Apple: Wrong or Right?

Over the past few years, I’ve been in numerous discussions about how social media (and blogging in specific) is driving a new level of transparency in marketing, public relations and corporate communications, while also providing unprecedented opportunity for thought leaders to carve out a niche in new and powerful ways.

In my consulting engagements when talk comes around to discussing crowdsourcing and ways to spark creativity and innovation through social media means, Apple often is brought up as an example of how to innovate: “We’ve got to create an iPod” is often brought up as a successful innovation.

Often this occurs without much talk of how Apple really succeeded with it by focusing on the entire value chain. Nailing the value chain was the secret sauce in delivering a three-tiered value chain offering by tying that iPod to a desktop application (iTunes) so people could rip their CD’s and manage their music, alongside that same application (iTunes) acting as a Web hosted application (iTunes connected to an iTunes Store). Then they offered this whole package up to an industry on its knees as its product (music) was being stolen out from underneath them.

But then I’m quizzed by clients. “Hey, wait just a dang minute Borsch. You’re promoting and pushing us to be transparent and let employees blog when a company you laud, worked for and own stock in is polar opposite?” Apple is a different beast that needed to be opaque since they were close to being out of business in the 1990’s, but the problem is they haven’t changed direction about their lack of transparency now that they’re a resounding success.

I’ve been troubled by that paradox until just now.

“How Apple Got Everything Right By Doing Everything Wrong” is an interesting Wired article I read tonight about this paradox of Apple’s (really Steve Jobs) control exerted over the company, communications and attempts anyone outside takes to interfere with Apple’s messages. The result is that everything Apple does is opaque, they remain extremely secretive and big splashes with event marketing aren’t enough to explain it.

It took until the last page of the article before I hit the “Aha!” moment and the money quote (in bold below).

Tim O’Reilly, publisher of the O’Reilly Radar blog and an organizer of the Web 2.0 Summit, says that these “three-tiered systems” — that blend hardware, installed software, and proprietary Web applications — represent the future of the Net. As consumers increasingly access the Web using scaled-down appliances like mobile phones and Kindle readers, they will demand applications that are tailored to work with those devices. True, such systems could theoretically be open, with any developer allowed to throw its own applications and services into the mix. But for now, the best three-tier systems are closed. And Apple, O’Reilly says, is the only company that “really understands how to build apps for a three-tiered system.”

NOW Apple’s fondness for opacity finally sunk in: Apple (Jobs) recognizes that they’re aren’t competing with Microsoft, and to a degree Linux, for the desktop operating system and application market, but instead they’re competing with anyone-n-everyone that can make a three-tiered system combining a device, operating system and Web application as a single, value chain product offering!

All consumer electronic, mobile telephony and even loosely coupled federations of makers can offer competing products and services as the market shifts to cloud/internet/web computing, so if anything Apple has to be even more closed and opaque than they’ve ever been previously. The paradox continues.

As a stockholder, I recommend you stay opaque Apple, but it still bugs me as a user that there is so little transparency.