Apple

Apple after Steve Jobs

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In an interview with Wall Street Journal columnists Kara Swisher and Walt Mossberg, Apple CEO Tim Cook offers a few answers on Apple after Steve Jobs:

Q: How is Apple different with you as the CEO? What did you learn from Steve?

Cook:  I learned that focus is key, not just in running a company but in your personal life. You can only do so many things great, and you should cast aside everything else.Another thing that Steve taught us all was to not focus on the past. If you’ve done something great or terrible, forget it and go on and create the next thing. When I say that I’m not going to witness or permit the change, I’m talking about the thing that’s most important in Apple—the culture of Apple. Am I going to change anything? Of course.

Q: At any one time, there is only one new iPhone. That’s not the way you did it with the iPod; that’s not the way you did it with the Mac. Why don’t you have more than one iPhone, and why don’t you have more than one iPad?

Cook: Our North Star is to make the best product. Our objective isn’t to make this design for this kind of price point or make this design for this arbitrary schedule or line up other things or have X number of phones. I think one of our advantages is that we’re not fragmented. We have one app store, so you know what app store to go to. We have one phone with one screen size with one resolution, so it’s pretty simple if you’re a developer developing for this platform.

Perhaps the most succinct point that Cook tries to make in the interview: Apple is still about making great products. It’s not about becoming a trillion dollar company. By making great products, other good things will follow.

On Apple’s Exponential Growth

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Blogger Horace Dediu was recently asked the following question for MacUser Magazine UK:

The exponential growth of Apple products has to end some time soon doesn’t it? How many high-income buyers for expensive products can there be left for Apple to target?

And this was Horace’s intelligent response:

Trying to calculate the limits to growth is futile. There are limits but they are not calculable and inaccurate estimates don’t offer any useful information.

In 1939 a total of 921 military aircraft were built in the United States. Five years later, in 1944, annual production was 96,318. A question could have been asked by an aviation analyst in 1939 about whether the American aircraft industry could grow. Aircraft, especially multi-engined ones used by the military were _extremely_ expensive. The reason an industry grew exponentially making extraordinarily expensive products was not because of organic demand but because the primary buyers engaged in a cataclysmic global war. In other words, there was a will to buy and hence there came a way to build. Therefore the answer to the question of sustainable growth comes not from an analysis of demand but from an analysis of the consequences of not growing. Not growing would have meant the end of many nation states.

Your question was framed by an implied market categorization: that buyers are either high-income or, presumably, low-income. This is a false dichotomy. Buyers are either needful of a job to be done or not. If the job is important enough, money will be found to hire a product. Sellers of products will also find ways to meet the demand through lower prices and increased capacity. Every product Apple makes used to be out of the reach of all consumers. Whether computers (portable or not), music players and professional grade software, voice recognizing personal assistant cellular phones and tablets are all luxuries or necessities is only a question of timing.

Highly recommend reading the full interview here.

Money Can’t Buy Taste

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Marco Arment offers an excellent rebuttal to this Seeking Alpha article about Apple’s eventual downfall. Marco has two major points: time and taste. This was my favorite part of his argument:

Most people don’t have great taste. (And they don’t care, so it doesn’t matter to them.) They usually like tasteful, well-designed products, but often don’t recognize why, or care more about other factors when making buying decisions.

People who naturally recognize tasteful, well-designed products are a small subset of the population. But people who can create them are a much smaller subset.

Taste in product creation overlaps a lot with design: doing it well requires it to be valued, rewarded, and embedded in the company’s culture and upper leadership. If it’s not, great taste can’t guide product decisions, and great designers leave.

No amount of money, and no small amount of time, can buy taste.

Spot on.

Sergey Brin on Internet Freedom

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Over the weekend, The Guardian published an article in which Google co-founder Sergey Brin was interviewed. The Guardian distilled Brin’s views as follows:

The threat to the freedom of the internet comes, he claims, from a combination of governments increasingly trying to control access and communication by their citizens, the entertainment industry’s attempts to crack down on piracy, and the rise of “restrictive” walled gardens such as Facebook and Apple, which tightly control what software can be released on their platforms.

Today, Brin took to Google+ to clarify his position and explain that his thoughts “got particularly distorted”:

Today, the primary threat by far to internet freedom is government filtering of political dissent. This has been far more effective than I ever imagined possible across a number of nations. In addition, other countries such as the US have come close to adopting very similar techniques in order to combat piracy and other vices. I believe these efforts have been misguided and dangerous. 

Lastly in the interview came the subject of digital ecosystems that are not as open as the web itself and I think this portion has led to some misunderstanding of my views. So to clarify, I certainly do not think this issue is on a par with government based censorship. Moreover, I have much admiration for two of the companies we discussed — Apple and Facebook. I have always admired Apple’s products. In fact, I am writing this post on an Imac and using an Apple keyboard I have cherished for the past seven years. Likewise, Facebook has helped to connect hundreds of millions of people, has been a key tool for political expression and has been instrumental to the Arab Spring. Both have made key contributions to the free flow of information around the world.

It’s good to know that Brin loves Apple products. Also of note is Brin’s recommendation to check out Jonathan Zittrain’s The Future of the Internet.

Jonathan Ive on Design

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Jonathan Ive is Apple’s Apple’s Senior Vice President of Industrial Design. In Walter Isaacson’s biography of Steve Jobs, the late Apple co-founder explained that Ive has been left with unparalleled control at Apple to design products as he sees fit, with little to no guidance and reporting to management. In the latest issue of London’s Evening Standard, Ive was interviewed about design:

Q: What makes design different at Apple?

A: We struggle with the right words to describe the design process at  Apple, but it is very much about designing and prototyping and making. When you separate those, I think the final result suffers. If something is going to be better, it is new, and if it’s new you are confronting problems and challenges you don’t have references for. To solve and address those requires a remarkable focus. There’s a sense of being inquisitive and optimistic, and you don’t see those in combination very often.

Q: When did you first become aware of the importance of designers?

A: First time I was aware of this sense of the group of people who made something was when I first used a Mac – I’d gone through college in the 80s using a computer and had a horrid experience. Then I discovered the mac, it was such a dramatic moment and I remember it so clearly – there was a real sense of the people who made it.

Q: How do you know you’ve succeeded?

A :It’s a very strange thing for a designer to say, but one of the things that really irritates me in products is when I’m aware of designers wagging their tails in my face.

Our goal is simple objects, objects that you can’t imagine any other way. Simplicity is not the absence of clutter. Get it right, and you become closer and more focused on the object. For instance, the iPhoto app we created for the new iPad, it completely consumes you and you forget you are using an iPad.

Q: What are the biggest challenges in constantly innovating?

A: For as long as we’ve been doing this, I am still surprised how difficult it is to do this, but you know exactly when you’re there – it can be the smallest shift, and suddenly transforms the object, without any contrivance.

Some of the problem solving in the iPad is really quite remarkable, there is this danger you want to communicate this to people. I think that is a fantastic irony, how oblivious people are to the acrobatics we’ve performed to solve a problem – but that’s our job, and I think people know there is tremendous care behind the finished product.

If you come away thinking that Ive’s responses are a bit (or a lot) shallow, you aren’t alone. This sentence says it all for me: “We struggle with the right words to describe the design process at Apple.”

How to Become Creative

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In the Saturday essay in The Wall Street Journal, Jonah Lehrer writes about the creative process. He argues that creativity is not something that is passed in the genes; it is something that requires practice. We can work to become more creative.

This ability to calculate progress is an important part of the creative process. When we don’t feel that we’re getting closer to the answer—we’ve hit the wall, so to speak—we probably need an insight. If there is no feeling of knowing, the most productive thing we can do is forget about work for a while. But when those feelings of knowing are telling us that we’re getting close, we need to keep on struggling.

Of course, both moment-of-insight problems and nose-to-the-grindstone problems assume that we have the answers to the creative problems we’re trying to solve somewhere in our heads. They’re both just a matter of getting those answers out. Another kind of creative problem, though, is when you don’t have the right kind of raw material kicking around in your head. If you’re trying to be more creative, one of the most important things you can do is increase the volume and diversity of the information to which you are exposed.

Steve Jobs famously declared that “creativity is just connecting things.” Although we think of inventors as dreaming up breakthroughs out of thin air, Mr. Jobs was pointing out that even the most far-fetched concepts are usually just new combinations of stuff that already exists. Under Mr. Jobs’s leadership, for instance, Apple didn’t invent MP3 players or tablet computers—the company just made them better, adding design features that were new to the product category.

And it isn’t just Apple. The history of innovation bears out Mr. Jobs’s theory. The Wright Brothers transferred their background as bicycle manufacturers to the invention of the airplane; their first flying craft was, in many respects, just a bicycle with wings. Johannes Gutenberg transformed his knowledge of wine presses into a printing machine capable of mass-producing words. Or look at Google: Larry Page and Sergey Brin came up with their famous search algorithm by applying the ranking method used for academic articles (more citations equals more influence) to the sprawl of the Internet.

Don’t miss the bottom of the post which provides ten ways to become more creative, which I summarize below. A lot of these have been tested in an artificial setting (think undergraduates in a lab), so take these with a grain of salt:

1. Surround yourself with the color blue.

2. Do creative things when you’re groggy.

3. Daydream more.

4. Think like a child — imagine what you would do as a five year old.

5. Laugh more.

6. Imagine that you are far away.

7. Keep it generic.  When the verbs are extremely specific, people think in narrow terms. In contrast, the use of more generic verbs—say, “moving” instead of “driving” can help us solve creative problems.

8. Don’t work in a cubicle!

9. See the world. Travel.

10. Move from a small city to a metropolis.

Apple is Secretariat at Belmont

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Musing on Apple’s latest announcement of the new iPad, John Gruber makes a brilliant analogy of Apple’s dominance:

Two years after announcing the original iPad, Apple has produced a version that simply blows that original model away in every single regard. It’s faster, it’s thinner, it feels better in hand, it supports LTE networking, and yet battery life is better. The retina display is simply astounding to behold. Eight days from today they’re shipping a product that two years ago would have been impossible at any price, and they’ve made it look easy.

Nothing is guaranteed to last. The future’s uncertain and the end is always near. Apple’s position atop the industry may prove fleeting. But right now, Apple is Secretariat at the Belmont. And the company, to a person, seems hell-bent on not letting any competitor catch up.

I’ve pre-ordered the new iPad. I can’t wait to see how my photos look on the new retina display.

Apple and the Law of Large Numbers

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This is a good but flawed New York Times piece which reflects on Apple’s staggering growth. This week, Apple stock hit a record high of $526 per share. The bulk of the piece focuses on the so-called Law of Large Numbers in assessing Apple’s growth:

Apple is so big, it’s running up against the law of large numbers.

Also known as the golden theorem, with a proof attributed to the 17th-century Swiss mathematician Jacob Bernoulli, the law states that a variable will revert to a mean over a large sample of results. In the case of the largest companies, it suggests that high earnings growth and a rapid rise in share price will slow as those companies grow ever larger.

If Apple’s share price grew even 20 percent a year for the next decade, which is far below its current blistering pace, its $500 billion market capitalization would be more than $3 trillion by 2022. That is bigger than the 2011 gross domestic product of France or Brazil.

Unfortunately, the writer of the piece (and its editors) don’t fully grasp the meaning of “Law of Large Numbers.” That law states that if you perform an experiment enough times, the average of results will approximate the expected value of the random variable. Here’s the rub: you can use this law to predict the behavior of experiments where you can deduce (or solve for) the expected value. For instance, if you toss a fair coin enough times, the Law of Large Numbers implies that the coin will land on heads (approximately) equal number of times as tails. Similarly, if you toss a fair six-sided die enough times, and look at the face value, the result should approach the expected value of 3.5 (the average of 1 + 2 + 3 + 4 + 5 + 6).  But you can’t use the Law of Large Numbers for experiments where you can’t deduce the expected value. Who’s to say that Apple’s earnings or share price should follow a certain reversion to the mean? What if we’re witnessing a novel company that is going to break all kinds of records? I think this is the case here.

The New York Times piece then attempts to justify the Law of Large Numbers by citing examples such as the fall of Cisco systems from a record $557 billion market capitalization to close to $100 billion today. Again, the major assumption there is that stocks tend to behave in a similar fashion, and that history repeats itself.

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Disclosure: I am long AAPL.

Tim Cook on the Apple Culture

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Earlier this week, the CEO of Apple, Tim Cook, spoke at a conference put on by Goldman Sachs. For his final question during the the Q&A session, Cook was asked how his leadership might change Apple, and what aspects of the culture he might try to preserve. Here’s what he had to say:

Apple is a unique culture and unique company. You can’t replicate it. I’m not going to witness or permit the slow undoing of it. I believe in it so deeply.

Steve grilled in all of us, over many years, that the company should revolve around great products. We should stay extremely focused on a few things, rather than try to do so many that we did nothing well. We should only go into markets where we can make a significant contribution to society, not just sell a lot of products.

These things, along with keeping excellence as an expectation of everything at Apple. These are the things that I focus on because I think those are the things that make Apple a magical place that really smart people want to work in and do, not just their life’s work, but their life’s best work.

And so we’re always focused on the future. We don’t sit and think about how great things were yesterday. I love that trait because I think it’s the thing that drives us all forward. Those are the things I’m holding onto. It’s a privelege to be a part of it.

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(via Dustin Curtis; full audio here)

John Gruber’s Critique of Walter Isaacson’s Biography of Steve Jobs

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John Gruber has an excellent critique of Walter Isaacson’s biography of Steve Jobs. I’ve read the biography last year, but I couldn’t make an informed critique like this:

There is much that is wrong with Walter Isaacson’s biography of Jobs, but its treatment of software is the most profound of the book’s flaws. Isaacson doesn’t merely neglect or underemphasize Jobs’s passion for software and design, but he flat-out paints the opposite picture.

Isaacson makes it seem as though Jobs was almost solely interested in hardware, and even there, only in what the hardware looked like. Superficial aesthetics.

In Chapter 26, “Design Principles: The Studio of Jobs and Ive”, Isaacson writes (p. 344 in the hardcover print edition):

“Before Steve came back, engineers would say ‘Here are the guts’ — processor, hard drive — and then it would go to the designers to put it in a box,” said Apple’s marketing chief Phil Schiller.
“When you do it that way, you come up with awful products.” But when Jobs returned and forged his bond with Ive, the balance was again tilted toward the designers. “Steve kept impressing on us that the design was integral to what would make us great,” said Schiller.

“Design once again dictated the engineering, not just vice versa.”

On occasion this could backfire, such as when Jobs and Ive insisted on using a solid piece of brushed aluminum for the edge of the iPhone 4 even when the engineers worried that it would compromise the antenna. But usually the distinctiveness of its designs — for the iMac, the iPod, the iPhone, and the iPad — would set Apple apart and lead to its triumphs in the years after Jobs returned.

Isaacson clearly believes that design is merely how a product looks and feels, and that “engineering” is how it actually works.

Jobs, in an interview with Rob Walker for his terrific 2003 New York Times Magazine profile on the creation of the iPod, said:

“Most people make the mistake of thinking design is what it looks like. People think it’s this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.”
That quote is absent from Isaacson’s book, despite the book’s frequent use of existing source material.

The entire post is worth reading, especially if you’ve read Steve Jobs.