT 2007!”.
Do you know what a P/E ratio is? That is price to earning ratio. Apple’s is low – if you adjust their stock price based on the average P/E in their sector their stock price goes UP… Most investors consider their stock to be undervalued.
Economic Bubble (investorydictionary.com): An economic bubble occurs when speculation in a commodity causes the price to increase, thus producing more speculation. The price of the good then reaches absurd levels and the bubble is usually followed by a sudden drop in prices, known as a crash.
Apple’s stock price has absolutely no relationship to a bubble. It grew fairly smoothly over over the last 10 years – in fact Apple’s stock price growth trailed their profit growth by quite a bit most of the time. The dotcom bubble was investors throwing absurd amounts of money at stocks with no real positive profit outlook – Apple is remarkably profitable. If you think Apple’s stock price is a bubble you have no idea what a bubble is. Apple is simply extraordinarily profitable – there is no denying this – their market cap is a reflection of this, it isn’t inflated by speculation.
Please, define “real economic value”…
You may have some argument with iPod, but only to the point that their competition there is weak financially (because they already killed most of the big names off)..
iPads? Everyone and their brother makes tablets, and quite a few of the competitors in that market have very big pocketbooks…
Netbooks? How can you say something like “they really have cornered the market that netbooks used to be aiming for” – Everyone is competing in this space. How do they have the market cornered?
No – they were giving rationales of why they believe Apple products are good. You were denouncing their reasons and dismissing them all on the basis that it is pure “psychology” – as if they are all brain washed. My point is that sure, Apple markets themselves and creates a brand image – but so does everyone else. You could just as easily apply your argument against ANY company. But Apple is worth over $500 billion dollars – and you say they “are just like any other company”. Sorry, but they most certainly are NOT – that is just plainly obvious.
Considering all economic indicators and theories keep failing in practice, this amounts to nothing more than cargo cult reasoning. It’s easy to look at a successful company and point to a few things and claim that’s a sign of this and that. And then the company crashes and suddenly it’s “Oh we knew all along this would happen”. Same happened with Enron and many other companies with similarly good looking figures.
If there’s one thing history shows us is that the cynics are always right. Most investors of any company consider their stock to be undervalued, but investors always consider their stock to be undervalued until it all comes crashing down. It is simply stupid to trust anything any investor says. They’ll say anything.
Real economic value. How about this: have they actually sold $500 billion worth of iPods, iPads, Macbooks, etc and do the relationship with manufacturers actually amount to a significant percentage of that and adding to that the total salary/wages of Apple employees?
As you yourself pointed out, Apple has a market cap larger than entire SECTORS of the US economy. Do you REALLY REALLY think iPods and iPads and Macbooks etc are intrinsically more valuable than the goods sold in those entire SECTORS of the US economy? Do you REALLY REALLY think the price of Apple products accurately reflect the actual worth of the product rather than what people are actually willing to pay for now? Do you REALLY REALLY think that there are more employees working for Apple than there are for entire SECTORS of the US economy, as you keep pointing out? If an average Apple employee gets paid twice the amount of the average employee of entire SECTORS of the US economy, does that really mean that the employee actually creates twice the value for Apple than the employee for that SECTOR of the US economy?
Maybe I don’t know what a bubble is. But then again, you financially savvy types keep telling us “oh, it’s different this time, this time it’s not a bubble because we’re focusing on the right numbers this time”. And then POP! Still hindsight’s 20/20 and that translates to 20/20 foresight, right?
I’m working on a theory – the more figures financial types brings in to a discussion, the more wrong they are.
The iPad is clearly dominant in mindshare and in sales growth, as you and your numbers show. This doesn’t mean there aren’t competitors. They still carved out a market and cornered it. Sure, people were making tablets before Apple, but there simply wasn’t a solid market for tablets until Apple used their iPhone/Touch numbers to make what is basically an oversized iPhone/Touch a more acceptable purchase despite the cost.
I didn’t say they were just like any other company. Get your quotes right. I said they are just like any other company who have CORNERED THEIR MARKET. Not many companies successfully corner a market. But those that do have unprecedented expansion in said market.
If you haven’t noticed, the output capacity of the entire world’s economy has always been increasing. It’s only going to be a matter of time that a company gains dominance and breaks records. So they are NOT special. Special is not “better”. Special implies some amount of uniqueness. There is nothing unique about a company dominating and breaking previous records of domination.
And a thousand times the point that, no, Apple REALLY aren’t worth $500 billion. A good percentage of it is perceived value and that can be wiped out overnight. We haven’t fully seen the effect of Steve Jobs’ death yet. You can hide in the comfort of your numbers all you want, but you haven’t really demonstrated that you are any different from people who was sure the subprime mortgage economy would last forever, or that Enron was the ultimate investor’s dream.
Enron cooked their books – they were LYING. It was NOT the “same” at all. Regardless, companies do fail. In fact I almost guarantee that Apple will too eventually. But they are not failing now – far from it…
Well they had $50 billion in revenue last quarter – but that was rather exceptional. Total for 2011 was somewhere in the neighborhood of $100 billion. That puts their stock price somewhere around 5X their annual revenue (conservatively) – that is not at all out of the norm for even a slow growth stock, but then again Apple is not performing like a slow growth stock…
No. Because Apple’s stock price is not a reflection of the intrinsic value of their products. It is a reflection of their ability to MAKE MONEY. That is my entire point – they are most certainly not just “any other company”… IBM, Microsoft, whoever – name any company who has EVER demonstrated the ability to generate the kind of profits Apple routinely pulls in.
People are willing to pay a substantial premium for Apple products – and they do so repeatedly and predictably. It isn’t just marketing or psychology – they make things people want to buy. And after people buy them – they come back and buy MORE. Attributing the whole thing to group think is just sticking your head in the sand. There is something else going on…
You keep using terms you don’t understand the meaning of. Microsoft has the desktop OS market cornered. IBM has the mainframe market cornered. Apple does not have ANY market cornered (with the possible exception of the iPod – which is a rapidly shrinking market anyway).
Cornering a market (as a product maker) is quite simply having the largest marketshare without having a monopoly. These are Apples marketshare numbers:
Computers 12.9% (growing slowly)
Tablets 54.7 (was falling rapidly but seems to be flattening)
Mobile Phones 11.2% (growing slowly)
Music Players 78% (fairly flat)
The whole point of cornering a market is so that you can charge higher prices (and you are implying this is why Apple is able to do so). Look at their historic pricing… Apple’s margins have NO RELATIONSHIP WHATSOEVER with their marketshare. Apple ALWAYS has high margins – even in the computer and mobile phone market where their marketshare is tiny.
In short you don’t know what the hell you are talking about…
So you are saying they essentially entered the tablet market by leveraging the strengths of their other products. So what? That isn’t cornering anything – that is simply not being stupid. Again, everyone does this.
I’m still waiting for you to back up, with some actual facts of any kind, how you can keep saying they CORNERED their market…
The real test for apple will be when its iphone/ipad bubble burst, they can’t keep growing the phone and tablet market at that rate forever. will they have introduced a new product with the same growth and profit the iphone and ipad have today?
They might make hundreds of billions a year but if they aren’t growing, then the market doesn’t give a crap, just look at microsoft today.
That is my main problem with the “market” as it is today, endless growth is not sustainable, we live in a finite world.
That is exactly what people were saying about the “iPod bubble”… Then they released the iPhone and it was the same thing all over again. Now it is the iPad. They seem to have a knack for figuring out where the market wants to go next – you can’t write it off as luck anymore.
Of course endless growth isn’t sustainable. Im not saying it is. I just believe all this bullsh*t about their success being nothing more than group think and marketing trickery is insulting.
You can say that equally about any company – all it boils down to is bitter people flailing against the current high man on the totem pole. Apple will fail eventually. All companies do, but they are having a helluva ride so far. Give credit where credit is due I say.
They don’t “figure out” anything. The MAKE it happen. Apple knows that they can make a product and people will buy it. That’s the position they are in. It’s not luck. No one said it was. But they are not SPECIAL. You keep saying they are special, but they are not special. Just get over it.
Who cares if you’re insulted. The facts don’t care if you’re insulted. You being insulted does not make reality false. If you’re insulted by the truth – GOOD. You deserve to be insulted. I put you in the same category as creationists.
What a conveniently convincing lie to tell yourself that’s what people who are looking at the facts impartially are really doing. No one is saying Apple doesn’t deserve its success. What is being said is that Apple’s success simply isn’t due to its products alone. You yourself showed that with your magic numbers. Apple is worth more than it actually can create. If you don’t understand that the disparity can only come from perception related causes, then I put you in the same camp as Intelligent Designists.
Edited 2012-03-25 04:06 UTC
Please sir…
What will you say next ? That Windows 3.1 and Windows 95 didnt had its success only due to being much better than all the competition and no bugs ?!??
Clearly the mass public cannot go wrong ! They are not fools !!!
er … wait…
Finally, a voice of reason.
You’ve also highlighted a hypocrisy with these people arguing for Apple – they themselves will gladly say that Windows 95’s runaway success was due to group think and brainwashing. Which is true but is also not suddenly magically not applicable when its an Apple product.
Not me. I would say it’s success was mostly due to no real competition. OS/2 was better technically but IBM couldn’t figure out how to sell it properly (poor marketing, pricing, and 3rd party software). Apple was off in the weeds selling Macs and couldn’t be bothered (i.e. they didn’t see it coming).
Group Think and brainwashing? Not in the least.
You happily admit marketing played a role. And you also seem to imply that you don’t think marketing is the same as group think and brainwashing, due to your separation of those terms.
And yet, conversely, you had no problem characterising my arguments, when using the term “marketing” as insulting because it implies “group think” and “brainwashing”.
You proved you had a serious hypocrisy there.
I never once said marketing does not play a role. Your argument is that it is purely marketing… You simply dismiss people’s opinions based on the stupid notion that they are all delusional because they are being manipulated – therefore their opinions are worthless. How do you expect to have a rationale discussion about a product or company on those terms? EVERYONE markets their products – that is what I have been saying all along. Saying Apple’s success is purely based on marketing is a cop out.
The point was that you understood marketing played a role, but you didn’t equate it with “group think”. However, when I say marketing plays a role, you equated it with me saying “group think”.
What I’m saying is that you’re hypocritical.
No, I never made the argument it is PURELY marketing. You’re just making up stuff I’ve never said. How do you expect to have a rational discussion of anything when you make stuff up about what other people say?
The initial question was why Apple is so successful beyond what is normally expected. My argument that the DIFFERENCE between what is normally expected and Apple’s actual success IS about marketing in one form or another.
I never said people’s opinions are worthless either. The most I have said or strongly implied is that you must TAKE INTO ACCOUNT any pre-formed perceptions a person has in giving their opinion about Apple’s products and Apple as a company. Like it or not, people have shown they are willing to excuse Apple for things they would crucify another company for. That is fact.
I never said Apple were the same as Enron. That’s a problem with your comprehension.
I’m saying you’re making the same mistake as the PEOPLE who believed in Enron’s success. You pull numbers that support your case but ignore the other logical conclusions and numbers that don’t. And you financial types always tell us that you’re “looking at the right numbers this time, unlike last time when we also told you we were looking at the right numbers and we were wrong”.
And you say there’s no distortion of reality going on. The total REVENUE of Apple is $100 billion last year, and yet Apple itself is worth $500 billion. If you had $1 trillion dollars, would you in your right mind buy Apple and expect it to recover your $500 billion in five years time? Remember, you said the $100 billion was REVENUE. To recover the $500 billion you spent, the money has to come from PROFIT.
The fact that you can understand that Apple’s stock price is not a reflection of the intrinsic value of the products and at the same time believe their stock price is the value of their company… that’s why I keep saying you are likely one of those people before 2007 who told us subprime mortgages were good for the economy.
When did I ever say anything about group think? What you’ve just described IS marketing and psychology. People are willing to pay premium prices. This causes Apple to be valued more than what it can actually produce in profits. Yes, there is something other than group think going on. It’s called MARKETING and PSYCHOLOGY.
Tablets at 54.7% and music players at 78%. Yeah, THAT’S not cornering a market…
It’s strange how people like you can read these numbers, and understand the fact that people are willing to pay premium prices for items that don’t really cost much more than non-premium prices to develop and make, and NOT understand, therefore, that the rest IS being covered by marketing and psychology…
I don’t think you understand how market economy works. When the sale value exceeds the actual cost of a product, the rest is PERCEIVED VALUE. People, in a market, pay what they think something is worth. What they THINK something is worth. The ONLY logical conclusion is that marketing and psychology is responsible for the overvaluation of Apple products and hence their massive revenues.
[/q]
“Everyone does this” therefore “Apple is special”. That’s the power of the reality distortion field, not only of Apple but of anyone who believes what investors and economists say. Sorry, but you provided your own facts that shows Apple has the tablet and music player market cornered.
You, on the other hand, have not provided any good reason why Apple is special in any way. What you have provided is proof that you’ve been totally sucked in by the cargo cult religion that is finance.
I’m not going to go into a detailed reply – there is no point. I will say this: If you don’t understand that in a capitalist economy things are worth what people are willing to pay for them please go back to school and get an education. There is simply no such thing as “intrinsic value” in the real world…
And you’ve just given the biggest argument that it is just a reality distortion field in the end – but not just for Apple, but for the wishful thinking of economists who have never predicted anything worth a damn.
You don’t need to go into a detailed reply.
You just need to answer my wager – would you, if you had $1 trillion, buy Apple for $500 billion?
You need to understand that even in a capitalist economy, things can be OVERVALUED – hence implying things do have a real value. You previously acknowledged that bubbles do exist. And now you claim that, in the real world, things are actually worth what people will pay for them.
If I need to go back to school, you need to go to a psychiatrist to cure your psychosis. The same can go for your economist friends peddling your pseudoscience.
Edited 2012-03-25 05:33 UTC
Dude. Are you serious? Do you REALLY think the largest (by market cap) and most profitable tech company on earth can be created based on some advertising?
What about all that #1 in customer satisfaction and #1 in customer service stuff? You think that’s also marketing?
Apple does not even do that much advertising and very few people ever bother watching an Apple keynote so unless you think there is a huge conspiracy your argument is pretty weak.
So true. Compared to the amount of money spent by a company like Procter and Gamble or Unilever in order to convince people to use their toothpaste, the amount of money Apple spends on advertising is a rounding error.
You can say that Apple products or the semi-mandatory Apple ecosystem don’t appeal to you for whatever reason (and there are myriad valid reasons), but people aren’t drawn to Apple products for irrational reasons, or because of “advertising.”
People buy Apple products because of their inherent qualities, and people become loyal to Apple products because of their consistent quality. And Apple fans get very angry when Apple produces something that doesn’t make the grade.
Apple fans get SO ANGRY in fact that they’ll willing buy the next one, while shaking their fist in a threatening manner, saying “you better get it right this time!”
I never said anything about irrational reasons at all. You simply can’t deny there is psychological conditioning going on with Apple products. Marketing is more than just advertising dollars. It’s about image.
Have people never wondered why Apple tries so hard to defend its Community Designs? What did their Community Design actually do for “inherent quality” that warrants all the effort they’re making to protect it? It’s about image. The image of a featureless rectangular slab is part of the psychological game that Apple is playing.
You don’t have to spend advertising dollars on psychology. Especially not when you’re spending that money on defending a meritless Community Design.
Edited 2012-03-24 01:43 UTC
Customer satisfaction surveys would tend to disagree with you:
http://thenextweb.com/apple/2012/03/16/apple-tops-j-d-power-smartph…
The fact is, Apple is selling a ton of product, and their customers are happy for the most part. Of course, angry geeks will claim that this is brainwashing on Apple’s part, as they stomp off to root their Android phones to get the bloatware off of them.
I wasn’t the one who said Apple fans get angry when Apple makes a bad product. My comment was sarcastic – if Apple fans do get angry, as the person I replied to claimed – they seem to quickly forget about it the next time something shiny is waved in their face.
Nothing to do with me being an angry geek. Those are the facts. Psychology shows people are capable of strong cognitive dissonance. Apple fans are not alone, but they obviously salivate a lot of money every time Steve ‘Pavlov’ Jobs rings his bell. Even from the grave. Do people not remember the wailing over Steve Jobs’ death when two other giants in computing also died that week who arguably had a greater impact on computing than is visible?
Strangely, polls like that serve to strengthen people’s willingness to forgive a company for mistakes that they will crucify another company for.
For the record. I don’t own Android phones. I don’t even have a mobile phone. I don’t even have a landline. So no, this isn’t about having vested interest in another platform either.
Having read comments on this site and other sites and heard the opinions of many Apple buyers, it’s easy to see that a lot of the “customer satisfaction” stuff is partly due to people being a lot more willing to forgive Apple products – hence the reality distortion field.
Your apologetics is exactly the kind of thing the distortion field does. That’s why Apple, as you say, don’t do that much advertising. Furthermore they know that people buying overpriced trendy gadgets will defend their choices more vehemently than those who are more careful with their money. It’s a well known psychological phenomena.
Apple do more than marketing. They do psychology. Do people really think Apple would create the the iPad, for example, if they didn’t know that people would buy it out of a reflex reaction?
So you ignore actual statical research and instead you go with something you read in the comments on the internet as a basis of your world view?
Nice.
I cast doubt on all marketing research. I leave it up to you to believe that this “research” is done scientifically.
Good luck believing in the fairies.
For the love of God, do we really need to endless debate what Apple do well and how they may or may not steal technology?
Every sodding topic with yourself ends up this way and quite frankly I’m bored to tears.
I know Thom raised the subject (and part of me wishes he hadn’t) but there’s no need to focus on that aspect when there’s so much more to his article (and the book) than Apple alone.
Does anyone get the same impression that I do from Tony Swash’s questions that he’s one of those HR drones who starts one of those “employee free discussion” meetings with “First, let’s all talk about why we love working at this company!!!”
IBM especially in the 60s was a very different beast to Apple.
I have heard stories of people checking whether you socks were held up by garters under your trousers. IBM was very slow moving due to a lot of bureaucracy.
If I remember correctly the only reason IBM PC actually took off was because an outside somewhat radical department at IBM were tasked with it, because they said they could deliver in 1 year not 4 (which was the usual product lifecycle at the time).
What Kaplan, the article and others are saying, however, is not that IBM is like Apple, but that Apple is becoming IBM. You rightly mention all that stuff about the dress code and bureacracy. Apple’s analog to that is the lock-in, the walled-garden. And every idea had to go through Jobs where people risked their careers.
This is true.
However having to sell something to upper management is normal in most companies. If you can’t convince them of the benefits you are unlikely to convince customers of it.
When you have a very specific product catalog like Apple, I am not surprised it had to go before the “big man” himself before it would be accepted.
Edited 2012-03-23 19:13 UTC
The lifecycle of many Microsoft products is currently 4 years.
I don’t doubt it, but at the time IBM were worried about the Apple II making them irrelevant.
You underestimate the level of arrogance present at time at IBM. It was something like Balmer’s response to the announcement of iPhone.
Nevertheless, they did do something about it and why we have PCs.
The anti Microsoft sentiment gets old mate … real quick.
Edited 2012-03-24 18:46 UTC
FYI: Nothing to do with anti-Microsoft, everything to do with the fact that Balmer was the only one to be arrogant in his statement about iPhone.
You hit the nail right on the head! However, I have used the IBM comparison most often when referring to Microsoft and their idiotic push to force “Metro” down our collective throats! Just LISTEN to their execs whine about how the market is treating them! There is excuse after excuse as to why Windows Phone isn’t taking off! And the mega-bureaucracy at Microsoft mimics what we saw from IBM in the late 80s as well. It will be interesting to see who falters first, Microsoft or Apple. (I think both companies are doomed because of this mindset, but who will be the first to fall?)
First of all, thanks for the kind words about my book!
I wouldn’t fault Steve Sakoman or Apple in general for developing an idea that may have some of its roots elsewhere. You have to look long and hard to find something that is utterly, completely original. There were certainly attempts at pen computers before GO, but as some posts here note, the hard part is developing and delivering an appealing, functional product.
At the time that I had my early discussions with Sakoman, ‘pen computers’ were little more than a vague idea. What they would look like, how they would work, etc. wasn’t fleshed out. He rightfully deserves tremendous credit for the creativity and diligence he brought to the Newton effort.
The criticism that Apple ‘steals’ ideas is unwarranted. Everyone builds on ideas from others, but not everyone can start with a concept and build a coherent product. Imagining a ‘touch screen phone’ is light-years away from designing the iPhone. Other companies developed portable solid-state music players, but Apple perfected the iPod. A lot of that success was Job’s ability to use his star power to strike a deal with the music publishing companies, which no one else had been able to do, then to link the product with the iTunes store.
As my friend Nolan Bushnell once said (paraphased here), “Anyone can get an idea in the shower; it’s what you do after you dry off that matters.” Let’s give credit where credit is due!
Jerry Kaplan
If you think about it, “stealing” is kind of what Apple IS doing.
In the current copyright battle, there is the argument that copyright infringement is not the same as stealing a physical disk or book or a car because you haven’t deprived someone else of one less of that product.
Apple, however borrows ideas, then tries to PREVENT others from using the same idea through Community Design patents and many other design patents. In effect, they take an idea, then they try (and seem to be succeeding) deprive others the ability to use that idea. That’s a good case for it being stealing, rather than just borrowing.
Stealing is a reference to Apple’s claims that everyone else “stole” their innovations. Where, in fact, they are massively hypocritical about this whole thing and do blatantly “steal” other’s ideas (in a lot of cases without proper credit).
Edited 2012-03-24 02:42 UTC
I didn’t really mean it as a criticism though – I think this is exactly how the technology industry should work. It’s just very sad that Apple seems to think it’s okay for them to take and use ideas from everybody else – but not for anyone else to do the same with Apple’s ideas. Would it have been fair if Apple had sued GO because GO’s products were too similar to the Newton?
The word “stealing” was used here not because I personally think it’s the right word to describe it – I would have used sharing. However, Apple labels the practice you and I both agree is a good thing as “stealing”. Aren’t iOS and Android essentially the modern day equivalents of PenPointOS and NewtonOS, different implementations of the same basic idea? What gives Apple the right to use the courts to try and claim ownership of that basic idea?
Also, very awesome you posted a comment here – I’m honoured!
This article makes it seem like the book is just an overly generalized diatribe of “big scary company”. If you can just replace IBM with Apple in said book, and if doing so still seems to “make sense”, then I think you are getting caught up in the emotion of it all and not concentrating on facts.
Edit: I’m not defending big capitalist companies… they do a lot of really crappy stuff. But I don’t think it is fair to paint them all with the same brush.
Edited 2012-03-24 02:47 UTC
Apple is predominantly about marketing and retailing. It does not actually manufacture anything. It isn’t an integrated manufacturer in the same sense as Samsung. It is all about immense media clout; thanks to its immense advertising & PR machine with a humongous budget. This media clout over a period of 30 years has resulted in an army of irrational fan following who would buy every product that comes out of Apple and defend all devious acts of the company. It’s amazing that the largest company by market value, despite having highly questionable/monopolistic restrictions with regard to the App store and its iOS platform, attracts no adverse attention by the media and the FTC. The kind of media coverage that Apple gets is incredible!
What Apple is exceedingly good at is create myths. As Eric Raymond has pointed out in the past, “Mac was a slick repackaging of design ideas from an engineering tradition that long predated Jobs[Apple] (in this case, going back to the pioneering Xerox PARC WIMP interfaces of the early 1970s). Which would be fine, except that Jobs created a myth that arrogated that innovation to himself and threw the actual pioneers down the memory hole.â€
Raymond went on to state “nearly a quarter-century later Jobs would repeat the same game with the iPhone. The people who did the actual innovating in smartphones – notably Danger with their pioneering Hiptop – got thrown down the memory hole by Jobs’s [Apple’s] mythmaking .â€
Underlying your position is the assumption that ultimately the reason that people buy Apple products with such enthusiasm is based on some sort of delusional or manipulated basis rather than the fact that Apple simply make things that people, for totally rational reasons, find more attractive than their competitors products.
You do not find Apple’s products attractive and fail to see why other people do and thus other people’s behaviour is deemed irrational. You are dismissive of the actions of millions as being “an army of irrational fans”. You think you are being rational but in reality you are simply demonstrating a profound inability to rationally investigate the real world and understand why things actually happen.
The only reality distortion field around here is the one in the heads of people who think that Apple’s success is based on marketing. If one does not recognise that Apple is above all a products company then I fear you may be living in a parallel universe. A universe in which this:
http://www.skylarknetworks.com/blog/wp-content/uploads/2008/07/ipho…
is a copy of this
http://en.wikipedia.org/wiki/File:Color_sidekick.jpg
Microsoft’s advertising budget each year exceeds Apple’s. Looking at this chart of the advertising spend by the biggest spenders one can see that Apple’s budget is fairly modest.
http://www.marketingdegree.net/top-advertising-spends/
Aren’t many Apple fans doing the same thing, though, when it comes to Android? I can’t count how many times I’ve heard Apple fans, from Gruber to random commenters and people like you, state that the only reason people buy Android phones is because carriers market them so heavily, “rather than the fact that Google/OEMs simply make things that people, for totally rational reasons, find more attractive than their competitors products”.
See how this works?
Just to be sure: both positions are wrong. People buy Apple because Apple makes good products AND because they have good marketing – the same reasons they buy
Android.
It’s late and I have go some where so uber short response. I think sales channels do matter – sales channels are one of the differences between the phone and tablet market and between the device and the PC market. There is lot’s of evidence, for example, that WP7 handsets have suffered from lack of love amongst carrier sales people. I think a lot of people buy Android because they prefer them but I also think some (how many?) buy them because they go to their usual phone shop and say I want to upgrade and get shown a phone and buy it. The role, weight and importance of sales channels in the device/phone market is a very, very interesting topic and one worth exploring in some depth at some point (hint: do an article on it Thom!). Right – off to the pub!!
Fail. Intellectual collapse. Pathetic rambling. (I can do it too.)
You really really think advertising budget is all that matters? It’s who you market to and how you market it. Apples advertising, while not as costly, is REALLY EFFECTIVE. For you to claim the effectiveness advertising is all about how much money is spent on it is ridiculous. Apple advertisements wins awards. If you think the quality of an advertising campaign (rather than the size and duration) has no appreciable effect on customers, you’re living in a land of unicorns.
Furthermore, MARKETING is not just advertising. It is about creating the perceived value, which is mostly about appealing to hipster twats. You can do that without that much advertising. A large part of it can simply be dressing like a hipster twats and you’ve got those twats’ attention.
Are you really arguing that a company that is selling around $185 billion worth of products a year, whose sales have been increasing at a rate of 100% and more per year for several years is doing this by mostly “appealing to hipster twats”.
All I can say is given Apple’s growth over the last decade there must have been a mysterious and vast increase in the hipster twat population
no doubt about that … the more people i talk to the more i realise that this world is lost for.
like it is said : “I dont want to live in this world anymore”.
So yeah, although i am not saying that is the case, but yeah, it would be totally possible for being marketting alone.
Do you know how books and CDs and such make it on to best selling lists?
The publishers actually go out and buy the books. So even though they lose money doing so, they bump up their sales figures. Once it reaches a critical point, the fact that their sales growth figures are so big that they start getting on lists become advertisements in themselves, causing people to buy them just for being on the list. This further accelerates those figures and pulls the figures up even more. It’s a well documented marketing practice and phenomenon.
Hipster twats show they are willing to spend more money than is sensible. They do this with clothes, music and computing devices. Look at the iPad ad from the Charlie Brooker rant that I linked to early on and tell me that ad isn’t marketed towards hipster twats.
Once they get enough hipster twats buying, the wannabe-hipster-twats see the once overpriced gadget as suddenly worth the money.
This is called a positive feedback loop. Positive feedback loops happen all the time and are responsible for anything that causes acceleration beyond what is normally sustainable. It’s even well documented in NATURE and are more commonly referred to as arms races – they are a special case of positive feedback loops. The golden goal of marketing is to create these positive feedback loops.
And yes there actually has been a mysterious increase in the hipster twat population. This is suggested by the increase in the number of shitty commercial music acts and the increase in sales for these shitty commercial music acts and their product advertising. It shows that more people are willing to spend more than is sensible for ordinary mass marketed products. An increase in the hipster twat population increases the population of wannabe-hipster twats also and that is a non-linear correlation.
It’s saddening to see how many supposedly intelligent people really can’t understand that they’re being heavily psychological influenced. In Australia, there was a show called The Gruen Transfer which got marketing types together to explain all the tricks that marketers use to influence sales. You’d be surprised at how well subtle marketing works into making people believe they’re making their own choices and not just doing the marketer’s bidding. That, in turn, gets people defending their choices as well thought out, not understanding that’s what the marketers aim for and have succeeded in doing.
The greatest trick marketing ever pulled was to convince gadget nerds that marketing doesn’t exist. I think that’s how that quote goes…
So marketing is a form of social engineering?
Social engineering is a fancy term for marketing. Anything that involves manipulating perceived value through means other than manipulating real value can probably be classified as social engineering.
This is not to say it’s a bad thing. But for people like galvanash to completely dismiss the effects of marketing is lunacy. Especially when people are willing to fork out more money than is sensible.
If anything, marketing, the manipulation of perceived value, is the only thing that can explain Apple’s utter domination.
Sure, but it only works (i.e. results in a net profit) if the book doesn’t suck. The product DOES matter, or people stop buying it… Then you get into a negative feedback loop – consumers have some power in the equation too…
Same thing. In the end the product still matters…
I don’t think anyone has said marketing doesn’t exist… They simply said THEY LIKE THE PRODUCT. The problem with your whole argument is that you twist marketing into some supernatural force that can make people like things that are in fact totally worthless crap. I’m not saying that can’t happen (pet rock?), but it is relatively rare – and it is possible for a heavily marketed product to actually be good on its own merits.
Liking an iPad doesn’t make you an idiot. Thinking that liking an iPad makes you an idiot DOES make you an idiot… It simply ignores the fact that people like the freedom to spend money as they see fit – they can rationalize a choice. Marketing influences them, but it doesn’t control them.
Do you buy bottled water? Your an idiot. Do you ever buy anything you see on TV? Your an idiot. Do you drive anything more expensive than a $1500 used car? Your an idiot. Do you play video games or watch movies? Your an idiot.
I’d bet a whole lot of money that one of these applies to you… How do you like being called an idiot?
Edited 2012-03-25 06:02 UTC
*cough* Twilight *cough* The Da Vinci Code *cough*
Real world evidence continues to prove you wrong. People will buy shitty products if it’s on a list somewhere and they’ll try to convince themselves the list has nothing do with it when in fact it plays a disproportionate part of it.
*cough* VHS *cough* Windows *cough*
When have I ever made the argument that heavily marketed products cannot be good on its own merits? I did not make that generalization. What I DID say is the Apple products are not as better than its competitors as the difference in the price of those products suggests. You, on the other hand, DO make that claim by making the proxy claim that Apple is worth $500 billion dollars because they really produce $500 billion worth of value and perception of value is an inconsequential percentage of it.
No one has said marketing doesn’t exist. What people have said is that it plays an inconsequential part of it. Like it or not, psychology affects us more than you know. Deal with it.
I don’t twist marketing as a supernatural force. However, marketing is a powerful force. It’s strange for you to dismiss marketing as impossible to have a disproportionate amount of power in positive feedback loops, but see no problem in trying to give me a lesson in capitalist economics, which uses terms like “market” and “invisible hand”.
Do you know what? I went back through all the comments. Did a Ctrl-F for the word “idiot”. Did you know you’re the only person who has used the word “idiot” more than three times in a post? Did you know I never used the word “idiot” in any of my posts? Not only that, I never went so far as saying being susceptible to marketing makes someone an idiot. Being susceptible to marketing and psychology makes someone HUMAN. Nothing wrong with being human. But there’s everything wrong with believing yourself to be above being HUMAN in your self-assessed rationality. There is everything wrong with denying that you’re HUMAN. There is everything wrong with selectively picking numbers that try to show it has nothing to do with being HUMAN. And that is why I will now put you in the same category as creationists.
Therefore, I also did NOT make any argument that can be construed as saying people are idiots for like iPads. However, I will say people are idiots for liking iPads AS MUCH AS THEY DO. People even identify with Apple and Apple products, which is much more than LIKING a product.
When someone tries to clear away the myth and mystique of a company with logic, reason and evidence, and for another person to use magical economic numbers as a counter-argument, only to reveal that is because they felt attacked by the initial demystifying, is nothing short of identifying oneself with said company. Liking said company’s product to the point of identifying oneself with the company, and feeling personally attacked when another doesn’t buy into it – that is being an idiot.
Would you bet $500 billion? (You haven’t answered my wager. If perceived value = actual value in a capitalist economy as you schooled me on, would you really pay $500 billion for Apple if you owned $1 trillion?)
Do I buy bottled water? No
Do I ever buy anything I’ve seen on TV? Yes. But not an iPad 2. In fact, TV commercials tend to put me off a product. I stopped buying Coke for 5 years because I hated their ads. I’ve started drinking Coke occasionally, mainly because I no longer watch TV and so haven’t seen an ad for Coke for a long time…
Do I drive anything more expensive than a $1500 used car? I catch buses and trains.
Do I play video games or watch movies? Yes. But most games or movies aren’t hypervalued in the way that Apple products are. I bought Halo Anniversary for $60, but then, Halo is so far the only game franchise I’ve bought more than one title of…
In case you haven’t got it yet – it’s about budgeting. Sensible spending of hard-earned dollars. Hipster twats have parents who buy everything for them. That relationship won’t last forever.
How do you like revealing to everyone that your attempts to use economics voodoo to try and justify your reasons amount to nothing more than not being liked calling an idiot for liking something overpriced, especially when you weren’t even being called an idiot in the first place? I’m pretty sure that’s a complex of some sort, but I don’t know what kind of complex it is.
There ARE people that GENUINELY like both of those books, and not because of marketing. Tastes vary.
VHS won because of marketing? No, it won because it was better where it mattered:
1. Much longer recording times – tapes were not cheap at first, so it mattered how much use you got out of one.
2. JVC licensed VHS cheaply – Sony didn’t.
3. Early single piece consumer level Betamax cameras could not playback – they could only record. VHS did both from the start. And they were cheaper.
4. Rentals. More material was available on VHS. Positive feedback loop…
In fact I would go so far as to say that VHS was simply better period. The difference in picture quality was simply immaterial to the market, i.e. it’s best feature was one that no one cared about.
And Windows… there are perfectly rationale intelligent people that use it every day and are quite happy with it. It isn’t marketing that makes them do this – it meets their needs. There are also rationale arguments to be made as far as areas in which it is an inferior product compared to the options available. You are not making any of these arguments though – you are just copping out by explaining it away as marketing…
How the hell do you quantify that? That is a pretty blanket statement. An entry level iPad for instance costs $399. That’s about $100 more than most of the competitions entry level stuff. Many, if not most, people who have experience with the other options (Kindle Fire, Playbook, Touchpad, etc.) would say the difference is easily worth the extra $100 – maybe even more. And they can give perfectly rationale reasons WHY (I won’t bother, I would run out of space fairly quickly)…
No. I said Apple is really worth $500 billion dollars because that is what the market has deemed them to be worth by buying their stock at the current pricing. You, on the other hand, keep bringing up “perception of value”, as if there is another type of value. There isn’t. Value IS based on perception. That is not marketing though, that is economics. There is no such thing as “intrinsic” value.
I don’t claim it is inconsequential – just that it is no more consequential with Apple than it is with HP or Microsoft or anyone else. So it DOESN’T MATTER when discussing the relative merits of the company or its products.
Idiot. Hipster Twat. Same thing. I’m actually quite polite normally – you just rub me the wrong way.
What a load of shit! Your INJECTING myth and mystique into the discussion. I’m simply taking the position that the reason Apple is doing so well might, just maybe, have at least a teeny bit to do with the products they sell.
And I absolutely do not identify myself with Apple. I don’t own any of their stock. I do have a few of their products, and I am quite happy with them and what I paid for them on their own merits.
And I’m not trying to defend Apple. I don’t even care – we could be talking about any company. Your arguments are not even about Apple – they boil down to how stupid you think consumers are. Guess what bud, your one too.
Me personally? Hypothetically if I had a trillion dollars I wouldn’t buy Apple. I don’t believe in putting all my money in one basket. It WOULD invest at least some of it in them though – and based on past performance there is no reason to think I wouldn’t get a return.
In reality though, if I had a trillion dollars I would probably give most of it to charity. I don’t have any need for that kind of money and I don’t have the ambition or desire to go empire building…
I AM a parent (3 kids). I’m 40. No one buys anything for me. I would be happy to explain why I bought the Mac Mini I have, or the Macbook Air, but there would be no point because you would just say I’m a mindless drone who can’t think for himself…
That was not your argument. Your argument was that marketing ultimately does not work for crappy products. It is a demonstrably wrong argument. Those people who like Twilight and Dan Brown books are more likely to like those books because they were massive bestsellers.
You keep on making arguments, I rebut them, and you forget the argument you were making in the first place.
You made the argument that crappy products eventually fail. It just doesn’t happen. I addressed THAT argument. Now you are making it seem as though I was bringing them up as examples of marketing.
No, that you are putting words in my mouth is a straw man. You do so in reply to a post in which I even explained why I did not dismiss people who like Apple as idiots. I even brought up evidence of me NOT making such a generalization.
I guess it makes you feel better to picture yourself as part of a persecuted demographic.
I never said there weren’t any rational reasons. But now many Apple buyers do so out of rational reasons and how many are just taken in by the marketing?
Wasn’t there some “research” a while ago that showed most people who bought iPads have a few months of heavy use which tapers off significantly after that? If that isn’t people buying a device they didn’t actually need all that much because of marketing then you’re deluding yourself.
Now you’re just arguing my point. You were the one who fired off about “reality” in the first place and now you admit it’s ALL perception of value. That was MY point.
Marketing matters more for Apple than Microsoft or HP. I can’t even believe you can claim otherwise. Apple is a company about image. From the 1984 ad to the Mac vs PC ad to the Jobs wearing black turtlenecks and silhouette iPod ads. Apple markets image more than the others. The others try to market features.
I tend to do that when I use logic, reason and evidence.
And no, “Hipster Twat” is not the same as “idiot”. I really hope that isn’t the sole reason why you think I’m making arguments about certain people being idiots. If it is, then it’s your own fault you get your definitions mixed up.
Not a “teeny” bit. You argue that most of how they do well is the product. It simply isn’t. If they were to sell an iPad without the Apple logo on it, it would simply not sell as well. And if you think it would, it explains why you believe economists…
This is proof you identify yourself with Apple, because you keep saying I made arguments about how stupid I think consumers are when I keep pointing out I HAVE NOT MADE SUCH ARGUMENTS.
Then Apple isn’t REALLY worth $500 billion is it? You yourself claimed that in a capitalist system, perceived value is actual value. But when it comes down to it, you wouldn’t buy Apple if you had more than enough money. That, my friend, is the REAL value it’s cost. I doubt any of the economists would actually buy Apple for $500 billion. Therefore, Apple ISN’T REALLY worth $500 billion. Because people wouldn’t actually buy it if it was possible. That is Apple’s real value – when perceptions of its value are forced to become sober.
[/q]
I think your inferiority complex is filling in a gap about me making arguments about mindless drones I did not make.
The major demographic for Apple products is the 20 to 35s. Hipster twats die off at about 30.
Never heard of Phillips video2000 ?
The amusing thing is that galvanash lists pricing and “value for money” as reasons that VHS was “better” but doesn’t understand that pricing and distribution is a part of Marketing. The keyword there is Market, and advertising is just part of Marketing. Pricing is another part of Marketing. So is distribution. So is the ability to get people to accept lower picture quality if it meant greater support.
To add to my previous debunking of this point, here’s another thing to consider. Apple was the first (as far as my limited knowledge in this area goes), and is still a leader, in giving graphic designers prominence in the development process of a computer product. Microsoft tried to fake it with XP and only gave into graphic design for the Ribbon interface. Sure, you can claim that as a development expense rather than marketing expense, but you can’t not see that Apple really cares about image – hence psychology – more than any other computer company there ever was.
Thus, it is empirically more consequential for Apple than it is for Microsoft or HP. Nothing to do with group think or brainwashing. Humans care about looks*, no matter how liberal or politically correct a person believes themselves to be, and Apple creates a perception of a highly unified look and feel. And you can’t deny that there is more intentional psychology at work for Apple than for Microsoft or HP or IBM when Apple can get people believing it stands for individualism and creativity when it produces the most conformist, pristine, uniform, closed, protected, easy to use products in the personal computing/media market.
* And if people don’t believe me, then let me remind everyone of all the sissy whining of computer “geeks” and “nerds” over Ubuntu’s previous “ugly” brown color scheme. Not even people geek savvy enough to use Linux could get rid of their inherently human superficiality. “Right tool for the job, unless it’s coloured shit brown”. That’s REAL mature, GUYS. Sometimes I think I’m the only person who doesn’t let bad colour schemes or bad typography ruin my day. There are so many other inconsequential things to annoy people already.
Edited 2012-03-25 15:19 UTC
You couldn’t make this shit up. Have you come off your meds again?
In case you haven’t noticed, “Hipster twat” is a DEMOGRAPHIC, not a biological species. Idiot.
Oh, and how dishonest of you for not quoting the REST of my post which explained what I meant by the “increase” in the “population”.
You illustrate what it has come to – in order to maintain your self-deception, you stoop to misrepresenting people’s arguments. Reality distortion field – you’re in it.
Once again, you show you have no logical arguments to back yourself up and thus resort to misquoting and misrepresenting. Case in point, you haven’t even bothered trying to rebut the fact of publishers and how they manipulate sales figures to get on best seller lists so they can start a positive feedback loop – and why this effect could not account for a significant portion of Apple’s success.
You. Fail. Intellectual collapse. Vacuous idiot.
Edited 2012-03-26 00:50 UTC
In case you haven’t noticed, “Hipster twat” is a DEMOGRAPHIC, not a biological species. Idiot.
Oh, and how dishonest of you for not quoting the REST of my post which explained what I meant by the “increase” in the “population”.
You illustrate what it has come to – in order to maintain your self-deception, you stoop to misrepresenting people’s arguments. Reality distortion field – you’re in it.
Once again, you show you have no logical arguments to back yourself up and thus resort to misquoting and misrepresenting. Case in point, you haven’t even bothered trying to rebut the fact of publishers and how they manipulate sales figures to get on best seller lists so they can start a positive feedback loop – and why this effect could not account for a significant portion of Apple’s success.
You. Fail. Intellectual collapse. Vacuous idiot. [/q]
I guess that answers my question about your meds
What was that? Was that the sound of you having no counter argument to make?
Yeah, I expected as much.
So basically, Tony Swash is the kind of person who really believes that books and CDs get on best seller lists purely on the back of the quality of writing and/or composition and/or performance and that applies to every product ever sold.
And I’M the one on meds, supposedly.
Sakoman is a really nice guy, i met him at be.inc back in the day where he was one of the founders of the company.
I myself was just blown away with a fact that happened and was not discussed here before ( i think ) :
Few years back, when there were no “ipad’s”, Tablets already existed ( similar to the Ipad ). People didnt complain about lacking features of tablets or how bad they worked, but with the idea that a tablet was stupid.
I think, if i am not mistaken, on this exact website ( osnews ), this discussion came up. Where PC’s and Laptops could do all that Humanity needed.
Now what i never understood and was blown away was when i saw people camping outside the stores to buy an Ipad. How they seemed to be the most happy people on earth. It seemed that a day without an ipad was like being dead.
Now… years that we have the Ipad and Itab and etc, honestly… It didnt change nothing. At least to me and those next to me, life is still as it was before.
I am not bashing the Ipad or anything, its cool and if i was a billionaire, i would buy one for sure ( although i dont really see any special use case or need for it ). But what was that fanatic rush to buy Ipads ?
One day we are saying tablets idea is dumb, Apple announces the Ipad, next day people cannot live without the Ipad.
…And yet, to this day, I still can’t think of anything worth doing on a tablet (please note, I said “tablet” not iPad.) The cheap-o Android I bought to test the waters is now simply gathering dust.
I guess I’m not completely alone, judging by the fairly heated responses around here (didn’t take us long to invoke Godwin’s law.)
So this is the paradox for me. How Apple can make money hand over fist, yet make a product that seemingly has no tangible benefit for people who “want to get things done.” (See my previous posts as to what constitutes “doing work.”) I reckon that’s doing in a few heads around here.
In my view, that means Apple are simply the worlds most successful toy manufacturer at this point in time. Comparisons with IBM should end there!
Having read OSNews for a while now, I think OSNews is a special case. Allegations of bias, with the implication that it is automatically bad, is the OSNews equivalent of Godwin.
Not EVERY point of view is equally correct. Some are more correct than others. Thus, the accusation of bias is used in much the same way Nazi/Hitler comparisons are used to stop rational discussion of a topic.
Frankly, I was amazed that it took 6 pages before someone tried to short-circuit a discussion by crying bias.
Apple steals, we all know that. So does everyone else. Apple’s “innovation” though is in the detail. There are thousands of great tech ideas constantly floating about and most turn to nothing, when Apple puts it’s grubby little mitts on one, they turn it into success. The devil is in the detail. Apple did not invent the WIMP interface but it did create (invent?) many of the features we take for granted. Apple did not invent touch screen phones, but again many of the features considered to be generic now, first appeared on the iPhone.
As for Apple being the next IBM, who knows. Personally, I don’t see it. Apple’s approach (at least under Jobs) has been to “bet the company” every couple of years. IBM was never so bold. Apple’s DNA dictates the engineers and designers have a much bigger say than in companies like IBM. The decision making process is far far faster. Apple doesn’t do market research or focus groups. It’s in their DNA to skate to where the puck will be.
Whether it will stay like that in a post Steve Jobs era remains to be seen.
Thomas Watson Jr bet more than the entire company on mainframes. And I think Watson, its Deep Blue and Deep Thought predecessors, and its fundamental science research is more bold than anything Apple or Microsoft or Google has done. Apple knows it can do well by selling what people want – but it can never be so bold as to invest in the quantum mechanics research that IBM does that enables Apple to make its products in the first place. IBM also contributes to cancer research and other diseases. IBM was also bold for getting rid of its PC arm. IBM was also bold for being the first company to adopt a equal opportunity policy before it became law, and they did it in the racist South.*
“Apple being the next IBM” is not saying that they will be the “next big thing”. It’s saying they will be the next “too big” thing.
* Of course, IBM completely mishandled the case with Lynn Conway, so let’s keep it real. And IBM is a shadow of its former past in terms of boldness.
IBMs pedigree and achievements stand out on they’re own. IBM has contributed far far more to science (if not modern desktop or mobile computing per se) than Apple. No arguments there.
“”Apple being the next IBM” is not saying that they will be the “next big thing”. It’s saying they will be the next “too big” thing. ”
That’s just my point, i don’t see any evidence of Apple being too big just yet. Agree IBM at it’s best did far far more than Apple.
That’s kind of how it is with things that are not too big but are on their way to becoming too big. Things that are not too big often don’t appear too big until they become too big in hindsight.
If Steve Jobs was still healthy, I think Apple could have created a lot more. Apple could afford to be more bigger simply with him at the helm. OSX, the iPod, the iPhone, then the iPad came under his tenure and I think that variety is a key part of their success. Unless there’s another Steve Jobs persona in Apple, or somewhere they can import from, the most Apple will be able to create is the next OSX, the next iPod, the next iPhone and the next iPad, but not the next iSomethingSufficientlyDifferentAndExciting. The next iSomethingSufficientlyDifferentAndExciting I think does more to boost the Apple mythology than an iPhone 6 could. And it is this potential shrinkage in Apple creativity that might be what causes Apple to become too big.
If Tim Cook manages to create* the next iSomethingSufficientlyDifferentAndExciting, I’ll happily eat my words.
* Create in the Al Gore sense, of course.
I’d say TV is the final thing for Apple to conquer – most likely Jobs left a bunch of potential options open that Cook & Co. will now have to choose from. After that though…
In any case, Apple will rule the tech roost for AT LEAST the coming 5-10 years. After that – we’ll be looking at the kind of gradual and very steady decline Microsoft is currently experiencing.
I think/hope that between Ive and Cook they’ve got the vision (and teams) to keep going for some time yet.
Maybe they should hire Jeff Bezos. Sure, he doesn’t have the eye for design, but according to Steve Yegge, Bezos is a fast and complete learner. He’s already got the control freak, impossibly high standards and the visionary aspects of the persona well developed. An eye for visual design can be learned.
This article betrays Thom’s biases. GO is most well known for having the most talent and the largest financing of a startup at the time and delivering NOTHING! Yes, GO’s software and devices were innovative, but they didn’t sell. Kaplan needed to pivot every six months (and he did so amazingly well – using his and Kapor’s rep to rationalize continued investment.) They burned millions and millions with very little to actually show for it. In the end days, they pivoted to a completely “new” company called EO which was completely dependent on AT&T — they still could barely sell any units, and in the end, some of the best minds, talent, ideas, and money were completely flushed down the toilet. That is the story of GO.
I can’t even fathom how one very out of context quote about IBM (it almost feels like Thom was like: “Oooh, oooh, oooh! He said religion. He must be talking about Apple!”) can be contorted around to Apple and an accusation that Apple “stole” the Newton based on a failed attempt to recruit Sakoman. (And ignoring that GO was embroiled in suing Microsoft for IP theft for much of its existence — not Apple.)
If you want to conflate innovation with “inventing something that no one ever ends up using because of poor execution and lack of focus” and damning Apple for actually being successful with products that people actually use, so be it — but you aren’t being very persuasive with this misappropriated, contortionist anecdote.
Edited 2012-03-25 16:49 UTC
And as we all know, bias is inherently EVIL!!! Did you know Hitler was also biased? Why, if you’re biased, you may as well be the next Hitler! Go away – how dare you report on what <Y> says/is/does! Next thing you know, you’ll be gassing Jews and gypsies! In fact, I hold you personally responsible for Auschwitz and Mel Gibson!
When people start to put random words in bold in order to make a point, you know that something has went wrong in a comment section.
Bold is the new caps.
I don’t understand your point? How else can one place emphasis on important concepts in a discussion?!? Would it suit you if we just italicized the key concepts in order to better highlight them?
Don’t know if ironic or not, because I’m a bit tired right now, so…
Emphasis in itself is not bad, when used parsimoniously. And bold is not a bad marker of emphasis either. But when every member of a discussion starts to feel a need to put emphasis on the central parts of his post, which also tend to be the most aggressive ones, it starts to feel like the rich text equivalent of a crowd of people yelling at each other, more than a reasoned discussion.
Edited 2012-03-27 20:11 UTC