*Editor’s note: Russ McGuire is the online director of Business Reform Magazine. Each issue of the magazine features practical advice on operating successfully in business while glorifying God.
Apple Computers is back in its classic form: introducing lots of really cool technology products and losing money.
I wonder why the company is even called Apple Computer anymore. Steve Jobs, Apple’s CEO warns us that “We have a very strong new product pipeline for 2003,” and based on recent history, we can count on many of those products being anything but computers. In fact, Apple’s most influential new product introduction of the past several years has been the iPod – the coolest new way to listen to music!
It’s way past time for Apple to figure out what they’re all about and figure out how to consistently make money at it.
Carefully considering the critical strengths of the iPod provides a good indication of what Apple should be all about. Apple’s newest hit wins on three fronts: the design is stunning in all dimensions, it’s the first product of its kind to really appeal to the mass market, and it breaks out of the boundaries defined by “Apple computer.”
Great design – very sleek, very modern, very cool. Its engineering is marvelous – it leaves smart people asking “how did they do all of that in that small of a box.” And the design is seamless and impressive from software to hardware and back again. From the desktop software used to rip and download the music, to the speedy connection to the iPod, to the intuitive user interface on the device itself – this thing just plain works. And that’s saying a lot for a cool technology product.
Mass market appeal: The iPod’s great design leads right into its mass market appeal. MP3 has long since passed being a geeky concept hoarded by motion picture engineers. Thanks to Napster, the core technical concepts have been in common vocabulary for years. But MP3 products have been far from critical mass. Until the iPod, that is. Apple has made an MP3 player (and the supporting software and hardware) that everyday moms and stock brokers can figure out and put it all in a package over which everyone from teen rockers to CEOs can salivate.
Breaking boundaries: Finally, and perhaps most importantly, the iPod has broken out of the niche market defined by “Apple computers.” Although initially designed to interoperate with software on the Macintosh, there was nothing inherent to the design which locked it into the Mac system. Measured in product development time, it took no time flat for the iPod team to introduce a version of the product that worked well with PCs running Windows operating systems. This single move may create a whole new broad class of Apple fans who can enjoy the company’s brilliance without being bound by the market limitations of the Apple computer platform.
Should Apple continue investing in research and development? Absolutely. Should the company have a full pipeline of products? I should hope so. However, the way that Mr. Jobs completed the previously quoted sentence is where the problem begins: “We have a very strong new product pipeline for 2003, which we kicked off by introducing the two most advanced notebook computers in the industry last week at Macworld.”
Notebook computers, operating systems, monitors, servers, presentation software… I’m sorry, these are commodities that are already widely adopted. Find a way to exit these businesses – preferably by spinning out or selling to a company that can continue to support die-hard Macintosh fans who are married to the ways that the MacOS blows away Windows.
Instead, go searching for the next insanely great product. What’s the next item that has technology that’s ready, a market environment that’s ripe, but which lacks the incredible design that can both make it work easily and well, but also make people want it? That’s what Apple should be all about. Capturing the margins while the product is hot. Exiting the product line when it commoditizes.
Apple is the company that should be making Wireless Networks a mass market phenomenon (instead Microsoft is trying). Apple should be the one stepping in to put a TiVo/RePlayTV-like product into every living room (instead all of the consumer electronics companies are stumbling over it). Apple should be the one marrying the cell phone with the web browser into a no-brainer gadget for everyday Americans (instead it’s Asian companies who are great at small and cheap, but not Wow!). Apple should be creating the intuitive and practical networked digital camera and web-based photo editing/management service that will make digital photography the runaway smash it’s been claiming to be for years (instead of everyone from Nokia to Kodak taking their myopic and flawed shots at parts of it).
Apple should be great. And profitable. Instead, the seeds of brilliance keep getting choked out by the weeds of commodity products.
Now is the time to clear away the strangle-vines and sow success in the company’s fertile soil.
Russ McGuire is Online Director for Business Reform. Prior to joining Business
Reform, Mr. McGuire spent over a dozen years in the telecom industry, serving as Chief Strategy Officer for TeleChoice and Vice President of Strategic Development for Williams Communications, among many other roles. Mr. McGuire is currently focused on helping businesspeople apply God’s eternal truths to their real-world business challenges through Business Reform’s online services.