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Why Is Apple’s Success Now So Bad?

I find it ironic when pundits, developers, partners and even customers cry out in seeming anguish when a company gains a successful foothold in any given marketplace — especially when those same people are the ones who lament a company who is not doing well — and this behavior is particularly pronounced in technology, especially when it comes to Apple.

I worked for Apple in the late 1990s after Steve Jobs had returned to the company. In presentations, sales calls and even at family events, I was in MAJOR DEFENSIVE MODE at all times since I was frequently bombarded by negativity from customers, prospects, family and friends. “Apple is about out of business,” was a familiar refrain as was “Borsch…you’re just a Mac fanboy” from my I.T., Windows machine toting friends and relatives. I was even given crap about owning so much of the stock (which, believe me, I’m damn glad I kept!!) and have felt vindicated as those same people have now flocked to Apple computers and “iStuff” in droves. Many rely on me for advice and assistance as well, but the irony of their previous attitudes are lost on them.

The success of the iPod, and Apple’s quick cornering of the market for music downloads, began to cause angst amongst record executives who saw not a savior of their failing business model, but a company now positioning them for success in a digital world.

Exactly the same thing is happening now with the iPhone and the iPad and Apple’s insistence on no Flash and controlling how the applications are developed and deployed on these devices. The iPhone (according to Morgan Stanley’s Mary Meeker) had the fastest rampup in sales of any consumer device ever. It appears that the iPad’s 1 million in sales in 28 days (which Steve Jobs said, “One million iPads in 28 days—that’s less than half of the 74 days it took to achieve this milestone with iPhone.“) may make it the fastest ramping product ever.

I’ve read many of the arguments for-and-against the closed nature of the “iApp” marketplace and am not going to delve into that in this post, but all of the recent brouhaha about Apple’s “no Flash in iStuff” policy and their supposed “stranglehold on tools to develop iApps” is an example of the concern of success and Apple’s incredible strategic thinking about the marketplace, technology landscape, and anticipating the direction we’re all moving towards and innovating with devices we’ll need to make that journey more effective.

Here are three examples of the angst about Apple’s success:

1) When I see Adobe’s CEO present his “no Flash?” position in this choreographed interview with the Wall Street Journal and following it up with an alleged prodding of the FTC to investigate Apple’s developer policies in an antitrust investigation, I’m embarrassed for Adobe and stunned by their inability to focus on competing, leveraging the power of their customer base (which I’m in, by the way) and find ways to strategically position themselves in the milieu that is content creation. After all, they are THE company in the content creation space and seeing them act like a bunch of crybabies (“Mommy…Stevie won’t let us play in his sandbox!“) is beneath them and John Warnock and Charles Geschske, the two men who founded the company in 1982. It’s no wonder their original lack of support for Jobs when he came back is now coming back to haunt them.

2) Publisher, event producer and pundit Tim O’Reilly said this about Apple in his State of the Internet Operating System: “A few years ago, everyone thought that the big industry showdown was between Microsoft and Google. Now, Apple is the company to beat. With over 185,000 applications, the iPhone app store is creating a new information and services marketplace to rival the web itself. While Apple doesn’t provide Amazon-like cloud hosting services, they don’t have to. iPhone apps don’t live on the web per se, though most of them, apart from local games, do rely on internet-based services.

Techcrunch focused on the Apple portion in a post entitled, “Tim O’Reilly: Steve Jobs Is Trying To Build A Fundamental Challenge To The Web” which says in part, “Apple, he says, “has a vision of world domination”, and that with the App Store platform Steve Jobs is trying to build a fundamental challenge to the web. But it falls short in one key area: O’Reilly believes that Apple doesn’t understand the importance of web-based services, as evidenced by its decision to make its (somewhat lackluster) MobileMe service premium, with little in the way of a social graph.

While I respect O’Reilly and think he’s one of the deepest thinkers in technology, he suffers from what we all suffer from: now knowing the strategic plans Apple has, as an example, for the $1B data center they’re building in North Carolina or any other plans they have for follow-on products this year (which were alluded to on Apple’s recent earnings call by COO Tim Cook when forecasting “softer gross margins” this year due to new products in the pipeline).

3) Tim Bray, a leader in defining the internet, had this to say about Apple’s closed “iDevices”:

“The iPhone vision of the mobile Internet’s future omits controversy, sex, and freedom, but includes strict limits on who can know what and who can say what. It’s a sterile Disney-fied walled garden surrounded by sharp-toothed lawyers. The people who create the apps serve at the landlord’s pleasure and fear his anger. I hate it.”

The kicker? Bray is an evangelist for Google’s Android operating system.

I don’t have time today to go much deeper than this in to what I see as an ongoing bashing of a company that was on the brink of collapse and came back through a clear vision, unbelievable innovation and strategies that have been years in the making. I understand your fear of power and control — I had it too with Microsoft’s desktop control and have it now with Comcast and Google — but understand that any success comes from vision, innovation and execution (and maybe a little luck) so whining, crying and lamenting another company’s power and control has no meaning.

Craft your own vision, compete and execute.

About Steve Borsch

I'm CEO of Marketing Directions, Inc., a trend forecasting, consulting and publishing firm in Minnesota. Prior to that I was Vice President, Strategic Alliances at Lawson Software in St. Paul where I was responsible for all partnerships at this major vendor of enterprise resource planning software products and services. Read more about me here unless you're already weary of me telling you how incredible and awesome I am.

Comments

  1. http://Edwin says

    Why would anyone buy general purpose hardware from a company that restricts the software you can consume on it? Have a little self-respect.

  2. WSJ interview wasn’t “choreographed”… was scheduled for mid-day and got pre-empted by the Flash feature on the front page of apple.com.

    Now that there’s finally a clear public answer that the iPlatform will not permit Flash, it’s easy for the rest of us to move on past that one manufacturer and focus on the larger market which is developing.

    jd/adobe

  3. why-is-apples-success-now-so-bad.html
    Steve, in example 1 the unfinished sentence ‘It’s no wonder their original lack of support for Jobs when he came back….’ needs to be completed.

    Hope you are well. 🙂

  4. http://Bels%20Piet says

    I’m just a normal user, but use IT a lot in my daily life. Just bought my first Iphone. I want to state my argument against it very briefly but with conviction : just ‘the feeling’ of its closed nature appals me. It represents everything that I don’t want : exclusivity and ‘we’re in this club aren’t we’. I will never buy an Apple product again.

  5. http://Steve%20Borsch says

    You should sell your iPhone then and buy an Android-based device.

    Is the iOS ecosystem closed? Somewhat. But here’s the thing: Even though there has been a couple of emerging viruses for Macintosh, FOR YEARS there was virtually zero virus, adware, spyware, and other malware that affected the platform. Say what you will…but I have always invested WAY more time working on our PCs than our Macs. Here is an example from 2007 that illustrates the point.

    Same thing with iOS-based devices (i.e., iPhone, iPad, iPod Touch): they just work, no malware like Android, or like this new kind of Android malware that bypasses Google’s protections and targets the user’s phone directly.

    If you are a geek, love to constantly mess with your device vs. just use it, you should absolutely embrace Android. If you want to use the tool for fun, social connections, productivity and to ensure your privacy is secure, go Apple.

    My “feeling” is that Apple balances closed vs. open vs. “it just works” better than any vendor out there.

    Good luck.

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