The context of this story

Year: 2011
Products: iPhone, iPad, Mac OS X

Apple and the mobile revolution

Apple sold more devices with the iOS mobile operating system in 2011 than it did in twenty-eight years of selling computers: the annual iOS sales versus the entire generation of Mac sales is 156 million versus 122 million. The segment of tablet and mobile phone sales with iOS is crushing sales of computers with Mac OS X (now just OS X). And Mac sales are growing rapidly—while the segment of classic PC sales saw a percentage decline in the 2011 Christmas market, Mac sales grew by twenty percent.

Image: cumulative_sales

The Asymco chart shows the cumulative sales of Apple devices, giving us a better idea of the dynamics of each device class. It took Apple 26 years to sell 100 million Macs, while it took only four years to sell 100 million iPhones, and it seems that it will take less than three years to sell 100 million iPads, as 55 million of these Apple tablets were sold in 2011.

But that also means that the impact of both mobile devices is significantly greater than that of Macs, if we disregard the speculative and suggestive question of whether Windows would have been born without Mac OS. While Mac sales are mostly upgrades, iOS device sales are still mainly to first-time owners or users who are replacing a previous version that they continue to use in the family: the “dad bought a new tablet, the kids got the old one” model. There is no longer such demand in households for a twenty-year-old Mac.

The number of users of mobile versions of Apple devices is therefore estimated to be at least five times higher than the number of current Apple computer users. The dynamics of iOS software development are significantly higher, and although it is true that initially only companies with some experience with Apple software, and mostly those that developed it, ventured into mobile software development for the iPhone, in recent years there has been a proliferation of companies that have never created for the Apple platform and are encountering it for the first time with iOS. There are no “large” versions of their products either.

Apple is well aware of this, just as it was aware with the iPod that for many users, this device would be their first encounter with the Apple world. Today, for most users, the iPhone or iPad is their first encounter with the Apple world.

Apple is responding to this situation with a new version of its OS X 10.8 Mountain Lion operating system. While iOS version 5 was similar to the OS X 10.7 Lion operating system, the new version of the major system is moving towards unifying both worlds. This is so that the transition from one to the other is not painful for users. Only the controls differ, and only to the extent that makes sense and is determined by the different capabilities and dimensions of individual devices. The mere fact that iCal is being renamed Calendar gives users a sense of consistency. People will get used to the similarity and will take advantage of the fact that the settings of the desktop and mobile versions can be synchronized via iCloud, allowing them to start the program on different devices where they left off elsewhere. Their digital identity will follow them across all Apple devices, rather than, as we are used to today, having to search for their digital identity on the computer where they created it or transfer it with great effort. For old-timers, I would compare it to the transition from ICQ, which was unable to save contacts to a server, to a version that can do this.

It may seem obvious to you, but even in this vision, Apple is a lone pioneer, and other industry giants, with the honorable exception of Google, think only the ugliest things about it. Take Adobe and its Air, for example. The company is trying to promote the idea that the program looks the same on all platforms and has a uniform Adobe Air interface, whether you run it on Windows, Mac, or an Android tablet. The same goes for Microsoft and its Metro environment in the new Windows 8. Squares, tiles that unify the world of Windows Phone 7 mobile phones with the world of desktop and tablet Windows. A bold vision of a clichéd world from which there is no escape.

Apple, on the other hand, argues (and I believe correctly and wisely) that users want an interface tailored to a specific device. Just as it would be difficult to hit the cross in the upper left corner of a tablet, which is used to close windows on OS X, it is unnecessary to abandon this element in a large display environment where a mouse is used. On the other hand, if Apple really does offer some kind of i-TV, it would be better to avoid unreliable remote controls for most of the more sophisticated functions and rely instead on (well-tuned) voice control, which you can command with “Write to Markéta: Let’s meet tomorrow at nine.” This also implies that separating the Cocoa and Cocoa Touch presentation layers for individual platforms (desktop and mobile) is a temporary solution.

Whose approach will prove to be better in the long run remains to be seen, but experience also teaches us that it is not necessarily the better one that wins, but the one whose interests are better promoted commercially. In terms of business approach, Apple has long been at a disadvantage, but in recent years it is Microsoft that has been playing catch-up, hoping that the revolution of its Windows 8 will be enough to make users rush to upgrade their computers and throw away their iPads en masse in favor of Windows 8 tablets.

For a long time, Apple’s pricing policy was a noticeable disadvantage. Apple was simply a premium product, and the price was supposed to convince users of this. And this was not only true on the Czech market; even in the US, computers with Mac OS X were for a long time above the average price of Windows.

But then the situation began to change. Apple changed its strategy. It produced so many mobile devices that it could afford to contract such huge purchases that it practically bought up the entire available commodity. It sounds ridiculous to us how it is possible to buy up a commodity in global capitalism, but building a new factory for super-fast flash memory takes more than a year, even if you have the money, and that is the essence of Apple’s strategy. It buys in advance, buys in large quantities, and is willing to invest in exclusivity. It innovates so quickly that imitators can’t keep up with copying, let alone copying its prices, because similar parts are simply not available on the market, either in the necessary quantities or at the necessary prices. Apple has bought them out, and it will take a year to build another factory. We have demonstrated this with touchscreens, but we could continue. For example, the “unibody” bodies of today’s Apple devices are made from aluminum using a special process. Mastering this process for the production of huge quantities of parts is extremely demanding, both organizationally and financially. As recently as 2012, many manufacturers of “ultrabooks” – devices copying the cute “Airbooks” (Macbook Air) – had trouble finding enough aluminum and the capacity to process it for bodies that were even remotely similar in design. Four years have passed since Apple introduced its unibody design, yet competitors still have to resort to riveting, plastic accessories, such as bottom cases, etc. As a countermeasure, other ultrabook manufacturers tried to use fiberglass shells as an exclusive material, but at the expense of their customers, they verified the unsuitability of this solution.

What is the result? Today, Apple products are considered premium because, for the same or sometimes even lower price, they offer better design and technology that competitors do not yet have or cannot offer. That’s why it’s so difficult for ultrabook manufacturers to compete with the Air: for the same, often higher price, they can offer a rather inferior product that doesn’t have such a “sexy” brand name. The situation is similar with tablets. When the new Motorola Xoom with Android 3 came on the market, everyone liked it very much, and commentators were optimistic that it would give the iPad a run for its money. Nothing of the sort happened, not so much because of Android’s shortcomings and lower user satisfaction, but mainly because of the price. Why would you buy a worse “copy” at a higher price?

The premium feature of Apple products today is technology that others do not yet have. Not the price. And that is something that is very difficult to compete with and is backed by decades of logistics improvements, enormous financial resources and company operability, and the immediate ability to innovate.

In fact, the only company that manages to keep up with Apple in this regard is Samsung, but for a simple reason that others cannot easily replicate. Samsung manufactures a range of components and technologies; it is not just a purchaser of assembled parts, like most others (including Apple). In addition, Apple also buys a number of components (such as displays) from Samsung, so Samsung knows in advance what is coming and can prepare. This is what Apple resents: how Samsung copies it completely and shamelessly.

It also follows from the above that there are very few companies today that are able to compete with Apple. Microsoft has missed its chance and will not be able to make up for its five-year delay even with all its resources; only its partnership with Nokia and fierce patent pressure give it some chance.

Google is currently the only real alternative. It has its own mobile operating system and a range of basic technologies that users want: search, video, maps, and more. Until now, it did not own a hardware manufacturer, which proved to be a weakness that outweighed the advantages, as it had no way to respond in the patent war, nor could it ensure an optimal user experience with fine-tuned hardware. That is changing, not only through Motorola, but also through Chromebooks, for example.

Apple has definitively changed and connected two industries that had been separate until now, even though their connection had been predicted: telecommunications and IT. It has succeeded in doing what no other smartphone manufacturer before it, not even Nokia, has managed to do: consciously become an absolutely normal part of people’s lives. First through the iPhone and then, on the other hand, through the iPad.

It was Apple that made an indelible mark on the history of the mobile revolution. And it showed us one more thing we should be aware of. Revolutions move in leaps and bounds and devour their own children. Just as there was no one in sight in 2006 who could compete with the unchallenged leader of the sleepy market, Finland’s Nokia, another breakthrough may come that will once again fundamentally change the market. But even breakthroughs have their own laws: Apple came up with a fundamental and more natural change in control. What will be the next fundamental change? Mind connection? Morphism – changing the shape of devices? Holography? How far are we from such technical breakthroughs? As far as Apple was from the multitouch display in 2006? No company grows to the sky – not even Apple.

In conclusion, or what was missing from the book and we know about it

Writing a book about Apple’s “modern” history was truly a bold undertaking. Even after reading many pages of text, I cannot shake the impression that much of what is essential has not been said and much that is important is still waiting to be evaluated. I will try to be fair and remember that.

In our discussion, we focused almost exclusively on mobile history. Apart from our initial introduction to the iMac, we omitted all further developments in Apple desktop and laptop computers, which is, of course, a shame, but it was not so important for the story of the mobile revolution, although the Macbook Air deserved more mention, as it is a device that straddles the line between a tablet and a laptop.

We completely overlooked the transition from PowerPC to Intel processors, which was a betrayal for true Mac fans, but for the market and potential customers, it was Apple’s opening to the world. The gigahertz gap was too obvious, difficult to justify, and Intel’s technological lead in desktop processors could no longer be ignored.

We also dismissed the development of the Mac OS X operating system. And there would be a lot to talk about. But it’s no surprise, because when I counted how many operating systems Apple has ever developed, offered, operated, or planned, I came up with two dozen. But why should we talk about the Star Trek project, even though it was a technologically interesting attempt to port the original Mac OS to the x86 processor platform, on which Apple cooperated with Novell? We could also talk about Taligent, MkLinux, or Pippin, even though their influence on the future was practically zero and they were dead ends on various paths and considerations. We have already discussed the most important aspects of the foundations of Mac OS X and iOS: in the beginning, there was Jobs’ NeXT and its technology, which Apple bought and still uses today, and its open source underlying layer is called Darwin.

Worse still, there wasn’t enough space left to discuss the Apple Store phenomenon, the company’s stores that became the first point of contact for users with Apple technology, an almost mystical place of initiation. What is particularly interesting about them is that they have become a profitable part of Apple, despite the initial skepticism of many competitors, who, on the contrary, closed their brand stores because they were losing money on them. Jobs managed to find people who turned the Apple Store into a meeting place for users and Apple, thus creating a brilliantly functioning marketing channel. For us in Czechia, this is difficult to understand, as we do not have a real Apple Store here, although some Apple retailers, especially in Prague, are trying to come up with a similar concept of a place where training sessions and user interviews take place and where you can consult with experts and get acquainted with the latest devices. If you travel to places where there is a real Apple Store, don’t miss out on visiting it; it will give you more than many pages of text and replace an unnecessary chapter. The functioning Apple Store network is now the main reason why Apple practically no longer participates in IT and telecommunications trade fairs. It does not want to focus its main message and products on when a trade fair is important, but on when the product is ready and fine-tuned. It even has the audacity to ignore the MWC trade fair in Barcelona, the largest gathering of telecommunications companies from around the world, but it still can’t resist sending its hostesses there from time to time to inform interested parties that anything worth seeing from the world of telecommunications and IT is not at the trade fair, but at the Centro comercial La Maquinista, where the Barcelona Apple Store is located.

I omitted Apple’s efforts to get Macs more involved in the gaming community and the development of most software for Macs, including the iWork and iLife suites and a number of other things that really didn’t have room.

However, we have demonstrated many important and essential points. We know that Apple learned to understand its own mistakes and weaknesses and that it had no tolerance for its own errors. We noticed that it learned to overcome them with quick, albeit painful, cuts. We see that Jobs learned to buy companies solely to utilize their teams. We know that he knew how to test the market and, based on the results of the test, quickly capitalize on areas that promised abundance. He was neither clairvoyant nor a genius, but he knew how to quickly orient himself, did not listen to players making excuses, and made decisions quickly, on his own. Apple learned to allocate huge resources and use them to buy access to exclusive technologies or processes that others did not have, which became its premium advantage. This made it less susceptible to price competition, which benefited it financially and gave it even more resources to further exploit the market.

We have shown the circle that Apple has managed to close with this approach.

I have saved a few topics for last, which ultimately merge into one: what is the working environment like at Apple, what is the future of Apple without Steve Jobs, and what is my personal opinion about the reasons for Apple’s success. Yes, these three things are ultimately one and the same.

Steve Jobs is said to be a terrible employer. He is aggressive and self-centered enough to make it difficult to work with him. So how is it possible that Apple employees put up with him?

The answer is interesting. Jobs has a habit of hiring only two types of employees: greenhorns who have “something special” and the best people in the field. We have seen many cases where he bought a company not because he was interested in the product, but because of the people behind the product, whom he then used to create the product he wanted. Over time, I renamed this theory (which I never discussed with Jobs) the theory of hiring A and C people. Jobs didn’t want B people. He never wanted Bs. He wanted to hire young and foolish, as he used to say, eager people. Over time, they either proved themselves and became his As, or they didn’t prove themselves and became routine workers who only went to work to pay off their mortgages. Jobs hated and didn’t need exactly those kinds of people. And it was precisely those people who found it very difficult to stay with him—and for a very short time. They were average, and average people couldn’t keep up with him intellectually. Jobs always had a problem with average, and average was something he tried to avoid. He always believed that it was better to pay a poorly performing beginner who was learning but didn’t cost much and was eager to prove himself, or an expensive professional who was one of the best in the field, but nothing in between.

This strategy was the reason why Jobs’ Apple was able to achieve so much, so many top-level products at once. And the reason why he didn’t hesitate to pay hundreds of millions of dollars to acquire a company whose team caught his eye. That’s why he was able to put a number of projects on hold for a very long time and only occasionally reignite efforts that were going off track with his famous bursts of passion. Although he was a perfectionist obsessed with the smallest details, he gathered great people around him who brought him finished products and actually left him little room to maneuver. We also showed how his colleagues learned to work with him and often manipulate him.

This brings us directly to my belief about what lies behind the success of Apple and Steve Jobs. I have read almost every book and numerous articles on this topic. There are many who would like to repeat Steve Jobs’ success, and many others who would gladly write a book for them. If you’ve read this far in the hope of learning how to be like Steve Jobs, I have bad news for you. You are not Steve Jobs.

The secret was not in perfect marketing, nor in a perfect product, nor in an obsession with detail or a well-thought-out vision that he never compromised on. It was not in the enormous resources that he managed to accumulate or in well-developed and mastered logistics. Nor was it in Apple’s concentrated management style. The secret is in everything at once. It was not about one single thing, but about a huge collection of things that Jobs managed to build over three decades in the computer industry. In the path of glory he walked at Apple, then in the path of humility and failure he walked at NeXT, finding himself at Pixar and being reborn in his return to Apple. The Jobs of 2005 is not the same Jobs who left Apple in disgrace in 1985. Many would not even recognize him in photos, let alone in his ability to run Apple.

Jobs’ obsession with detail was such that he was obsessed with every detail of every part of his work. And it was only because he managed to gather around him the people, technology, and resources that allowed him to focus on the key issues while at the same time flitting like a divine wind through all departments and all products that Apple became what it was after 1997. Creative, inspiring, driven forward by vision and energy.

What will Apple be like after Steve Jobs’ death? The same for many years to come. The people Jobs brought in and appointed to their positions, who shared his enthusiasm, energy, and vision, are still working there and still share his “altered reality.” They continue to create and change it. The force field, the think tank that was behind the creation of products such as the iPod, iPhone, and iPad, is still active and will remain so for many years to come. If the company manages to maintain this ethos, it will be able to draw inspiration from it for many years to come and attract more “A-list” people, more sources of energy and inspiration. It is a delicate balance that other companies will try to disrupt, envy, and replicate.

And that is my answer.

Stay hungry, too.

Stay hungry.

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