Death To Jobs?

No, I’m not talking about the recession.  I’m talking about the mortality of the iCon of Apple.  Update: Part 3 finally completed, plus a little announcement.  

 
Introduction

Gizmodo has an article citing an unnamed but hitherto reliable Apple source saying that Mr. Jobs is very ill.  How ill?  The report lacks specific detail, it can be read to indicate early retirement, or it can be read to indicate Mr. Jobs will soon be headed to the Big OS in the Sky.

What to think?  Given the lack of detail, you can’t say it’s true with any degree of certainty.  He’s obviously lost a lot of weight, but that could well be due to fairly normal (and not normally deadly) consequences stemming from the surgery he had for pancreatic cancer.  This could just be someone taking a look at the gaunt guy and deciding, “He must be a goner,” then passing it on.  On the other hand, Apple does have a track record of obfuscating this issue (and many others), so it’s also easy to imagine someone inside the Apple “culture of secrecy” coming to such conclusions a bit easier.  

If you put a gun to my head and said “Make the call,” I’d say he’s not dying, but you really would have to put the gun to my head for me to make the call. 

That being said, while I don’t wish ill on anyone, I think in some ways that the world and even Apple would be better off Jobs-less.

No man should be indispensible to a company or cause simply because in the unlikely event that he really is (as opposed to thinking he is), when the man dies, so does the company or cause.  Really, if Jobs’ death kills Apple, what does that say about Apple?   Wouldn’t it say that Apple just a house of cards glued together with Jobs’ salesmanship/BS? 

This notion that Jobs = Apple is unusual and unnatural, even in companies with similar situations.  Of course, it’s great to have a great leader, and such leaders leave their mark on their companies for a long time, but they don’t generate personality cults, at least not outside the company.  Did Grove = Intel?  Did Sanders = AMD?  Did Gates = Microsoft?  Did Walmart = Sam Walmart?  Did these companies collapse when their founders left?  Uhhh, no.  For that matter, Jobs did not equal Apple for twelve years (1985-1997), because unlike all the other companies mentioned, Apple fired Jobs.  And no, Apple did not fall down shortly, or even not-that-shortly thereafter.  True, the company wasn’t in too hot shape when he came back, but Apple sales crashed after 1995, not 1985.

In fact, the closer you look at Apple and Jobs, the more the legend looks like (mostly) myth.  Tomorrow, we’ll cite facts and figures. 

Legend or Myth?

Let’s look at a few parts of the conventional wisdom about Apple and Jobs, and see how true they really are:

Apple is a great success story and Jobs is a tremendous salesman:

Over the last quarter-century, Apple has had three major products: the Macintosh, the iPod and the iPhone.  Give the devil his due, the iPod has been a great success with mass
appeal.  Let’s be fair and say the jury is still out on the iPhone (and the smartphone market in general), and it will stay out for a few more years.  That leaves the Macintosh, which has been (and still remains) Apple’s main product.

It was created due to Jobs in his first incarnation.  Then he got tossed.  From around 1990 to 1995, Macs had a worldwide marketshare ranging from 8-12%.  Then came Windows 95, a big surge in PC unit sales, and a big drop in Mac sales (aided in small part by Mac clones),.  By 1997, Mac unit sales were 40% down from 1995, and marketshare had collapsed to 3%.  Then Supersalesman came back.  What happened to Mac sales?

For most of Jobs II, Mac marketshare has been worse than they were when he took over, and have never reached even half of what they were in 1990-1995. If the iPod hadn’t come along, Apple would have been in severe trouble in the early 2000s.  

This is the ultimate salesman?  

What is true about Jobs is that he is the Sarah Palin of the computer industry.  He does a great job appealing to the base, and the media loves to follow him, but that’s as far as his appeal goes, and unlike Governor Palin, that base is about 3-4% of the world’s and about 6-7% of the U.S. computer electorate .   People love Apple ads, then they go and buy PCs. 

The only two times Apple has rallied above that 3% mark was when they came out with cheaper Macs.  Around the turn of the century, the iMac boosted Mac sales, for a while.  Recently, it’s been Apple’s cheaper notebooks that have become the mainstay of Macdom.

Apple Is A Great Innovator

During Jobs I, he claimed that his desire was to make “insanely great” computers, and during the Eighties, with the Mac and later with NeXT, Jobs was responsible for computers that were ahead of their time.  In Jobs II, though, he went from making insanely great computers to making insane claims about his computers’ greatness while turning Apple from a PC alternative to a PC, a Dell with design.  

Under Jobs II, the Macintosh has gone from being mostly PCish to entirely PCish.  When he first came back, Apple went to mostly off-the-shelf PC parts (and not necessarily the best, either).  The only parts unPClike were the CPU and supporting mobo.  Unfortunately for Apple, after 1995, their unit sales were so small that both Motorola, and then IBM didn’t find it worth their while to keep up with x86 chips, so Macs became decidedly worse, not better than PCs.  The only way Apple could get better was to be absorbed into the x86 Borg, becoming the enemy (and that did improve performance considerably).  The only functional hardware difference between a Mac and a Dell is the little chip that allows MacOS X to be run.  The biggest physical difference between a Dell and a Apple is that an Apple is usually better looking, but that beauty is just skin deep.  The only significant difference between a Dell and an Apple is that the latter can (legally) run MacOS X.  Now is not the time to get into a discussion about the merits of MacOS X vs. Windows, but it’s indisputable that MacOS X is the greatest OS never sold to 95%+ of chronically-complaining-about-Windows Windows users.  Really, if you’re a supersalesman, and you have a better product than the other guy’s, and plenty of the other guy’s customers aren’t too happy with the product, you can’t get anywhere near 5% of them to switch?

Let’s face it, outside of admittedly better industrial and user design, Apple is a PC (and iPod, and iPhone) assembler.  It no longer innovates on a technological level; Firewire was the last technological Apple achievement.  What Apple does often do is make some PC part standard before it becomes standard in the PC industry.  Right now, you’ll see claims that Macs are faster than the average PCs, and that’s true until you realize that the difference is solely due to Apple using faster Intel processors than the norm in the average PC.     

But maybe it’s not necessary to get into the nuts and bolts of all this.  Let’s ignore reality for a moment and assume that anything and everything Apple says about Apple is true: the outer designs are works of art, the inner design is even more beautiful, the hardware is better, OS X makes Vista look like an Etch-A-Sketch OS, the applications are practically telepathic, the ads are works of genius inspired by God’s gift to man, the Silicon Obama.  

With all that going for them, why do 93% of the people in Apple’s best market (and 97% worldwide) choose to become John Hodgman rather than the cool Mac guy?  And why is the opposite the case when it comes to listening to music? 

Tell Me A Story 

Let me tell a little tale about an unrelated but curiously parallel commercial industry: coffee.

I like coffee a lot.  I like coffee with oomph, something that stands up to milk, something that lets you know you’re drinking coffee rather than anything else.

In the last five years, I’ve gotten coffee from three different enterprises.  The first place is a place located in upper Manhattan that is very well known in New York and beyond for gourmet items.  You go to the store, you tell them what you want, they scoop out the beans, grind them there, and give it to you.  Besides getting the coffee, you also get stories, stories about the wonderful coffees they sell and the wonderful store and coffee specialists that sell them.  They even had videos to tell the stories. 

This was all well and good, but the place was a bit inconvenient to get to, and prices were kind of high and heading upward (it’s now about $9 a pound).   I started to look for alternatives and found a place located in lower Manhattan without a widespread reputation.  They had stories just about as good as the first place, though no videos.  The place is older and a bit more ramshackle than the first, though I suppose that’s part of their story. What struck me as being a bit more charming was that getting to the place was less of a trip, and much more charming was that their coffees tasted just about the same the first and the prices were both regularly lower (the average price is now around $7 a pound), and they would have frequent sales when something suitable would cost $6 a pound.

Finally, I moved on to a place where a friend of mine works that is located in one of the outer boroughs of Manhattan.  They sell coffee to restaurants and coffee shops.  I have never heard any stories about the coffee from my friend, and if I pushed my friend to tell me the kind of story I got from the first two places,  I’d probably end up hearing, “It’s $&@%ing coffee.  What the #$*! else do you need to know?”  And do you know what, he would be right.  I already know what I need to know: it costs $4.20 a pound, I get free delivery and it tastes the same as the other stuff.

Now perhaps I have an ignorant, savage tongue incapable of ascertaining the aesthetic subtleties of the products from my previous vendors.  Or perhaps I’m out to buy coffee, not stories or perceived prestige from paying 50% or 100% more for them.  I suspect there’s at least a little truth to both arguments, but I also know that most people, when their money comes out, would side with the second. 

This is essentially the story of Apple; it’s a story.  People who like buying stories that they think make them look good are likely to buy Apple.  If they don’t, or at least don’t when the story is expensive, they won’t.  The first problem with Apple is that there are far more people normally in category two than one. 

The second problem with Apple is that as they’ve turned into PCs, there’s less and less to plausibly hang a story on.   All that’s left to hang a story on now are to differentiate Apple from the typical Dell or HP are more expensive Intel processors and the ability to run MacOS X. Obviously you can get a faster Intel CPU for a Dell or HP, too, and as for MacOS X, I think it’s a little telling that the “Get A Mac” campaign are more Vista attack ads than sermons on the virtues of OS X. 

But what about the iPod, you might ask?  Why was it a great success?  Didn’t the story work there? 

First, Apple created the market and had relatively little serious price competition early on.  While the iPod usually cost more than its competitors, it didn’t cost a lot more.  Second, although it had its own proprietary format for music sold through iTunes, the effective universal standard is MP3, so AAC (or any other proprietary standard) doesn’t mean very much.  While iPods cannot play music encoded using Microsoft audio standards, those standards did not have the headstart on AAC that DOS did with MacOS, and MS never had anything like iTunes to propagate their standards.  You also never had the degree of convertibility you have with audio formats with PC/Mac applications and files.  In some ways, iTunes was Jobs’ Revenge on Gates and DOS/Windows, but that wouldn’t have happened if iTunes had only operated in a Mac world.  Windows versions of iTunes served as a techie jujitsu move on MS, using MS’s strength to beat it. 

Finally, there’s just not much of a story behind iPods.  The typical iPod ad barely uses words; there’s no need because the story is “It’s a cool, easy-to-use music player.” 

No, the iPod was a pretty unMaclike device, getting there first, not costing an arm and a leg compared to the original competition, and operating in a relatively open, non-proprietary environment.  In comparison, the iPhone is much more Mac-like (though in fairness, smartphones up to now have been much more proprietary than PCs (outside of the first few IBM years).  If a non-proprietary standard like Android becomes popular in the smartphone world, with many companies using it, that could well be a repeat of the PC/Mac battle. 

So what does this all have to do with Jobs’ mortality?  You have to ask yourself, “Where is Apple going?”  If you look at the Mac, Apple has pretty much boxed itself in.  It will never appeal to a large percentage of people, yet if they freed up the only truly distinguishing attribute of Macdom, MacOS X to the general PC world, they might make the OS world a Coke/Pepsi battle, but they’ll definitely destroy their high-margin hardware business.  If a “freed” MacOS X looked more like AMD vs. Intel (after all, even if you could run it on a Dell, you’d still have to replace PC apps with Mac apps), they’d lose out. The iPhone could go either way.         

If there’s one constant in Mr. Jobs’ thinking, his Achilles heel, it’s “I have to make a lot of money on hardware.”  That may have made sense 20-30 years ago, but it doesn’t make sense in an age where electronics are pretty much the same, they all get built on the same assembly lines in China and an increasing percentage of the customers are like those assembly workers.  

What makes more sense in any future endeavors is to monetize the components of the Apple “experience” and sell that, sometimes to other parties, sometimes to themselves.  If people want the core functionality of Apple software/firmware/compatibility without additional bells and whistles, sell that to outside parties.  If people want Apple exterior or ergonomic design, they could license that to others.  I’m sure Dell or HP would have no more problem selling an “Apple” line of whatever than they would an XPS or Voodoo line.  There may be times when Apple might want to hang onto actually making the product, but the company ought to be open to alternatives, and I’m afraid Mr. Steve really isn’t open to that. 

Selling hardware that really isn’t different than anyone else’s like it’s much better than anyone else’s is slippery business.  You have to be a big storyteller, and there’s a very thin line between storytelling and lying, especially when the story is about real things.  Lying is bad, but what is worse is when your customers believe the lies.  There’s nothing wrong with preferring a prettier computer, or paying extra for it.  There’s nothing wrong with buying a computer that costs a bit more because it has software that you find easier to use than others.  They may not be good reasons for you or me, but if it makes the buyer happy, what is it to you?  You’d probably pay more for a live recording of your favorite band than the average person, should the average person denounce you for it?

No, it’s when you sell things that aren’t there, like the mirages of superiority or elitism, that is where the problem is.  That is why Apple shareholders are so scared that if the mirage-maker dissolves, so will the company (or at least much of the stock price).  And that is why in the long run, Apple will be better off without Oz. 

Having said all that, this will be my last column for the site.  It’s been almost ten years, and in one way, it could be called a big zero, zero as adding an extra one to the back of 400 MHz.  Or maybe it should be called a four, as in four processors to a CPU.  Less than a decade is not very long even in human terms, yet to see and describe the power of anything grow in such multiples over that time has been an often awesome privilege, and all I know about the future is that I’ll see things I can’t imagine today ten and twenty and thirty years from now.  

I’d like to thank all those who made it possible for me to sit on my perch and pay me to talk about it, from Joe Citarella to all the advertisers to all the readers who thought I had something worth saying, at least occasionally. 

Thanks to you all, and I wish you all the best. 

Ed