In the weeks preceding the April 24th release of Apple’s quarterly earnings, a number of old canards sent the stock down by about 12%: Carriers are going to kill the iPhone Golden Goose by cutting back “exorbitant” subsidies; iPhone sales are down from the previous quarter in the US; inexorable commoditization will soon bring down Apple’s unsustainably high Gross Margin.
The earnings were announced, another strong quarter recorded, and the stock rebounded 9% in one trading session:
At least one doubter is finally convinced: Henry “The iPhone Is Dead In the Water” Blodget has become an Apple cheerleader, penning a post titled Yes, You Should Be Astonished By Apple. (Based on Henry’s record, should we now worry about the new object of his veneration?)
There has never been a dearth of Apple doomsayers. The game has been going on for more than 30 years, and now we have a new contestant: George Colony, an eminent industry figure, the Founder and CEO of Forrester Research, a global conglomerate of technology and market research companies.
Mr. Colony, an influential iPad fan, maintains a well-written blog titled The Counterintuitive CEO in which he shares his thoughts on events such as the Davos Forum, trends in Web technology and usage, and, in a brief homage, his hope that “Steve’s lessons will bring about a better world”.
We now turn to his April 25th post, Apple = Sony.
There are two problems with the piece: The application of a turgid, 100-year old “typology of organizations” that’s hardly relevant to today’s business scene, and an amazingly wrong-headed view of Sony and its founder, Akio Morita.
Colony offers the banal prediction that others have been making for a very long time, well before Dear Leader’s demise: With Steve Jobs gone, Apple won’t be the same and, sooner or later, it will slide into mediocrity. It happened to Sony after Morita, it’ll happen to Apple.
In an act of Obfuscation Under The Color Of Authority, Colony digs up (nearly literally) sociologist Max Weber to bolster his contention. Weber died in 1920; the 1947 work that Colony refers to, The Theory of Social and Economic Organization, is a translation-cum-scholarly commentary and adaptation of work that was published posthumously by Weber’s widow Marianne in 1921 and 1922.
From Weber’s work, Colony extracts the following typology of organizations:
1. Legal/bureaucratic (think IBM or the U.S. government),
2. Traditional (e.g., the Catholic Church)
3. Charismatic (run by special, magical individuals).
This is far too vague; these types are (lazily) descriptive, but they’re fraught with problematic examples, particularly in the third category: Murderous dictatorships and exploitative sects come to mind. What distinguishes these from Apple under Jobs? Moreover, how do these categories help us understand today’s global, time-zone spanning rhizome (lattice) organizations where power and information flow in ways that Weber couldn’t possibly have imagined a hundred years ago?
Having downloaded the book, I understand the respect it engenders: It’s a monumental, very German opus, a mother lode of gems such as the one Colony quotes:
Charisma can only be ‘awakened’ and ‘tested’; it cannot be ‘learned’ or ‘taught.’
True. The same can be said of golf. But it does little to explain the actual power structure of organizations such as Facebook and Google.
Instead of shoehorning today’s high-tech organizations into respectable but outdated idea systems, it would behoove a thought leader of Mr. Colony’s stature to provide genuine 21st century scholarship that sheds light on – and draws actionable conclusions from — the kind of organization Apple exemplifies. What’s the real structure and culture, what can we learn and apply elsewhere? How did a disheveled, barefoot company become a retail empire run with better-than-military precision, the nonpareil of supply chain management, the most cost effective R&D organization of its kind and size? And, just as important, are some of these marvels coupled too tightly to the Steve Jobs Singularity? That would be interesting — and would certainly rise above the usual “Charismatic Leader Is Gone” bromides.
Now let’s take a look at the other half of the title’s equivalence: Sony.This is Muzak thinking. It confuses the old and largely disproven brand image with what Sony actually was inside — even under Morita’s “charismatic” leadership.
I used to be an adoring Sony customer, bowing to Trinitron TVs and Walkman cassette players. But after I got to see inside the kitchen (or kitchens) in 1986, I was perplexed and, over time, horrified.
Contrary to what Colony writes, there was no “post-Morita” decadence at Sony. The company had long been spiritually dead by the time of the founder’s brain hemorrhage. The (too many) limbs kept moving but there had been no central power, no cohesive strategy, no standards, no unifying culture for a very long time.
Sony survived as a set of fiefdoms. Great engineers in many places. (And, to my astonishment, primitive TV manufacturing plants.) During Morita’s long reign, Sony went into all sorts of directions: music, movie-making, games, personal computers, phones, cameras, robots… For reasons of cultural (one assumes), Sony consistently showed an abysmal lack of appreciation for software, leaving the field to Microsoft, Nokia for a while, and then Google and Apple.
Under Akio Morita’s leadership, Sony took advantage of Japan’s lead in high-quality device manufacturing and became the masters of what we used to call the Japanese Food Fight: Throw everything against the wall and see what sticks. When the world moved to platforms and then to ecosystems, Sony’s device-oriented culture — and the fiefdoms it fostered — brought it to its current sorry state.
Today, would you care to guess what Sony’s most profitable business is? Financial Services:
How this leads to an = sign between Apple and Sony evades me.
This isn’t to say that Apple can’t be contaminated by the toxicity of success, or that the spots of mediocrity we can discern here and there (and that were present when Steve was around) won’t metastasize into full blown “bozo cancer”. But for those interested in company cultures, the more interesting set of questions starts with how Apple will “Think Different” from now on. Jobs was adamant: His successors had to think for themselves, they were told to find their own true paths as opposed to aping his.
From a distance, it appears that Tim Cook isn’t at all trying to be Jobs 2.0. But to call his approach “legal/bureaucratic” (in the Weber sense), as Colony does, is facile and misplaced.
If we insist on charisma as a must for leading Apple, one ought to remember that there’s more than one type of charisma. There’s the magnetic leader whose personality exudes an energy that flows through the organization. And then there’s the “channeling” leader, the person who facilitates and directs the organization’s energy.
Is the magnetic personality the only valid leader for Apple?
[I won’t let the canards cited at the beginning go unmolested. See upcoming Monday Notes.]
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86 Comments
Also fed up with Wall Street analysts who claim the similarity of apple’s share price rise rise with Google’s initial rise and then say look what happened to Google afterwards.
Your charisma vs. golf analogy made me smile. Thank you for your clear thinking and caustic tone, as always
No. The Apple-Sony parallel is totally wrong. It should be Apple-Nintendo, or might be Apple-Enron? Anything goes up will eventually goes down, so these insights are so insightful that never fail. Every once in a while someone will fire up these shits to get the attention. Look! Another Titanic.
Sony allowed Samsung to copy it and undercut it at the same time.
Japan had currency advantage in the 80s which US worked
to remove it. In turn that blew the economic bubble.
Japan did dominate in console games (software) but American
are rue to give credit to them. Also Japanese car has enormous
control system (software) including engine management, etc.
Honda with Motorola was using it to make adjustments to its F1 cars
during the race. Asimo has software again control systems which the US
hasn’t been able to match same for robotics, blue laser, miniaturization, battery,
cnc machines, chip equipment, solar.
Problem is that they are not doing it in english so you don’t care.
Younger generation is too rich to be going into engineering.
Population decline and getting old.
So far, Apple has been able to not make the major mistake that Sony made – diversifying into various areas that were not a strength such as acquiring music and video content. When they made the decision on the iPhone, thus could have been a move that dragged down the company. As we all know, they were able to change the cellular handset model and leverage off AT&T’s willingness to take a risk on the iPhone.
Many pundits have critiqued Apple for not making “big bet” acquisitions for content or otherwise. The fact that they have the discipline not to do so, is to date (one of) their strengths. Apple has a laser focus and this is their strength. The other key strength of Apple is that it has reached out to non-US markets (like Microsoft and unlike Amazon) and been successful. The Kindle Fire has been successful, but in only one country (contrast to the iPad that has launched in dozens of countries where Apple has the iStore infrastructure to sell movies, music and applications)
The concern will always be for a new entrant that takes a new slant on the markets that Apple is in where it would react in a blinder manner like RIM did with respect to Apple and Android)
Maybe the correct conclusion to draw from the Sony experience is that Apple should turn into an investment bank with all that cash they have
It would make more sense, but still not a huge amount of sense, to compare Apple with Microsoft. It’s four years since Bill Gates retired. I’ll be interested to see how Apple fares four years after Steve Jobs died.
All those dire predictions about Apple boil down to one unintelligent argument: something this great can’t last forever. You can say that about the sun, you can say that about the Z particle, and be correct in both cases but convey no useful information at all.
The analogy for Apple won’t come from business, it will come from music or movies. Apple is like a band that loses its genius Producer and now has to make an album without him, Producing it themselves. “Producer” means different things in different fields. In music recording, the Producer is essentially the first listener. If they want to hear more cowbell, they get more cowbell. If the song is going on too long, they shorten it. They are like an audience member who gets to complain and gets their complaints heard before release, so that what the actual audience hears should cause fewer complaints. I always saw Jobs as basically customer #1. Somebody at Apple has to impress him first before it even got to a real customer. That is what music Producers do. They go “the song is great but the lyrics suck, go back and write a better set of lyrics that match the quality of the song.”
So the challenge for Apple is not “can they still write and play great songs?” — the band is still there, the songwriters and singers and musicians are all world class, proven. The challenge is to keep Producing at the same high standard that Jobs set. Distilling it all down to a single product that is more than the sum of its parts.
The thing is, as brilliant as he was, a lot of really brilliant people studied under him, and he left a lot of culture in place, including all of OS X. I wouldn’t bet against Apple. Especially not when all of their competitors haven’t even gone electric yet. Apple’s competitors have people in cubicles, one writing notes on a page, one writing lyrics on a page, one choosing instruments, and then they hire a bunch of random musicians, do the shortest possible sessions, and whatever they get out, they ship as Product X7J3500. Even if it just totally sucks, which it almost always will because they are simply using a bad process. Antique process. With too much left to chance or providence. Like Sony.
So Apple and Sony are opposites.
75% of Apple’s profits comes only from the iPhone.
Cheaper/better Android phones dominate and only Android grows worldwide, every other platform including iOS has a declining market share.
75% of Apple’s profits are under serious threat. It can be argued that the 10% of Apple profits from iPad and 10% from Mac are also very aggresively under direct threat by much cheaper/better Android tablets and even by imminent $199 ARM powered Chromebooks and even $249 ARM powered Windows 8 Laptops that have the same screen sizes/materials and 2x longer battery life than a Macbook.
@charbox
Your post has zero basis in fact. While android has been “exploding” so has Apple. Three years ago Apple had 50% of cell phone profits, then they had 60% and now Apple is taking over 70% of all cell phone profits, not just smart-phones.
The race-to-the-bottom-feeder Android phones are only hurting each other. Apple is getting ready to shift into second gear with the iPad already outgrowing the iPhone in the same time frame.
@ Hamranhansenhansen: Great metaphor. Jobs The Producer. Very apt.
@charbox.
You’re dreaming. I’ve tested rival tablets, nothing comes close to the iPad 2, let alone the new model. I can’t see anyone catching up this year – not unless they drop prices below cost.
@ Charbax: May I suggest a trip to The Verge? They have a set of slides from the Google/Oracle “misunderstanding”. One slide shows how much/little money Google makes per Android phone.
Also, look at the Strategy Analytics vs. IHS Supply controversy re. Samsung numbers. Great fun.
@Synth, the comparing of smartphone and dumb phone profits calculations are quite moronic. Of course smartphone makers can have larger profit margins than dumb phone makers. So it’s quite useless to compare.
The Android world sells more than 4x more devices per day than iPhone. Android grows much faster than iPhone and has been doing so for over 2 years now. That growth difference is only accelerating as soon as rich consumers on contracts get access to the pricing differences of cheaper and better Android choices. It basically makes no sense for a $400 Android phone to cost the same as a $650 iPhone when consumers buy the devices on contract. When all the rich consumers in Europe/USA pay $250 less for a high-end Android compared to an iPhone, that is when Android sells 20x more than iPhone.
It does not matter how much profits the Android industry makes today, tomorrow, next week. The point is that Apple iPhone profits are just about to be totally finished.
@ Bill Bennett: Right, that’s what AMZN does — because tablets isn’t their business.
Re. your MSFT vs. Apple comparison, good idea. MSFT has flatlined since 2000. Let’s see what AAPL does.
This said, one bad “new iPhone” and the noise will be deafening. If fixed in the next iteration, a great comeback story. If not, well, the decline has started. Fair.
@Jean-Louis Gassee, that anyone would take up Oracle’s Android numbers are truth on Android revenues/profits for Google is quite simply a big joke. For one, Google does not have to show courts/Oracle how much they make on Android nor what their strategy is for Android. But the strategy is quite obvious. Google makes over $5 Billion per year today on Android. The 500 million Android users generate upwards $50/year in average for Google in them all being addicted to Google search, gmail, google maps, and every other Google web service, not only on the smartphone also on the PC. And Google profits regardless which platforms for smartphones/tablets people use. Android’s function is to accelerate the adoption of smartphones/tablets, mission accomplished. Next year, Google is making $10 Billion/year thank to Android. That growth is extraordinary. For non Smartphone/Tablet users, Google makes in average less than $10/year in income mostly from basic search.
The Strategy Analytics vs. IHS Supply talk is ridiculous. Samsung has overtaken Apple in smartphone sales since the third quarter 2011. Samsung is far ahead of Apple. And that is just one Android maker. Add up all the other Android makers, add up the non-certified Chinese and other Android makers, Android is selling over 4 smartphones for every 1 iphone sold. That huge Android domination is only the very beginning.
@ Al: Right. In the critics’ defense, Apple always broke rules, ”common sense”, standards, good behavior…
@Bill Bennett, Android tablets daily worldwide sales have overtaken the iPad since a day in December 2011. I just returned from a trip to China, you can buy Android tablets that are better than iPad2, with the exact same LG-sourced 9.7″ IPS screen with faster-than-iPad2 dual-core RK3066 processors with Quad-core Mali-400 graphics for sub-$150 now. You can buy awesome 7″ capacitive Android ICS tablets for sub-$50 now. Android tablets have overtaken the iPad sales worldwide and that Android tablet growth is faster than Android smartphone growth from a year earlier. It’s just totally ridiculous to consider than those $50 7″ and sub-$150 dual-core 9.7″ and 10″ Android tablets aren’t going to totally dominate tablet sales by margins of 10/1 vs the iPad before the end of the year. And even all that considered, the iPad represents less than 10% of Apple’s current profit.
@ Charbax: Awright, awright. Let’s just have Samsung disclose its numbers the way everyone else does. Personally, I admire Samsung, a good example of what Sony failed to do. I dealt with them in a couple of past incarnations.
@ Antoine: Thanks for the kind words. It’s fun writing for this audience.
@charbax This is the bit I don’t agree with: “you can buy Android tablets that are better than iPad2″
Admittedly I haven’t seen any of the Android tablets to go on sale in the last six weeks or so, but the ones I have seen are universally dismal. Android is just awful on a tablet.
@ bonelyfish: And the stock market will collapse, another eartquake will hit Cupertino
@Jean-Louis Gassee, Samsung doesn’t have to disclose strategy, numbers of devices, profit margins etc, that is their secret. If they disclose those things then competitors can know what to do to compete and that takes away potentially other billions of dollars of profits and growth that Samsung’s secret strategies are aiming at. But there are plenty of reliable analysts who have numbers from sources such as carriers, retailers, consumers, etc, that prove Samsung’s global smartphone sales have overtaken Apple since Q3 2011. And again, that is only one Android phone maker. Bada and Windows Phone amounts to nothing at Samsung, so that number is only for Samsung’s Android domination. Sure enough, Samsung sells many skews, from super high-end Galaxy Nexus/Note/2/3 all the way down to Galaxy Y that sells below $100 unlocked in some markets. Samsung sells very aggressively their $100-150 Galaxy Y/Ace/R/Mini etc lines of entry level phones, but those come with 3.5″ capacitive screens so for most consumers, the experience is just like on a $650 iPhone.
@ ya but: Let me say at the outset, I’m a Japanophile, I took my family on vaction to Kyoto and Tokyo, I visited the Konosuke Matsushita museum, I love going to Akihabara and I’ll stop there. No, I had two Prius.
So, no disrespect for Japanese technolgy and engineers, au contraire.
To me, the sad thing is how the technology might of Kyocera, Sony, Matsushita, Toshiba, Tokyo Electrics and many, many others has been dissipated, unable to translate into world-dominating products/platforms/ecosystems.
@Bill Bennett, Android has been better than iOS on tablets since Honeycomb a year ago. iOS is only an upscaled smartphone UI put on a larger screen. iOS on iPad is still like Gingerbread on a tablet. ICS brings even better smoother hardware acceleration, check my video of the $62 7″ Android tablets coming from China, the smoothness of ICS on those tablets is amazing. Most consumers actually prefer 7″ tablets when they think about actually using the tablets outside the home. 7″ tablets fit inside most jacket pockets and purses. 9.7″ tablets mostly stay on the sofa in the home. A 7″ tablets have 2x to 3x larger screens than a phone yet they still can easily be carrier everywhere outside. That and the much lower price of 7″ form factor tablets is why 7″ tablets are likely to be the most popular tablet size globally by the end of this year.
@ Pierre Bourgeois: Ah… the ability to say no. And to refrain from big acquisitions that would kill the culture. Imagine Apple buying a carrier — as I jokingly suggested out of frustration with the stooges at AT&T.
I don’t have any firsthand knowledge of WHEN the rot started at Sony. I stayed with it even though I bought Beta rather than VHS and was stuck with it when they dropped it. But the one thing that really tipped me off was when they bought Columbia. This was something they knew absolutely nothing about, but this was supposed to get them “synergy.” In a pig’s eye it did. It just let the number crunchers understand it in their dubious Excel kind of way. Life doesn’t work like a spreadsheet.
@ Charbax: Quoting you: “iOS is only an upscaled smartphone UI put on a larger screen.” That’s what Eric Scmidt said in January 2010 when he called the iPad a bigger iPod Touch. I must respect your view but, really, have you asked Android and iOS developers if a tablet is just a smartphone with a bigger screen? More isn’t always more, there are times when more becomes different.
In any event, allow me to remind you this Monday Note is about the Phony Sony Parallel. Do you have toughts on this?
@ David Emery: You have no idea… Actually, you do: Wall Street deep thinkers have lots of ideas for Apple’s cash. How about taking Bing off Microsoft’s bleeding hands? Buying ARM. Or Google?
@Jean-Louis Gassee, the EU/UK is never going to allow the evil Apple to buy ARM, and ARM has hundreds of licencing agreements that forbid them from selling themselves off to a monopolist that would suddenly invalidate all those licencing agreements.
Apple’s cash is likely going to go at buying Facebook, which is only a worthless php script for social networking, and that will accelerate Apple’s demise.
@ Jim H: Ah… Let’s bow to the altars of Synergy and Leverage. Let’s note Matsushita also got into Hollywood. So did France’s Vivendi. All taken to the cleaners by Hollywood lawyers.
Charbax: “For one, Google does not have to show courts/Oracle how much they make on Android …”
Just like with other points, you are wrong. Pray tell, please, how lying to a court about the income a contested product is generating, is legal? If Google lies about Android’s numbers in court, they are going to have more than Oracle to defend against.
@Samo, Google’s direct Android profits in 2010 is what the courts demand, they are in no way required to explain the overall Android revenue/profit strategy to the courts nor to Oracle. Those papers are about an out-of-court settlement to be about 100 times lower than what Oracle had hoped as they overpaid $7 Billion for Sun Microsystems with the only hope of milking the Android cow, mission failed.
What’s about Johnny Ive? As far as I know is he now untouchable and has all veto against all products which leaves apple. Is he now the producer?
I think Johnny Ive is the right guy in most cases (except strategic decisions), especially to choose when the song is ready to publish.
I think that’s overall the reason why jobs hired all of his vice presidents. The are all better than Jobs in her specific discipline – after all Jobs got the intuition what’s the right way. His fear that a product won’t succeed makes him such a perfectionist.
In my opinion, a CEO always must the first customer of his products, because he is ablosute and finally the DRI of a product rollout. That’s the reason why Jobs fired all those Vice Presidents when they make really big faults (i.e. MobileMe), because he could only control people who building his vision that “technology has to disappear”. Who as a customer is really interested in technology. I don’t know anyone.
I think Johnny Ive can’t fire anyone. That’s now the job of Tim Cook. But I think the internal CEO as I describe him above is finally Johnny Ive. They just split the responsibility, that Ive can concentrate only on products, because that’s what he is strong in.
I really don’t think that Apple will fail, as long this constellation won’t break. If Ive finally would leave the company after the Jobs era, we can talk about what’s next to Apple. Today not.
@Charbax, I took a look at your site and I’m so happy you got to take a trip to China and get to brag about it to all of us in the hope that we will be impressed. (Sorry, didn’t happen.) The trash products you show in your videos are in no way superior to anything made by Apple (or Samsung or even Sony). I expect to see some of them for sale in the 99-cent store sometime soon. You are clearly delusional or just have an ax to grind. You brag about that ICS phone but in the video they can’t even get it to install Google Play. The ICS tablet with a resistive screen? Give me a break!
Since I appreciate what you wrote, I would like to take the time to defend Weber who was, unjustly, caught in the line of fire. The three models, legal, traditional, charismatic, are ideal-types. They are meant to be abstract models that have to be adjusted to historical realities. What a dictator and Jobs would have in common, in Weber’s account, is not a style of ruling, but a source of legitimation. Why do we obey? Not because it’s the law or the tradition, but because we have faith in this guy. Charismatic leaders are, in Weber’s, founders and revolutionaries. Moses and Bill Gates, not Ballmer and Cooks. Again, I agree with most of what your write, but as a Weber scholar I would rather see the poor guy left alone…
@Jean-Louis Gassee your patience with chatterboxes is amazing. You must be a wonderful parent! Love Monday Notes’ laterozontal thinking. Thanks.
@everyone
I’ve seen Charbax trolling for Jesus, I mean, Linux, for more than a dozen years. His mind is about as impenetrable as a steel ball bearing. Props for consistency and longevity, I guess.
Colony missed the boat in comparing Apple to Sony. He could have been a lot more provocative and compared Apple to The Third Reich.
@ Manuel: Thanks. No disrespect for Max Weber, a towering intellect, very Mitteleuropa, a meliorative term in my book. What struck me re today’s organizations is a) the connectivity and b) the occasional inversion in the power structure, i.e. an engineer having more power, respect and, in several companies I know, more money then his manager/servant. That’s why I refer to Deleuze and Guattari’s rhizome theory. See their unfortunately unreadable A Thousand Plateaus http://j.mp/J3QZfb
@ JJ: Our children are the really patient ones
@Nokuchikushi Tekukuno, try http://armdevices.net/2012/04/10/63-7-capacitive-boxchip-a10-tablet/
That $63 ICS 7″ capacitive tablet (Shenzhen street price, factory price is sub-$50) is better than ipad by software, size, weight, microsd slot, hdmi output, usb host, video codecs supported, no jailbreak needed for apps/games piracy, jacket pocketable and yeah, its $63 retail now, quickly $49 in every supermarket. And you’d be wrong ro guess ICS not being smooth on this $63 tablet, ICS is fully hardware accelerate by the Mali400 GPU, same thats on the samsung highend phones and tablets.
Sony’s biggest problem is that their ownership of recording and movie studios forced them to back copy protection (DRM) at precisely the wrong time in history. All their technological wizardry was subverted to the need for control …
@ Jens Krahe: Yes, there’s Jony Ive — who was already at Apple when Dear Leader came back. There’s also Scott Forestall, who joined NeXT out of college, runs iOS and is very, very determined — and capable.
@ le Moende: Yes, Sony’s fixation on DRM got it to miss the opportunity to do an iTines before Apple.
@Charbox, the only tablet better than the iPad 2, is the iPad 3 (aka New iPad). Everything else…is s**t.
The only platform capable enough to take on iOS hasn’t even been officially released yet and that’s Windows 8.
What I find interesting in general s that a large number of people in the tech media who severely criticized Jobs when he was alive, calling him a dictator, tyrant and so on – even suggesting at many points in time that Apple dump him – are NOW singing his praises after his passing. Disgusting, actually.
‘[I won’t let the canards cited at the beginning go unmolested. See upcoming Monday Notes.]‘
-I will stand in a Line to read Jean-Louis Gassée’s Blog !!
Adding on, there is great continuity in the business of OS, like how Dear Leader once said, ” the iPhone is nothing but an operating system”.
That continuity/engrained culture is going help Apple,MS,Goog stand the test of time.
@Charbax: Your definition of “better” doesn’t fit with any other definition I’ve ever heard. Even assuming that the raw component specs of these new tablets out-perform the iPad (may be true, but largely meaningless), the design and build quality is/will be poor, the relative merit of ICS is debateable at best (from what I’ve seen it’s much better than Honeycomb but still not on par with iOS 5) and the ecosystem is a rapidly deteriorating swamp of knockoff apps and malware, with a wealth of empirical data to show that developers don’t make anything like as much money from Android as they do from iOS – activation numbers be damned – and if they want to hit all of that installed user base you crow about, then they have a heck of a lot more work to do dealing with handset and OS fragmentation than their iOS-programming counterparts.
Where is the “better”?
Given the dismal showing of ICS so far, the thing that should be worrying Google most is the idea that Android is now being forked by the whole world and its Mother, and that the tablets getting all the marketshare (Kindle Fire) will make no use (and therefore provide no revenue from) of any Google services.
This was an emotional piece for you. It seemed like you were gathering facts to support an emotional belief. Apple has never been successful without Steve Jobs. And what we have learned from scenarios is that they are always wrong. So your scenario about Apple continuing its hitting streak sounds like a hope for the dream to continue.
Apple is focused on a few products. All it takes is one screw up, or a technological disruption and who knows how apple will respond without Jobs. Mobile devices are useful for a little more than a year, so who knows where the road will lead us in the next five years. Yes apple will be still around. But five years almost killed Nokia and RIM and Sony.
The real story is whether apple will be able to create the next product after the iphone, just as it created the iphone after the ipod. The ipad is an n+1 product. the iphone was a 0-1 product. Apple will need another 0-1 product over the next five years and this is where Jobs excelled.
Who at apple has ever created products that were hits like the original apple computer, the mac and the iphone? That’s right, no one comes to mind.
Do you really think that Tim Cook will lead the creation of the next great thing? And who will be able to convince the carriers and media companies and anyone else to go along with Apple’s strategy. Tim Cook? Why should they listen to him?
OMG, such a long line of Comments, with Charbax surprisingly *not* asserting that ARCHOS will bury Apple(!).
>>>exploitative sects come to mind
Have you forgotten the posts about Apple’s “leak police”? I don’t know how many other companies do that but it seemed extreme to me.
As for Sony, it did once have a soul: This Was Sony http://mikecanex.wordpress.com/2012/03/27/this-was-sony/
Great post…a much more accurate analysis for Mr. Colony would be HP = Sony. But we all probably wouldn’t be reading that one.
One of the reasons why other people are sad that Steve Jobs died is because a phenomenon like Apple will go downhill and it did. Google’s Android just might take the lead sooner than we know it.
@Sallie: “Apple will go downhill and it did”
The lack of imagination displayed by people who can only see things in terms of “what happened before must happen again” is truly astounding.
Charbax has it right. Apple cannot compete with ubiquity or it becomes something other than a Steve Jobs company. That 75% of profits come from iPhone is deadly. Google can afford to stumble here. Apple cannot.
@charbox – How many consumers know what an ICS screen is? How many care?
It is the eco-syste silly! iPad has it, NO ONE else comes close. You droid-heads are always spouting specs, yet your devices never really live up to the hype, because your software stack isn’t consumer friendly.
Apple-Haters, Geeks and Pirates, thats the target market for Android, they just didn’t intend for it to wash out that way. Don’t even get me started on what letting the carriers have their evil ways with the software has done for your “platform”. One word comes to mind: PAIN..
Choosing your market is critical. Market to IT departments or carriers and you cannot afford the time or the money to focus on the little details that make for a great user experience. Market to end users and you’d better be good at those details.
For Apple to fail they need to stop focusing on the end user and at the same time one or more of their competitors must begin to focus on the end user. Neither is likely. Apple doesn’t focus its sales efforts on IT departments or carriers because it knows that’s a road to little differentiation and low margins.
Apple’s competitors on the other hand almost all use some one else’s software so they can’t differentiate and must rely on carriers or IT departments for low profit sales. Sure, Microsoft could come out with their own Windows phone but that would alienate Nokia and the rest so that’s unlikely. That leaves Google, but they’ve got the same problem. Neither can afford to bite the hands that feed them.
Charbax. You do realise that your posts are just noise in this comments thread, right?
Everyone else. Thank you for the insightful and polite comments. These days it is a rare pleasure to read a comments thread that enhances an already good article.
Congratulations of demolishing that strawman — Apple is indeed not doomed.
@Ian Davies, Angry Birds generates more than 2x more money being a free app on Android than being a paid app on iOS. The argument that Android generates less revenue/profit for developers is false.
Android is not being forked. The Kindle Fire is an exact copy of Gingerbread (because that was the newest version of Android for tablets available to Amazon while they were developing the Kindle Fire). The only difference is in the Home Replacement that Amazon installed on top. That is not forking Android, that is extending Android functionality and reach which is exactly what Android has been designed for. Also, more than 99% of all Android apps (there are I think close to 1 million apps by now), 99% of all Android apps work on 99% of all Android devices on the market. Unlike Siri that does not work on old iPhones and iPads, the only Android app that is not backwards compatible is Chrome for Android, that is because Google has released it as a Beta. By the time it comes out of Beta, more than 90% of the Android devices sold in 2011 and since the second half of 2010 will be fully upgradable to ICS. More than 90% of the now released and upcoming Android devices shown at conferences since CES, all are running ICS as shown at trade shows.
Android is the most genius open source project ever, Google designed it for absolute backwards and forwards compatibility. People can fork Android if they want, but NOBODY forks Android, simply because it makes no sense. Manufacturers can customize the Home Replacements and add a few proprietary apps on top if they want, that is all the customization most makers may need. I’d argue they shouldn’t even touch the UI and simply use default Android UI and focus on competing on hardware instead of changing the appearance of the Android UI and to try to use that as a differentiation, but that is up to the makers and Google does not need to influence the way that happens.
Shorter Charbax: Black is white. Up is down. I am as high as a kite. Woooooo…
@mike h, 99% of the million Android apps work perfectly fine on Android tablets. The reason being Android, since 2008, has been designed to scale onto any screen size, onto any screen resolution, any screen aspect ratio. Android’s ecosystem is gigantic, it includes over 2000 companies full R&D staff, it includes all the worlds carriers, all the worlds app developers, Android’s ecosystem includes devices in every size, every shape, made by every manufacturer in the world. Apple’s “ecosystem” is limited to one company, one store, one monopolistic carrier per country, one size for the phone and only one size for tablet. Android’s ecosystem is much much larger and stronger and the divide is only widening.
Charbax,
You’re just making stuff up. Give it a rest.
Charbax, give it a break! Last time I looked ALL major carriers In Denmark stock the iPhone plus many retailers selling unsubsidised models. There are hundreds of retailers selling the iPad.
Show me one single piece of data that android tablets have outsold the iPad globally! You cannot!
Totally agree with this article – Steve Jobs’ last product is Apple itself. Will you bet against him?
I think it’s interesting that the entire executive team at Apple now has something to prove to the world – the laser focus that got Apple where it was isn’t going to dilute any time soon.
Apple’s too-high iPhone margins are a powerful weapon. At any time, Apple can reduce these margins to a point where nobody would be able to compete with the iPhone price-wise, just like they’ve done with the iPad. So far they have not needed to do that. “Can they keep up these margins” is a less interesting question than “can they keep dominating” – their margins provide them with a lot of leeway in the latter.
Imagine Apple would cut their margins on the iPhone to 10%. Now suddenly any even halfway decent Android phone would cost $100 more than the iPhone… can you imagine the effect on sales? They’d wipe out all the high end Android phones in one fell swoop…
Heh, I think it’s hilarious how quickly people dismiss Tim Cook, just because he’s relatively unknown to the world outside Apple. From all we know he’s a sharp guy, and I believe more likely to grow into a great leader in the public’s eye (he already is in practical terms) than to fumble like Fiorina, Apotheker & Co did. Remember, he wasn’t brought in as a star CEO, he actually played a significant role during Apple’s turnaround. I wish more companies stuck with homegrown talent.
@RobDK, all Danish carriers have cheaper/better Android choices against the iPhone. For example you can buy the Galaxy Nexus out of contract for 2250dkk ($400) while the iPhone 4S costs a minimum of 4500dkk ($800) on 6-month contract. With that choice, only crazy people still want an iPhone in Denmark.
And for your proof that Android tablets have overtaken iPad in terms of daily activations, just look at the official numbers of Kindle Fire vs iPad for the Q4 2011, and then remember that Kindle Fire was only available since November 15th 2011 and only available in the USA. It’s quite simply a piece of cake to make the calculation that Android tablet daily worldwide sales have overtaken the iPad since a day in December 2011.
@charbax.
Listen chum.
Stop writing your vitriol here.
Instead, use the vast amounts of time saved to get a second job.
Save your earnings.
Buy an iPhone.
Buy an iPad.
Discover ‘joy and delight’.
Be happy.
But, just in case, never again stop taking your meds.
There’s a good chum.
Hey, Charbax! This is what you wrote:
“Apple’s “ecosystem” is limited to one company, one store, one monopolistic carrier per country”
That is a complete lie, as I have proved to you regarding Denmark!
Given that iPhone is vastly more popular than nexus, as any 5 minute trip on the Copenhagen Metro shows, you need to realize people want easy to use smartphones without the android carrier bloatware, viruses and trojans that steal private data…
You still have not provided data of Android tablets overtaking the iPad! Also, Google does not register Fire activations as Android activations since Google apps are not activated on the device.
@RobDK, Android has by far a larger market share even in Denmark. You only recognize the Apple stuff because you don’t count that every other phone on the Copenhagen subway are running Android. Apple has been using carrier exclusivity wherever they legally could. Denmark and France for example has regulation that forbids it, but everywhere else, that has been Apple’s business model, monopolistic behavior is Apple’s strategy number one.
Guys! Guys! (and Gals): Don’t feed the troll! Seriously! As has been suggested, take that to The Verge comments section.
What really screwed Sony over? Trying to protect thier movie and music businesses by handicapping thier hardware (core) business, and this started with the betamax, no record function, except on professional grade (and the quality difference b/t beta and VHS is unbelievable, have one my parents purchased in 83, only have a few videos that play on it, (still works fine, things were built different, could also hook up to old school satelite(sp) dishes and it would descramble, never paid to watch a tyson fight). And this continued with every technology Sony developed until Blu-Ray, and if I had to make a guess that had as much to do with every companie’s memories of doing business with MS in the 90′s and first part of 00′s. Samsung, Apple (I believe) is thier biggest customer and biggest rival. But that works fine for samsung, I’m sure apple realized they weren’t going to get everything.
To the Samsung-is-what-Sony-should-have-been folks, you are missing a bit of history. It’s okay, you don’t live in Korea. Not even the Japanese, with their proximity to Korea, know about Samsung. Wikipedia does to some extent.
They started as a grocery and import company. They’ve done the life insurance thing, the car thing, the pirate DVD thing. They are far more spread out than Sony ever will be an in terms of overall revenue, remain the largest non-nation entity on the earth.
Of course their electronics division is dwarfed by Apple, but then again, electronics wasn’t their thing to begin with.
The point is that there is no large organisation with Apple’s focus. Not its standards. P
LOL about Henry Blodget (the nervous and neurotic Wall St. guy who got booted from the street by the one and only Elliot Spitzer who himself got the boot, this is a script that could be written for a Batman / Gotham City movie).
@charbax
Please make sure to save arguments until when Apple is at $300m revenue run rate. They will be just as applicable.
Its not right to believe that if A met certain future then B will surely met the same future if they we in same circumstances. A is A with different People and B is B with totally different People. People in both A & B have different aspirations and different levels of intelligence..and so on…
Going back to the basics (Weber), the problem is that neither traditional nor legalistic/bureaucratic organizations can support double-digit growth (even higher single digits are a pain).
Eventhough I’m a fan of much of Weber’s writing (and thought), I have to note that Weber, much like everyone, is a child of his times. His analysis is in many ways an accurate description of the organizations he saw around himself, but the attempt to adapt Weber’s classification on today’s world is akin to planning a moon rocket using pre-Copernican astronomy.
I just go the new Ipad, and I have to say its a
big improvement from the 2nd generation. New retina display and five
megapixel camera.
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